[Congressional Record Volume 143, Number 143 (Wednesday, October 22, 1997)]
[Senate]
[Pages S10956-S10957]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BREAUX (for himself and Mr. Kerrey):
  S. 1308. A bill to amend the Internal Revenue Code of 1986 to ensure 
taxpayer confidence in the fairness and independence of the taxpayer 
problem resolution process by providing a more independently operated 
Office of the Taxpayer Advocate, and for other purposes; to the 
Committee on Finance.


                  the taxpayer protection act of 1997

  Mr. BREAUX. Mr. President, this afternoon, I rise to introduce 
legislation representing, I think, a very important step in giving 
American taxpayers an additional tool for them to use in solving 
problems that they have when they are entering into a dispute with the 
Internal Revenue Service. My bill would ensure that American taxpayers 
have someone with real authority and significant resources who will 
represent their interests when dealing with IRS, a true taxpayer 
advocacy organization which will be on the side of the American 
taxpayer and not on the side of Washington bureaucrats.
  I want to also point out that I am proud to be a cosponsor of the 
Kerrey-Grassley bill, which is a broader restructuring of the entire 
Internal Revenue Service, that came about as part of the work that the 
bipartisan commission studied for over a year's time.
  The bill, however, that I am introducing today will strengthen the 
part of the bill dealing with the Office of Taxpayer Advocate by making 
the advocate's office much more independent than it is now and giving 
it more muscle in representing the interests of American taxpayers.
  Last month, our Senate Finance Committee had 3 days of hearings 
looking at the practices and procedures within the Internal Revenue 
Service. In addition to hearing from taxpayers who had been mistreated 
by the Internal Revenue Service, our committee also heard very shocking 
testimony from both current and former IRS employees. These witnesses 
clearly underscored the importance of doing some major changes in how 
the Internal Revenue Service operates.
  We heard, for instance, Acting Commissioner of IRS Mike Nolan say, 
``The IRS is undergoing tremendous change.''
  That is very encouraging and also very long overdue. My concern is 
that there is a big disconnect between the Commissioner's office and 
over 100,000 IRS employees who work all over America, and even a 
greater disconnect between some of these employees--not all, but some--
and the American taxpayer. This became very painfully clear as a result 
of our 3 days of hearings.
  I want to point out that the IRS is a very convenient political 
punching bag for many, and speeches condemning the IRS are met with 
widespread applause at any type of a townhall meeting you want to have. 
But this is not an issue that we should demagog. Americans want us to 
solve the problem and not just pass the blame around and blame the 
other side for their failures.
  As was the case with the balanced budget amendment, Republicans and 
Democrats need to come together in a bipartisan fashion and act 
responsibly to come up with some real changes that are going to help 
address this problem and protect the American taxpayer.
  Unless we don't want a national defense or a public highway system or 
schools and national parks, we have to ask ourselves, what will we have 
if we just eliminated the Internal Revenue Service? When the Department 
of Defense, I am reminded, had all of these problems buying $200 toilet 
seats and $500 hammers, we didn't do away with the Department of 
Defense, we reformed it. We gave them specific instructions on how they 
should conduct their business. As a result, we still have a Department 
of Defense, thank goodness, but it is operating more efficiently and 
more effectively and not making the type of mistakes that we saw in the 
past. The bottom line is we reformed it. We have to do the same thing 
with the Internal Revenue Service.
  There are many issues to look at when we talk about how to 
restructure. One is IRS management, how to model a new oversight 
structure at the IRS that would make it more responsive and accountable 
to their management problems.
  There also is a separate issue, and that is how to strengthen the 
hand of the American taxpayer when they have to deal with the Internal 
Revenue Service and let our American taxpayers know that somewhere 
there is someone who is on their side when they have problems with the 
Federal Government and specifically with the IRS.
  On the first issue of management, attention has focused on who should 
sit on the board of directors that runs an IRS and what kind of 
authority and responsibilities this board would have. I

[[Page S10957]]

think there is widespread agreement that the management and oversight 
of the IRS needs to improve dramatically. We need to have more private 
sector involvement in that board of directors.
  The Finance Committee is going to have hearings on the restructuring 
question next week. I hope that we have a fair and open discussion 
about what needs to be done, because that is the only way a solution 
will be arrived at. I personally think we should try and model the 
management of IRS on a real board of directors, a concept that is part 
of the bill introduced by Senator Kerrey and Senator Grassley and also 
Congressmen Portman and Cardin in the House of Representatives. I am a 
cosponsor of their legislation and will be actively participating in 
getting that done.
  There is no reason why the Internal Revenue Service shouldn't be just 
as advanced technologically from an organizational standpoint as any 
Fortune 500 company in America. Our goal should be to have an oversight 
board that improves the IRS accountability and also their operations. A 
better managed IRS will translate into better customer service for 
taxpayers.
  But just as important, however, we need to look at ways to improve 
the everyday outcomes when taxpayers have a problem and have to engage 
with the IRS. An oversight board may solve some of those, but we need 
to put in place some independent group that is going to represent the 
interests of the American taxpayer on a day-to-day basis, and that is 
what my legislation would do.
  Currently, the IRS has an Office of Taxpayer Advocate whose job is to 
represent the American taxpayers in dealings with the IRS. The problem 
with the current structure, however, is that this taxpayer advocate 
does not have enough independence. The taxpayer advocate in each 
district reports directly to the district director of the IRS. 
Taxpayers need someone who will work for them and represent their 
interests and not just be an employee of the IRS.
  My bill would make the taxpayer advocate a great deal more 
independent by giving it more resources, more authority and more 
responsibilities. The American taxpayers would then have someone 
working for them and not just working for the IRS when they need help.
  My bill would do the following:
  No. 1: A national taxpayer advocate would be appointed directly by 
the President, with the advice and consent of the Senate. He or she 
would not continue to be appointed by the IRS Commissioner. The 
national taxpayer advocate would also not be selected from the ranks of 
the IRS, to make sure that person is truly independent.
  No. 2: The national taxpayer advocate will make the hiring and firing 
decisions regarding the heads of the local taxpayer advocate office in 
the IRS district and service centers. No longer would the local 
taxpayer advocate be hired and fired by the district director.
  No. 3: The initial contact between the IRS and the taxpayer will 
include a disclosure that the taxpayers have a right to contact their 
local taxpayer advocate and information on how to contact them so that 
the taxpayer will know that this office is there and it is there to 
protect their legitimate interests.
  No. 4: The local taxpayer advocate office would have a separate phone 
number, fax number, and post office box apart from the IRS district 
office.
  And finally, No. 5: The taxpayer advocate would also have the 
discretion not to disclose taxpayer information to IRS employees, 
another tool which could help taxpayers.
  All of these measures are designed to give the taxpayer advocate a 
much stronger voice, a much stronger hand in representing American 
taxpayers. What taxpayers in this country need is someone who is on 
their side, not on the Government side, who has the resources to go up 
against the IRS.
  I have been working closely with Senator Kerrey and pleased he 
supports including my provision in the overall bill that they are 
planning to introduce. So, I think we are making progress. I think we 
ought to be doing it in a continued responsible fashion, in a 
bipartisan fashion. If we can get this done, I just suggest that the 
American taxpayer will now know that there is some office that is on 
their side representing their interests before their Government.
                                 ______