In June 1988, Alex Council of Pfafftown, N.C., killed himself, blaming his fate on the Internal Revenue Service. He left a note for his wife Kay: "I have taken my life in order to provide capital for you. The IRS and its liens which have been taken against our property illegally by a runaway agency of our government have dried up all sources of credit for us. So I have made the only decision I can. It's purely a business decision. I hope you can understand that. I love you completely, Alex."

The Councils had been fighting a running battle with the IRS for nine years. Four months after Alex Council's death, Kay Council went to court using the money from his life insurance, and she beat the IRS. The judge barred the IRS from collecting the $300,000 in taxes, penalties and interest that it claimed the Councils owed.

Tangling with the IRS normally does not have a fatal outcome. But many taxpayers who square off with the tax man experience lifelong losses and repercussions. Challenging the fearsome monolith can be overwhelming and, in some cases, impossible.

A congressional investigation recently concluded that the IRS wrongly assessed penalties to 1.5 million taxpayers in 1988. The IRS admitted that was true and vowed to clean up the bookkeeping errors that led to those unwarranted penalties.

But that is little consolation to taxpayers who think they have paid their due and fail an IRS audit. If it happened to you, would you accept defeat and pay the money or would you stand up to the IRS?

If you chose the latter, plan on spending plenty of money. Congress passed a "Taxpayers' Bill of Rights" two years ago, making it easier to go to court and stop the IRS from bleeding you dry though you are in the right. Tax court is one place where you are guilty until proven innocent, and taxpayers still must come up with the court costs.

Some senators recognize the advantage the IRS has and have tried to shift the odds toward the taxpayer. Recently Sen. William L. Armstrong (R-Colo.) introduced a series of "Fair Play for Taxpayers Bills." They provide for taxpayers to get their expenses back if they win, allow taxpayers to sue the IRS for carelessness and make the IRS pay the interest rate a taxpayer would on disputed taxes.

Armstrong told our reporter Paul Zimmerman that the IRS can be "very coercive." He added, "Even if you win your case in court, you lose by paying court costs."

A provision in Armstrong's plan would put an end to a bit of IRS skullduggery -- the use of tax accountants to rat on their clients. The IRS uses between 750 and 900 "controlled informants" a year -- people who spill information the IRS uses to go after delinquent taxpayers. Incredibly, an estimated 20 of the informants are tax accountants.

Unlike lawyers, accountants are not bound by confidentiality requirements with their clients. The American Institute of Certified Public Accountants deplores the practice, but it happens anyway.

A St. Louis man recently discovered, after he was indicted by a federal grand jury on six counts of tax evasion, that his accountant had gone to the IRS with the damning information. In return, the accountant got a break on his own tax problem.