[Congressional Record Volume 141, Number 113 (Thursday, July 13, 1995)]
[Extensions of Remarks]
[Pages E1440-E1441]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                         FROM THE HORSE'S MOUTH

                                 ______


                             HON. SAM FARR

                             of california

                    in the house of representatives

                         Thursday, July 13, 1995
  Mr. FARR. Mr. Speaker, Members on both sides of the aisle have been 
known on occasion for playing fast and loose with the facts and 
obscuring the truth with statistics.
  Tonight I'd life to submit for your consideration a different 
perspective.
  This one comes from someone in the field--a nose-to-the-grindstone 
Federal employee who works as a tax collector for the IRS. In 
correspondence I received from him, he tells me of the folly of 
Republican proposals ensconced in the budget resolution to cut funding 
for, and then privatize certain tax collection activities.
  His argument is clear: only the force of the Federal Government can 
compel tax evaders to comply and only well-trained, dedicated IRS 
agents have the wherewithal to produce the kind of results that 
Congress seeks in bringing scofflaws to justice.
  You may be tempted to put my comments down as partisan posturing but 
I submit here a copy of my constituent's letter for the Record and ask 
you to take it from one who knows.

     July 7, 1995.
     Hon. Sam Farr,
     Congress of the United States, Salinas, CA.
       Dear Congressman Farr, I just heard some of the provisions 
     of the House Budget Resolution passed last week in the name 
     of deficit reduction, and I am appalled at the contents. It 
     is clear that some members of Congress have taken leave of 
     their senses, and I hope that you can assist me in changing 
     their minds.
       As a federal employee, I strongly resent the fact the House 
     chose to ``balance the budget'' on our backs by increasing 
     the contributions we will have to make to our retirement 
     system, weakening our health insurance system, changing how 
     pensions are to be calculated, etc. As far as I'm concerned, 
     it was an act of cowardice, because law enforcement and 
     general government operations only constitute about 2% of 
     federal outlays. What about taking a look at the other 98%?! 
     However, Congress has never been known for its ability to 
     make the tough choices, so we expected that. We've had to 
     make sacrifices for so many years . . . I guess we can make a 
     few more.
       Much worse than that, however, are the seeds of `FISCAL 
     INSANITY' contained in the Treasury Appropriations portion of 
     the Resolution. Not only does it contain provisions for 
     testing the contracting-out of tax collection activities (a 
     supremely stupid exercise in futility), it cuts the Internal 
     Revenue Service's budget for the Compliance Initiative by 
     $130 million, Returns Processing by $130 million, and 
     enforcement by $268 million!! If the Republican majority in 
     the House thinks this is the way to achieve deficit 
     reduction. I know what they've been smoking--and they did 
     inhale!!
       Let me explain, I am a GS-12 Revenue Officer with the IRS 
     here in Salinas. Even if some of your Congressional 
     counterparts don't understand it, we at IRS do understand 
     money. After all revenue is our middle name!! First, we are 
     sworn, commissioned officers with broad powers of collection 
     granted to us by statute. Giving equal powers to a private 
     firm operating under contract would require the modification 
     or deletion of literally hundreds (if not thousands) of 
     existing laws! We have a rate of assaults and threats against 
     us that is twice that of the next highest agency, The Drug 
     Enforcement Administration. How is a private company going to 
     find people that will take that kind of abuse, collect taxes 
     as efficiently and effectively as we do and make a profit??!! 
     Whoever proposed that idea has an intelligence level 
     sufficient to qualify him as plant life. Second, actual 
     numbers are quite telling. The house has proposed a cut in 
     the
      enforcement portion of IRS budget of $268 million. Well, 
     enforcement is Collection, basically. So how much does 
     Collection collect? Here are some real numbers. My 
     Collection group consists of a Group Manager, a secretary, 
     a Revenue Representative (for simpler, smaller cases) and 
     thirteen Revenue Officers (five of whom are trainees). 
     During the first nine months (which included the highly 
     disruptive move of our entire office to a new location), 
     our group has collected over $9.8 million in back taxes. 
     At an average of $1.1 million per month that would be $13 
     million for a year. The total of salaries for our sixteen 
     people is $582,953 a year. That means $22.30 in delinquent 
     taxes collected for each dollar of our salaries. That is a 
     ``Return on Investment'' (ROI) of 2200%!! Where else can 
     you find an ROI like that? Real Estate? The Stock Market? 
     Collectibles? None of them come close--and we do it year 
     after year.
       So in order to reduce the deficit, the house intends to cut 
     the Enforcement portion of IRS' budget by $268 million. Well, 
     $268 million X $22.30 equals almost $6 billion that 

[[Page E 1441]]
     won't get collected. what a novel idea--you reduce the deficit by 
     adding to the deficit!!! The number of returns to be 
     processed increases each year, so we'll decrease the budget 
     for doing that. Compliance has been steadily eroding for 
     years so why not cut monies there and make it even easier for 
     the cheats, the scofflaws and the underground economy to 
     flaunt their noncompliance in the face of the taxpaying 
     public. All of this OZ-type logic is giving me a headache. I 
     guess I'd better hold onto Toto a little more tightly. It 
     doesn't look like we're in Kansas anymore.
       I hope that you share my concerns for the severely adverse 
     impact that this portion of the House Budget Resolution will 
     have not only on the administration and enforcement of 
     America's tax laws but on the budget itself? Killing the 
     goose that lays the golden egg is counterproductive.
       I've been a registered Republican all my life, but now I'm 
     ashamed to admit it. How the House leadership could even 
     permit (much less promote?) such a gross act of fiscal 
     irresponsibility is beyond my comprehension. They need to 
     rise above whatever petty personal grievances they may have 
     with the Service and think about their country.
       Taxes are the lifeblood of Government, and if the taxes due 
     cannot be collected because of budgetary insufficiencies, we 
     will only sink deeper into the morass of mounting deficits in 
     which we find ourselves already. In the end it will be the 
     body politic that will suffer, and the damage will last for 
     years.
        I hope you will exercise your good offices as Congressman 
     for our District by meeting with the Treasury Appropriations 
     Committee conferees next week and convincing them how short-
     sighted and ill-conceived this piece of budgetary lunacy 
     really is. Don't hesitate to give them copies of this letter 
     if you think it will help. Any assistance you can provide 
     will be greatly appreciated.
           Sincerely yours,
                                                  James R. Norman,
                                                  Revenue Officer.