IRS law does not uncover abuses
©New York Times
© St. Petersburg Times, published August 15, 2000
Two years ago, Congress, warned in hearings that the Internal Revenue Service was bullying many innocent Americans, passed a law requiring that the agency fire workers who harass taxpayers.
But not one of the first 830 complaints of taxpayer harassment filed under the new law has been upheld by the IRS or its new, congressionally designated watchdog, according to new data.
Investigations by the IRS and its watchdog, the Treasury Inspector General for Tax Administration, found evidence that some of the complaints were bogus -- made in an effort to derail audits and tax collections. Others were either without merit or involved misconduct that fell far short of the congressional definition of harassment.
A spokeswoman for Sen. William V. Roth Jr., the Delaware Republican who sponsored the 1998 IRS Reform and Restructuring Act, said the results showed that IRS employees "are adhering to the law."
The spokeswoman, Ginny Flynn, added that "while the vast majority of IRS employees always have adhered to the law, clearly from our hearings some were not adhering to the law all the time and perhaps the restructuring act and its threat of termination has kept them from violating" the law.
But others argued that for all the rhetoric about abusive IRS agents, the new law may have gone too far in subjecting IRS employees to extreme scrutiny.
Rep. Lloyd Doggett, a Texas Democrat who sits on the House Ways and Means Committee, said that while he voted for the law because he heard some evidence of IRS abuses, he thinks Congress has gone too far in restricting the agency.
Doggett said he now thinks the 1998 law is "another example of the Republican priority of demonizing the IRS and limiting its resources to fulfill its responsibilities, which I believe is all aimed at trying to end income taxation."
Most of the key testimony in the 1997-98 hearings that preceded the new law, alleging abuses by IRS agents, has proven to be unfounded, based on false or misleading testimony or disproven in subsequent court actions.
One result of the new law has been extreme caution by IRS workers, especially those involved in sensitive audits and collections against those who owe taxes past due. Many IRS employees have become much less aggressive in collection efforts while others say dust gathers on their requests for permission to take enforcement actions. Collection has grown so lax that some prominent tax advisers said in interviews last year that they were amazed that the IRS was not trying to collect taxes owed by their clients.
Congress defined harassment to include deliberate misuse of the law, tax regulations or IRS policies to harass or retaliate against a taxpayer. The new report, released by the Congressional Joint Committee on Taxation last week, was first disclosed on Monday by Tax Notes, a weekly journal.
The IRS data showed that from July 1998, when the law was enacted, to last May, the tax agency fired four of its 16,000 auditors for improperly threatening to audit a taxpayer. None of these cases rose to the level of what Congress called harassment because they involved spontaneous outbursts, not the willful misuse of the law, regulations or policies.
The tax agency also dismissed 102 of its 88,000 workers for failing to file tax returns and two for not reporting their entire income. In addition, one worker was fired for destroying records to cover up a mistake, an action that the IRS said did not result in any harm to a taxpayer.
Other data sent to Congress show that IRS workers are among the most compliant of taxpayers.
A separate report from the IRS shows that last year one in 12 taxpayers and one in 20 federal employees and retirees either did not file tax returns or owed back taxes, compared with one in 33 IRS workers. Many of the IRS workers who do not file tax returns are clerks who work only during tax season, but whose taxes are paid because they are withheld from their paychecks.
The need for the mandatory-firing sections of the law was disputed by Colleen Kelley, president of the National Treasury Employees Union, which represents IRS workers.
"The law is unnecessary and I would like to see it repealed or at least revised," she said. "The law fixes a problem that doesn't exist."
Kelley said any organization will have some misconduct in its ranks, but that four cases of misconduct among 16,000 auditors was insignificant.
Flynn, Roth's spokeswoman, said the data show that fears among IRS workers that the new law would result in their firing just for doing their jobs were unfounded. "Clearly there is a very fair process" of investigating complaints, she said after reviewing the data.
Kelley said the law has created an unfair burden on IRS workers "who must endure sometimes 18 months not knowing if they will be cleared once a complaint is made, all the time fearing they will be fired."
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