Your Money: Jul. 20, 1998

BONDS ON THE RISE

Inflation hasn't reared its ugly head of late, but the Treasury wants investors to be ready if it returns. Last week the government introduced a new class of affordable, inflation-indexed savings bonds to protect investors even if the cost of living is ballooning. Interest on the bonds, which debut Sept. 1 in denominations ranging from $50 to $10,000, will be tax deferred until cashed in and may be tax exempt if used to help fund college or other higher learning.

FIGHT BACK AGAINST THE IRS

Now that Congress has passed an IRS-reform bill, a few million taxpayers locked in battle with the dreaded agency may soon have a fair fight. Under the law, the burden of proof in many cases would fall to the government instead of the accused, and mistreated taxpayers would have the right to sue the IRS for damages. In addition, unlucky divorces caught holding the bag wouldn't always be responsible for the dubious accounting of their former spouses.

HIDDEN FEES ON YOUR 401(K)

If you're one of the 25 million workers pumping cash into a 401(k) savings plan, hidden fees could be slowly chipping away at your nest egg. That's the conclusion of a new Labor Department consumer guide (available at www.dol.gov or by calling 800-998-7542), which advises Americans how to comb through prospectuses to figure out the precise level of those extra, buried administrative charges. Over time, those fees really add up.

--By Daniel Eisenberg