[Congressional Record Volume 143, Number 153 (Wednesday, November 5, 1997)]
[House]
[Pages H10040-H10046]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INTERNAL REVENUE SERVICE RESTRUCTURING AND REFORM ACT OF 1997
The SPEAKER pro tempore. In the debate on H.R. 2676, the gentleman
from New York [Mr. Rangel] has 7\1/2\ minutes remaining and the
gentleman from Ohio [Mr. Portman] has 6\1/4\ minutes remaining.
The Chair recognizes the gentleman from New York [Mr. Rangel].
Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
{time} 1415
I rise in support of H.R. 2676. First, I would like to thank the
chairman of the Committee on Ways and Means for creating an atmosphere
which allowed the gentleman from Maryland [Mr. Cardin] and the
gentleman from Ohio [Mr. Portman] to take the best that came out of the
commission, not only to work with it in a bipartisan way, but to bring
it to Members who did not serve on the commission so that they would be
able to work and improve upon it.
The administration has had strong objections over the original
document. This could have been played up politically that the President
was trying to protect the status quo, but the Secretary of Treasury was
not only involved in the meetings but encouraged to know that no
Republican and no Democrat was locked in concrete except to the extent
that the IRS needed improvement and it had to be done and it was going
to be done now.
The Democratic Leader, the gentleman from Missouri [Mr. Gephardt],
publicly said that they were not there, that the Democrats were not
there, except to join with our Republican friends to get a bipartisan
solution to a serious problem.
So, Mr. Speaker, we are here today for the first time in a long time
knowing that we have taken one gigantic step forward to give some small
comfort to the taxpayer that at least we, in the Congress, are
providing the oversight to try to make the collection easier.
But, Mr. Speaker, we all agree that this is only a first step. We
cannot give a very complicated, complex Tax Code to anybody and expect
them not to have problems in its execution. If anyone abuses their
rights as a public servant with the taxpayer, that person should be
pulled up at the roots and got rid of. There should be no excuse for
any public servant treating taxpayers in a disrespectful way. But there
should be no excuse for us to talking about pulling up the IRS by the
roots unless we are prepared to say we are going to pull up the Tax
Code by the roots.
And I would want to say this, that if we can get this Portman-Cardin
spirit
[[Page H10041]]
of cooperation going, let us try to do it in talking about this bus
trip that is going to pull up the Code by the roots, and I ask whether
or not there is an extra seat on that bus that I can join in. The only
thing I would want to know is, where is the bus going, what is the
itinerary, how much is it going to cost, and, most importantly, when is
it going to end? This bus that has been pulling up the Tax Code by the
roots has been in a bus depot for 3 years.
If we are going to do anything to correct the system, and God knows
we agree it has to be simplified, let us try to do this too in a
bipartisan way, the same way we have been so successful in recognizing
a problem and trying to bring a resolution.
Finally, Mr. Speaker, I would want to say that I would encourage the
administration to take a lesson from the books of the House of
Representatives and not only just support this, but to encourage the
other body not to politicize this issue.
We are moving swiftly, we are moving swiftly toward the end of our
legislative business for this year. It would do us no good to
compliment each other for this bipartisan effort if the other body is
not on board. We all know that next year something chemically is going
to take over us as we all seek reelection. I would suggest that it is
more important to get this important piece of legislation passed than
to give other people an opportunity to make political hay out of it.
I conclude by thanking the leadership on both sides of the aisle,
again, the gentleman from Ohio [Mr. Portman], the gentleman from
Maryland [Mr. Cardin], and those Members who worked so hard, not to get
their names in the newspaper or to have TV interviews, but to do what
was best for the country and what was best for the Internal Revenue
Service, but most importantly, what was in the best interests of
American taxpayers.
Mr. Speaker, I yield back the balance of my time.
Mr. PORTMAN. Mr. Speaker, I yield the balance of my time to the
gentleman from Texas [Mr. Archer], the chairman of the Committee on
Ways and Means, and, as I said earlier this afternoon, we would not be
here on the floor this afternoon debating this critical issue if not
for the gentleman from Texas, [Mr. Archer].
