[Congressional Record Volume 143, Number 150 (Friday, October 31, 1997)]
[Senate]
[Pages S11538-S11539]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        INTERNAL REVENUE SERVICE

  Mr. BUMPERS. Mr. President, everybody has heard that old expression 
about fools walk in where angels fear to tread. I have heard as a 
practicing lawyer, as a citizen and certainly as a Member of the U.S. 
Senate, as many tales about the IRS as anybody in this body. There have 
been unbelievable abuses, a lot of which have been aired in the 
hearings that Chairman Roth held in the Finance Committee.
  You don't get accomplished diplomats for what we pay auditors in the 
IRS. Oftentimes, you get somebody who really is, indeed, abusive. Even 
though he is spending the taxpayer's money he is auditing, he can be 
very unpleasant. It isn't just the abusiveness of the auditors. 
Occasionally it is also their incompetence.
  I was trying to help somebody one time and made a phone call back 
when I was practicing law. ``We can't talk to you; send us a letter 
authorizing us.''
  I was a little offended by that, but at the same time, I understood. 
Anybody could call and say, ``I'm calling on behalf of'' somebody else. 
They don't know who they are, so I had to get an affidavit from my 
client and send it in saying I was authorized to represent her in a tax 
dispute.
  But my point is all this legislation to abolish the IRS without 
putting anything in its place is not all that troubling to me because 
something has to give. You can't abolish the IRS and abolish the Tax 
Code without replacing it with something.
  What you replace it with certainly ought not to be a flat tax. So far 
as I am concerned, the flat tax was created by the Flat Earth Society. 
A flat tax, No. 1, is not ever going to pass here because invariably it 
does not allow people to deduct interest on their homes. It doesn't 
allow charitable contributions. The church people, the universities of 
the country who depend so extensively on giving are not ever going to 
sit still for a flat tax. If the middle- and lower-income groups of the 
country knew what the flat tax would do to them, they wouldn't stand 
still for it.
  I can promise you that under every flat-tax scenario I have seen, 
people who make between $30,000 and $100,000 are going to wind up 
paying more, and people who make more than that are going to wind up 
paying less. I have not seen one single flat-tax proposal that doesn't 
take all the progressivity out of the Tax Code.
  I can tell you, I only have 1 more year in the Senate, but I am not 
going to vote during that year for anything that even smacks of a flat 
tax. Oh, everybody thinks it is so simple. Do you know why the Tax Code 
is so complex? Because of the U.S. Congress. They drafted it. We just 
got through adding about 800 pages to it with the so-called balanced 
budget bill.
  Of course, it is complex. When you consider the myriad of 
transactions that occur in this country and you are trying to deal with 
all of them and there are lobbyists all over the city asking for 
special favors--this little thing in our business, and this little 
thing in our business--that is the reason the code is indecipherable 
today. So don't blame the IRS because the Tax Code is indecipherable, 
blame the U.S. Congress. We are the ones who drafted every word of it.
  So, Mr. President, bear in mind that for the last year--and the IRS 
has many statistics on it--there is about $100 billion, somewhere 
between $92 and $95 billion in tax evasion every year.
  What does that mean? Let's assume in the year 1997 that we collected 
$600 billion in personal income tax, and that is probably pretty close 
to correct. Assume further that the IRS had been able to collect the 
$100 billion which is not being paid that ought to be paid. You could 
reduce taxes by $100 billion. That would be pretty nice.

  You hear all kinds of talk around here about tax cuts. But nobody 
ever wants to give the IRS any more money to enforce the Tax Code 
against those people who are paying no taxes. One of the reasons our 
taxes are as high as they are is because of the underground economy 
operated by people who deal in cash and do not pay taxes for the 
privilege of being an American citizen.
  I am inclined to support--I read an op-ed piece in the Post this week 
strongly opposed to this idea. I do not know whether it was this week 
or not. But this business of shifting the burden to the IRS from the 
taxpayer has some merit.
  I offered a bill in 1980, and it passed the Senate. It never passed 
the House, but it passed the Senate. The Republicans liked it so well 
they put it in their platform in the convention in 1980. But I had a 
provision that said, any time a regulator comes into your plant and 
charges you with a violation, you would have to sustain the burden of 
proving that that regulation was valid.
  If somebody comes into your plant and says, ``Your fire extinguisher 
is 2 inches too high off the floor and, therefore, I'm fining you 
$100,'' it would be incumbent, under existing law, for the person who 
owned that plant to prove that Congress did not intend for him to pay a 
fine because his fire extinguisher was 2 inches too high off the 
ground.
  Under my bill that passed the Senate in 1980, the burden would have 
shifted to the regulator, the guy who is trying to impose the fine. He 
would have to prove that the regulation is valid and within the intent 
of Congress. You shift the burden. But my bill excluded the Internal 
Revenue Code. I won't go into all the reasons we did that. It did not 
seem workable.
  But now I am going to look very closely at this proposal of Bill 
Archer's, from the House, to shift the burden to the IRS when they 
allege that somebody is deficient or made a mistake on their tax return 
or generally state when the IRS is accusing somebody of owing money, 
they will have to sustain the burden of proving that instead of 
shifting the burden immediately to the taxpayer.
  Mr. President, I had one or two other issues I was going to talk 
about. But in the interest of expediting this evening and allowing 
people in the Senate to get out of here--they all look at me with mean 
looks, so I know everybody is wanting to shut this place down--I will 
forgo a couple of other items and save them for next Friday afternoon.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. NICKLES. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.

[[Page S11539]]

  The PRESIDING OFFICER. Without objection, it is so ordered.

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