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Senate Committee Investigates IRS Practices

Committee to hear parade of witnesses from inside and outside the agency

WASHINGTON (AllPolitics, Sep. 23) -- Many Americans have a hard time thinking of the Internal Revenue Service in a positive light, and today the perception is likely to get worse as the Senate Finance Committee kicks off three days of hearings into alleged IRS abuses.

"We are holding these hearings because one thing is certain. We can't fix the IRS without knowing what ails the IRS," said Senate Finance Committee Chairman William Roth.

Today's hearing ended early after a parliamentary move by Minority Leader Tom Daschle (D-S.D.) forced all Senate hearings to suspend for the day.

The committee is following up on findings by a the congressionally appointed National Commission on Restructuring the IRS, headed by Nebraska Sen. Bob Kerrey and GOP Rep. Rob Portman of Ohio.


Critics say Republicans want to raise anti-tax sentiment by bashing the unpopular agency during this week's hearings. And, pointed out New York Sen. Patrick Moynihan in his opening statement today, if the IRS has problems, Congress may deserve much of the blame.

"There are now 9,451 pages in the tax code," Moynihan, the committee's ranking Democrat, noted. "In August, as not many of us will forget, we added 820 [more pages]." Tossing a giant stack of papers on the desk before him, Moynihan said, "I mean you could hurt yourself with that. And that's a pattern we don't seem to be able to break out of and ought to address as well."

Roth said the committee is merely engaged in "constructive criticism -- criticism with the intent to improve, not destroy. This is not IRS bashing; it is oversight."

Among the commission's findings are that IRS agents are pushed to achieve collection quotas; that officers sometimes use false identifications; that tax assessments without merit are sometimes issued; and that middle- and lower-income taxpayers are the preferred targets since they are less challenging.

In a letter to Roth, Treasury Secretary Robert Rubin, who has jurisdiction over the tax agency, urged the committee on Monday to bear in mind the IRS' annual job of collecting some 209 million tax returns.

"We are working hard to reform the IRS, and it would be counterproductive at best, and very harmful at worst, if these hearings undermined morale and damaged our efforts," Rubin wrote. "I deeply regret any mistreatment of taxpayers," he added.


IRS spokesman Frank Keith was also doing damage control, telling The Associated Press there is "a longstanding policy" that prohibits quotas. He said pseudonyms are used to protect the agents.

"Assault on IRS employees, sad to say, are a reality," he told the AP.

But public interest in the issue appears to be running high, as Roth's office was deluged by phone calls. Sensational testimony could come from past and present IRS employees -- some of whom are expected to conceal their identities.

Sen. Charles Grassley (R-Iowa), a member of the commission, told the finance committee that chief among the IRS' problems is mismanagement.

"The IRS, until two years ago, had seen continual increases in its budget for 40 years. Indeed the commission uncovered that hundreds of millions of taxpayer dollars had been wasted. Clearly the problem at the IRS is mismanagement, not money," he said. (448K wav sound)

But Stephen Moore, a budget analyst at the Cato Institute, echoed Moynihan's critique. "The villain here is Congress because the IRS has a hopeless task to administer and enforce a tax code that is ultimately unenforceable," he told the AP.

In Other News:

Tuesday Sept. 23, 1997

White House Placing Pressure On Reno
Senate Committee Investigates IRS Practices
Clinton: Congress Must Consider Campaign Reform
Daschle Uses Maneuver To Shut Down Committee Meetings
Fund-Raising Panel Changes Course

E-mail From Washington:
Gore: U.S. Has New Information On Iran's Nuclear Aspirations
Carey Says Hoffa Contributions Should Be Investigated

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