Mr. ARCHER. Mr. Speaker, I thank the gentleman from Ohio for yielding
this time to me. But before I close, there is one person here who
deserves very special recognition, and that is Bob Brockamp of
Prescott, AZ, who is the personification of an IRS victim. He and his
family have suffered an injustice that no one should endure.
In 1994, 93-year-old grandfather Stanley McGill mistakenly sent a
$7,000 check to the IRS. Unfortunately, by the time Bob and his family
caught the error and tried to get their money back, the 3-year statute
of limitations on refunds had expired, and even though the IRS admitted
that Bob's grandfather owed only $700, not $7,000, they would not
refund the balance of the money.
Mr. McGill was senile and had made the same mistake before by adding
extra zeros to checks mistakenly and overpaying his bills by thousands
of dollars. But in these instances where his local hospital and
pharmacy were overpaid, they sent the money back. The IRS would not.
Bob's family fought the IRS for 8 years all the way to the U.S.
Supreme Court. A 3-year statute of limitations prevented the IRS from
returning the money that was not theirs in the first place said the
Court. And while it is too late to help Bob and his family, the bill
that we vote on today allows the IRS finally to waive the statute of
limitations on refunds for the sick and the disabled, ensuring that no
other American will have to go through what the Brockamp family went
through.
Mr. Speaker, the U.S. Congress owes Bob and his family an apology.
The last thing an ailing senior citizen and their family should have to
do is worry about the IRS. Thanks to the good fight that Bob and his
family waged to obtain justice, thousands of taxpayers in the future
will worry no more.
And, Mr. Speaker, I am delighted the President has finally seen the
light and decided to support this bill. The gentleman from Ohio [Mr.
Portman], the gentlewoman from Connecticut [Mrs. Johnson], and the
gentleman from Maryland [Mr. Cardin] worked long and hard to put it
together, and, as we have heard today, they deserve much praise.
But, Mr. Speaker, in the end our task is not to thank each other for
what we do today. Our thanks should go to the American people, the
people who sent us here. Today's vote is a victory for all Americans
who believe Washington should not change its ways to greater and
greater power but should change its ways so the American people will
not have to change theirs.
Congress no longer solves problems by raising taxes, as was true for
too many Congresses. We now solve problems by restoring hope, power,
and opportunity to the people who pay the taxes.
Mr. Speaker, I am proud to add that fixing the IRS continues a
remarkably productive record for this Congress. We cut taxes and passed
legislation to balance the budget, we saved Medicare from bankruptcy,
and we fixed the failed welfare state. We cut the cost of the Congress
of the United States by $200 million a year, and now we are fixing the
IRS. We reduced the deficit from $203 billion in November of 1994 to
$30 billion today. More than 5 million new jobs have been created,
interest rates have dropped from 8 percent to 6 percent, and the stock
market has virtually doubled.
But mark my words, we are just warming up. I believe we must
completely and totally get the IRS out of the lives of every single
American. We must look the IRS in the eye and say it is not their
money, it is the people's money. The politicians and the IRS must stop
reaching into the people's wallets, taking from them what the people
have earned and what they need for themselves.
So, Mr. Speaker, the bill we will vote on today represents more than
fixing the IRS. The bill is about our values, our principles, our
convictions. It is about right and wrong; it is about putting taxpayers
first.
As the first chairman of the Committee on Ways and Means in memory
who continues to do his own tax return, and, I must say, in longhand,
not by computer, I can say today to the American people, with this vote
we heard them, we understand them, we know what they are going through,
we are on their side. They are the producers, they make things happen,
we should follow in Washington, and that is what this bill is all
about. So instead of thanking each other, we should say thanks to the
American people who have made this the greatest country on the face of
the Earth.
Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Speaker, today the House
considered legislation to reform and restructure the Internal Revenue
Service. The House voted overwhelmingly to approve this reform
legislation and I also voted for the bill. I did have concerns over a
proposed shift of the burden of proof but I feel that the provision was
changed enough to ensure that the Government's hands would not be tied
when going after tax evaders and those who commit tax fraud.
