[Congressional Record Volume 143, Number 79 (Monday, June 9, 1997)]
[Senate]
[Pages S5395-S5396]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        INTERNAL REVENUE SERVICE

  Mr. ALLARD. Mr. President, I rise this afternoon because I would like 
to talk a little bit about the relationship of the citizens of this 
country to their Government, in this particular case, to the Internal 
Revenue Service. There is a real burden on most enforcement agencies. 
When they accuse somebody of a crime, they have the burden of showing 
beyond a reasonable doubt that the crime was actually committed by that 
particular individual. That type of burden doesn't exist with the 
Internal Revenue Service; for whatever reason, your name may come up 
for an audit, maybe because of some type of a filing that you did in 
your income tax form that sets off the computer alarms, whatever system 
that they have.
  That is one of the reasons why I am pushing legislation for a home 
office exemption. Many times, an audit by the Internal Revenue Service 
is an indication that you are using part of your home for business, and 
because of that, you are going to claim a deduction for part of the 
costs of your home because you are running your business out of that 
home.
  The Internal Revenue Service frequently approaches taxpayers and 
says, ``Look, we think there is a violation.'' The burden is upon that 
individual to prove they are innocent. So, obviously, the individuals 
have a great responsibility to keep good records and account for all 
their expenditures, and whatnot, so that they can justify whatever it 
is they are doing in the way of business which may allow them a tax 
deduction, for example.
  On the other hand, I think the agents for the Internal Revenue 
Service have a particularly awesome responsibility because of the added 
powers that we grant to them. I just share with this body that I have 
held more than 56 town meetings since the first of the year and have 
been very busy in talking to the people of Colorado--I represent the 
State of Colorado--and hearing about their concerns. It is not 
surprising that the most frequent issue that came up in the town 
meetings was related to taxes. People wanted capital gains reduction; 
they wanted inheritance tax reduction.
  But along with all this concern, they talked about their relationship 
with the Internal Revenue Service. A lot of them felt there was abuse 
of power by the Internal Revenue Service.
  There was a decision made last week by U.S. District Judge William 
Downes which I think highlights another case of taxpayer abuse by the 
Internal Revenue Service.
  Carole Ward was awarded $250,000 in punitive damages by the Federal 
Government from the Internal Revenue Service for wrongfully publicizing 
information about her. After auditing Ward's children's clothing 
stores--these were young adults, children who decided to go into 
business for themselves--after auditing the Ward's children's clothing 
stores, the Internal Revenue Service seized the stores and demanded 
$325,000 in back taxes. The Internal Revenue Service agents told 
passersby that Ward was involved in drug dealing.
  Judge Downes was very harsh on the Internal Revenue Service, saying, 
``This court gives notice to the Internal Revenue Service that 
reprehensible abuse of authority by one of its employees cannot and 
will not be tolerated.''
  He went on to describe the behavior of some Internal Revenue Service 
agents as grossly negligent and they acted with reckless disregard for 
a law meant to assure Americans that their tax matters are handled with 
confidentiality.
  While the vast majority of Internal Revenue Service agents and 
employees are dedicated public servants who work

[[Page S5396]]

hard to serve the public, it only takes one incident such as this to 
continue the undermining of public confidence with the Internal Revenue 
Service.
  Now, Carole Ward had the courage to go into the public arena and 
fight the Internal Revenue Service, but many American taxpayers are 
intimidated from responding when the IRS abuses take place.
  I am hopeful that last week's Federal court decision will prompt the 
Internal Revenue Service to recommit itself to serving the public 
responsibly and to weed out those agents and employees who abuse their 
power. I hope they think about their relationship with the taxpayers, 
not one to make criminals out of taxpayer citizens in this country, but 
to assist them in filling out their forms and meeting the requirements 
of the law.
  Again, I encourage all employees of the Internal Revenue Service to 
look at their added responsibilities and their added responsibility in 
relation to dealing with the taxpayers and make sure that everybody 
pays their fair share of taxes and nothing more.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call.
  Mr. HELMS. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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