Fairplay for Taxpayers Act of 1991

Fairplay for Taxpayers Act of 1991 - Amends the Federal Rules of Evidence to declare that the communications between a lawyer, an accountant, or an enrolled agent with respect to the preparation of a tax return for a client and the client shall be privileged in the U.S. courts.

Amends the Internal Revenue Code to increase the interest rate for overpayment of tax from two percent to three percent (making such rate equal to the interest rate for underpayment of tax).

Provides that if a taxpayer pays the full amount of taxes, interest, and penalties owed within 45 days (currently, ten days) from the date of notice and demand, then no interest liability will be imposed.

Requires any final, temporary, or proposed tax regulation or ruling to be applied prospectively from the date of publication in the Federal Register. Provides that such prospective-only treatment may be superseded only by congressional action.

Replaces the "substantially-prevailed" test for determining whether a taxpayer may recover costs and fees incurred as part of an administrative or court proceeding with a "prevailed-to-some-extent" test. Allows the taxpayer to recover the same percentage of costs incurred as the percentage by which he or she prevails in the controversy.

Revises the meaning of reasonable administrative costs to include only costs incurred during, or in preparation for, the initial audit, or an appeals conference, or at any time thereafter.

Expands the current test allowing taxpayers to sue for civil damages for certain unauthorized collection actions to allow a suit if in connection with any collection of tax any officer or employee of the Internal Revenue Service (IRS) carelessly disregards tax law. (The current test is "recklessly or intentionally disregards".)

Directs the IRS to require all employees to report to the Inspection Service all instances of misconduct. Directs the Commissioner of IRS to make quarterly reports to the Inspector General concerning cases reported to the Inspection Service. Requires the Inspector General to submit an annual summary of such quarterly reports to specified congressional committees.

Directs the Commissioner to carry out an education and training program for all IRS employees regarding appropriate and ethical conduct of governmental duties and responsibilities, including an explanation of applicable standards of conduct.

Authorizes appropriations.