The congressional hearings on the IRS not only opened the public's
eyes to intimidation and harassment by a small number of IRS agents and
supervisors, the hearings have also motivated Congress to offer a large
number of bills that seek to change the way that the IRS does business.
I admit that the IRS has a few employees who abuse their power,
forgetting that they are servants to the public, not masters of it. I
can also personally attest to the fact that there are problems in the
manner in which the IRS conducts audits and undertakes collection.
However, Mr. President, I am afraid that the anti-IRS rhetoric being
employed by some in Congress has unfairly attacked and tainted the
majority of hardworking and honest IRS employees and is negatively
affecting their morale and productivity.
Mr. Speaker, I am honored to have a large number of hardworking and
honest IRS employees in my district at the IRS Mid-States Regional
Office.
Mr. Speaker, those employees are not afraid of a new debate on the
role of the IRS. They are not frightened by calls for reform and making
their fellow workers more accountable to the taxpayers. What they are
concerned about is that they are being unfairly singled out and
negatively portrayed as unfit, uncaring, and unprofessional employees
of the Government.
As Congress continues to consider more IRS reform initiatives, which
now number between 10 and 11, we must be careful and responsible with
both our words and actions. We must be sensitive to how our words
affect
[[Page H10042]]
those who are truly committed to public service.
I have heard from some of my constituents who work for the IRS and I
am truly concerned about the morale of these dedicated and good
employees as a result of the extremely negative rhetoric which well-
intentioned lawmakers have used to describe the operation of the
agency.
Mr. Speaker, we must remember that most IRS employees want to work
with--and have worked with--lawmakers to bridge the gap between the IRS
and the taxpayer.
Mr. Speaker, today I rose in favor of sensible, well-thought out
reform of the Internal Revenue Service but I ask that we truly focus on
reform, not rhetoric.
At the same time, I stand to support those great employees at the IRS
midstates regional office in Dallas. They believe in public service,
customer service, and accountability to taxpayers. They are patriotic
and deserving of our respect and thanks, not our rhetoric and disdain.
Mr. KILDEE. Mr. Speaker, I rise today to express my strong support
for H.R. 2676, the Internal Revenue Service Restructuring and Reform
Act. I believe everyone would agree that commonsense reform of the IRS
has been long overdue.
Mr. Speaker, over the years, I have had many constituents call my
Michigan offices to complain about problems with the IRS. In fact, each
year, I work with our local IRS office to put together a tax assistance
night where IRS employeers actually work directly with taxpayers to
address their questions.
This bipartisan legislation will set up a new citizen oversight board
and make the IRS more accountable to average Americans. Most
importantly, this bill will ensure that the sacred principle of
innocent until proven guilty is extended to every hard-working, honest
American.
This bill is the critical first step to ensuring that our tax system
remains both fair and equitable to all working individuals and
families. That is why I urge my colleagues to support H.R. 2676.
Mr. CRANE. Mr. Speaker, I rise in support of H.R. 2676, the Internal
Revenue Service Restructuring and Reform Act.
First, I would like to compliment my Ways and Means colleague, Mr.
Portman, who served as a cochairman of the IRS restructuring
commission, for his work on this issue. I also want to thank our
chairman, Bill Archer, for the prompt committee action on the IRS
commission recommendations.
My office regularly assists my constituents who have had problems
dealing with the IRS and I am quite familiar with the frustrations of
taxpayers dealing with this agency. Of course, opposition to paying
taxes and a mistrust of government is ingrained in Americans. Before
our war of independence, colonists showed their disapproval of a
British tax with the Boston tea party. After the Revolution, Americans
took on our newly formed government with the whiskey rebellion. While
we have not witnessed similar events in recent history, the IRS is
easily the most hated agency of the Federal Government. But the hatred
of the IRS is not just the hatred of taxes, but a genuine fear of the
seemingly unchecked power the IRS wields over taxpayers.
Congressional hearings this year have demonstrated that the IRS is an
agency out of control. Rather than serving taxpayers, IRS bureaucrats
too often make Americans feel like slaves to the government. We know
that IRS managers established audit goals for their employees to
advance in the agency. In other words, IRS employees performance was
evaluated by the amount of money extracted from taxpayers, not by
dealing with the merits of each individual taxpayer's return. IRS
employees came before Congress only under the condition of anonymity
because they feared retribution by their colleagues. Taxpayers from all
over the United States told stories of intimidation and clear abuses of
power exercised by IRS agents. It is clear that many IRS employees were
living up to their ignominious reputation.
