US SB1386

Small businesses (corporations, partnerships, sole proprietorships with average annual gross receipts under $50,000,000) become eligible to recover litigation costs against the IRS regardless of net worth when they prevail in tax disputes

Maximum civil damages for reckless IRS conduct increased from $1,000,000 to $5,000,000 (and from $100,000 to $500,000 for negligence), with the statute of limitations extended from 2 years to 5 years for bringing such actions

Prohibits ex parte communications between IRS Appeals officers and other IRS employees, bans IRS from raising new issues during internal appeals, and guarantees taxpayers the right to an independent Appeals conference without IRS counsel or compliance staff present unless the taxpayer consents

Restricts IRS enforcement of liens against principal residences by requiring written determination that other taxpayer property is insufficient and the action won't create economic hardship, with authority limited to the Treasury Secretary, IRS Commissioner, or district directors

Eliminates partial payment requirement for offers-in-compromise submissions and expands levy release provisions to consider economic hardship for viable business taxpayers, including impacts on employees if the business would be liquidated