To the credit of IRS employees, they do have a difficult job. The
Internal Revenue Code is thousands of pages of ambiguous laws and
regulations which can be interpreted, and often is, any number of ways.
This is one of the reasons I have argued for so many years that
Congress must scrap the current tax code and replace it with a flat tax
that applies the same tax rate to all Americans simply and fairly.
Although this bill does not replace the Tax Code, I believe the
reforms proposed in the bill, including the establishment of the
oversight board will go a long way in addressing some of the problems
at the IRS. Now, citizen board members will sit in judgment of the IRS
for a change. I am also encouraged that this bill will, in many
circumstances, shift the burden of proof from the taxpayer to the IRS.
While thieves, murderers, and rapists are innocent until proven guilty
in America, taxpayers are assumed guilty by the IRS until they prove
themselves innocent. I know my Democrat friend Jim Traficant has worked
tirelessly on this issue and has made the point that it took a
Republican Congress to actually get this provision put into law. I have
proudly supported him in his efforts over the years and thank him for
his work.
I also want to mention some of the other reforms in this bill.
Specifically, the bill will allow taxpayers to get reimbursed for
attorney's fees when they prevail against the IRS. Another provision
will extend the privilege of confidentiality to conversations with tax
accountants who provide the same tax advice that tax attorneys provide.
The bill will also protect innocent spouses from tax liability on joint
returns when they are unaware of misstatements or misreporting made by
the other spouse.
Mr. Speaker, clearly the American people are eager to have these
reforms. I am glad to see that President Clinton finally got that
message and has agreed to support this bill. I urge all my colleagues
to support H.R. 2676 and I hope that we can soon see it enacted into
law.
Mr. DAVIS of Florida. Mr. Speaker, today I rise in support of H.R.
2676, the Internal Revenue Service Restructuring and Reform Act, an
important first step in restoring the American taxpayer's faith both in
the tax system and in the ability of their government to be efficient
and responsive to their needs. This legislation, stemming largely from
the Kerry-Portman Commission's recommendations, represents true
bipartisan cooperation to address the growing concerns of citizens and
their elected representatives over the management and activities of the
IRS.
H.R. 2676 makes substantial improvements to both the oversight and
the management of the IRS, incorporating increased input from the
private sector while protecting the overall integrity of the agency. In
addition, this bill contains provisions designed to strengthen the
rights of the American taxpayer when confronted by the IRS, including a
long overdue shift of the burden of proof within the U.S. Tax Court
from the taxpayer to the agency. Certainly, our tax laws, like the rest
of our judicial system, should be based on the presumption that a
citizen is innocent until proven guilty.
While I support these much needed changes to improve the
responsiveness and efficiency of the IRS, we must not forget that many
of the problems this legislation seeks to remedy have their roots in
the Internal Revenue Code itself, which continues to grow in complexity
with each new tax law passed by Congress. Even the important tax cut
passed earlier this session as part of the balanced budget agreement
added hundreds of additional pages to the Internal Revenue Code. I
believe our next step must be to thoroughly re-evaluate the overall Tax
Code and begin a meaningful dialog on alternatives to the current
system.
Mr. Speaker, I urge all of my colleagues to support the legislation
before us today which will ensure that, within the current tax
structure, the American taxpayer will receive fairer and more efficient
treatment by the Internal Revenue Service and I look forward to working
with my colleagues on both sides of the aisle in exploring options for
streamlining the Tax Code.
Ms. HOOLEY of Oregon. Mr. Speaker, it's time to overhaul the Internal
Revenue Service--the most inefficient and the least user-friendly
Government agency in America.
If any Member of this Congress still has doubts about legislation to
overhaul our Nation's tax collecting agency, they should consider two
cases of IRS abuse that I have been confronted with in the last few
months. The first involves a woman whose bank account was frozen
because her ex-husband died owing a tax debt that he had accumulated
after the couple's divorce. The second involves a single mother who is
working her way through college. The IRS lost the rebate check she was
owed. The check was deposited in someone else's bank account, and 8
months later she still hasn't gotten her money--let alone the interest
she would have earned on the refund.
These women are representative of the myriad of miscalculations and
errors which have plagued the IRS in recent years. My district is not
alone in facing an out of control IRS, naturally, and the difficulties
that have cost these two women money, time, and peace of mind are
repeated daily with alarming regularity around the country.
Reform of this beleaguered agency can no longer be postponed, and I
believe that the IRS Restructuring and Reform Act accomplishes this
task in a fair, efficient and bipartisan manner. Once this bill becomes
law, I am confident that taxpayers will soon be blessed with a fairer,
more user-friendly Internal Revenue Service.
Mr. PACKARD. Mr. Speaker, common sense tells me that the IRS is far
too large and intrusive. Consider that the IRS has more than 136,000
employees, while the INS has only 6,500 border patrol agents--about 20
times more people to take our money than to protect our borders. That
is simply outrageous.
[[Page H10043]]
Today, the House will consider the IRS Restructuring and Reform Act.
This legislation will enact 28 new protections that enhance taxpayer
rights when citizens become involved in IRS dispute and will
effectively shift the burden of proof from the taxpayer to the IRS in
court proceedings. By leveling the playing field between honest
citizens and an out of control Government agency, the American
taxpayers come up the big winners.
Mr. Speaker, all people want is a fair system. In America, that
should never be too much to ask for. Nobody should be made to feel like
a criminal for trying to do the right thing. The IRS has terrorized
everyone from retirees, homemakers, single-parent families, and even a
Little League girls softball team. We need to put an end to that.
Republicans hope this is the first step toward a comprehensive
overhaul of the current Tax-Code and elimination of the IRS altogether.
We are now clearly on our way to eliminating the IRS and its code
altogether. More and more inside-the-beltway critics, including the
President, are simply getting out of the way as Republicans move this
agenda forward. Those who have defended the IRS in the past realize
this is a battle they just can't win. I encourage all of my colleagues
to support the IRS Restructuring and Reform Act.
Mr. BENTSEN. Mr. Speaker, I rise today in support of H.R. 2676,
legislation to reform the Internal Revenue Service and better protect
the rights of taxpayers. I am proud to be a cosponsor of this
legislation. The need for this legislation could not be more clear
after the recent Senate Finance Committee hearings that exposed IRS
practices that are abusive to taxpayers and simply unacceptable for a
Government agency. These hearings rightly angered most Americans,
including myself. They added to the finding of the National Commission
on Restructuring the IRS that found the agency to be woefully
mismanaged and plagued by computerization problems and poor customer
service.
These hearings and the commission's findings make it imperative that
Congress act quickly to reform the IRS to improve its management, make
it more customer-friendly, and better protect the rights of taxpayers.
This legislation shifts the burden of proof from taxpayers to the IRS
in disputes in civil tax court proceedings. Last year, approximately
30,000 cases went to tax court. Under the legislation, taxpayers would
still be required to back up claims with documentation, but the court
would no longer presume that the IRS is correct when the facts are in
dispute.
It also creates an independent 11-member board to oversee IRS
management and develop strategy for the agency. The board would be made
up of eight members from the private sector, the Treasury Secretary,
the IRS commissioner, and a representative of the IRS employees union.
It expands the existing Taxpayer Bill of rights by creating 28 new
taxpayer protections. these rights will allow taxpayers to sue the IRS
for up to $100,000 in damages if IRS agents are negligent when trying
to collect taxes; makes it easier for an innocent spouse to escape
liability for taxes owed by the other spouse or an ex-spouse; make more
cases eligible for resolution in a tax version of small-claims court;
provide funding for clinics to help low-income taxpayers; and extend
the attorney-client confidentiality privilege to accountants and others
authorized to practice before the IRS.
These protections build on the existing Taxpayer Bill of Rights,
which Congress enacted in 1996 with my support. The 1996 law created an
Office of Taxpayer Advocate at the IRS to investigate taxpayer
complaints about IRS enforcement actions. That law also raised the
penalties for IRS employees who recklessly and intentionally disregard
the Internal Revenue Code when dealing with taxpayers.
The legislation also places new limits on penalties to taxpayers for
repayment of back taxes. It reduces the maximum penalty for 25 percent
of the unpaid amount, plus interest, to 9.5 percent for taxpayers who
reach a payment agreement with the IRS. Another change would equalize
interest penalties for underpayment and overpayment of taxes.
Currently, the IRS charges taxpayers a higher interest rate as a
penalty for underpayment than the IRS itself pays when it owes
taxpayers for overpayments. This is unfair and should be changed.
Together, these changes will save taxpayers more than $1.2 billion over
5 years.
The IRS has the critical job of enforcing our tax laws and raising
revenue, but there is no reason why it cannot treat taxpayers more like
customers and less like potential criminals. Government employees,
including those at the IRS, are providing an honorable service to the
public, but they must always remember it is the public for whom they
work. That is what we do with this legislation Congress is about to
approve.
Mr. GALLEGLY. Mr. Speaker, I would like to express my strong support
for restructuring the Internal Revenue Service.
We have heard time and again the horror stories taxpayers have
experienced at the hands of this ruthless agency. H.R. 2676 levels the
playing field between taxpayers and the IRS and reins in its ominous
power. The Portman-Archer reform bill protects the taxpayers and
restores their rights.
Holding the IRS accountable to the taxpayers is a complete reversal
from how the system currently operates. This legislation prohibits IRS
employees and IRS units from being evaluated based on enforcement
results, but rather requires evaluations be based on the quality of
taxpayer service they provide. Moreover, H.R. 2676 creates an
independent board to oversee the IRS, taking control from political
appointees at the Treasury Department and giving the board real power
and authority to hold the IRS accountable for a change.
The reforms also include the unprecedented shift of the burden of
proof from the taxpayer to the IRS, and, it enhances taxpayer rights
with 28 new protections when citizens become involved in disputes with
the IRS.
Mr. Speaker, fixing the IRS is no simple task, but this legislation
is the first step in protecting taxpayers and the complete overhaul of
our tax system. It's time the IRS was accountable to the American
public, not the other way around.
Mr. FRELINGHUYSEN. Mr. Speaker, I rise today in support of H.R. 2676,
the Internal Revenue Service Restructuring and Reform Act of 1997. It
is time to make the Internal Revenue Service as accountable to the
taxpayer as the taxpayer is to the IRS.
Millions of Americans are still talking about the recent IRS hearings
on Capitol Hill, where the abusive activities of the Internal Revenue
Service were revealed. These activities included collection quotas and
``financial status'' audits, utter lack of service, and the personal
and economic devastation of innocent and decent taxpaying citizens.
The American people heard from IRS agents testifying behind privacy
screens with their voices altered telling about which innocent
taxpayers they selected for audits, namely, those who didn't have the
resources to fight back. We also heard how just getting a question
answered could become a tiresome process for a taxpayer. And
furthermore, that only 21 percent of the calls the IRS receives are
even answered, and, of those, too many are answered incorrectly. In
1993 alone, the IRS gave 8\1/2\ million wrong answers to taxpayers
trying to comply with Byzantine tax regulations.
Mr. Speaker, we all recognize that there are thousands of hardworking
employees at the IRS that do their job well. But while it is
understandable that extracting $1.5 trillion from American taxpayers by
enforcing a tax code thousands of pages long is no easy task, the
bottom line is that the IRS' mistreatment of taxpayers must be stopped.
Mr. Speaker, the solution to curbing IRS abuses has two parts.
First, the IRS must be reformed. H.R. 2676 is the first comprehensive
reform legislation of the Internal Revenue Service since 1952. This
bill will restructure the IRS by forming a nine-member oversight board,
made up of private citizens, with real authority to hold the IRS
accountable for change.
New taxpayer rights would be enacted, including the right to sue for
negligence, collect legal fees and be notified of the reasons for an
audit. The Taxpayer Advocate's Office also would be strengthened, and,
most significant, the burden of proof in tax disputes would be shifted
from the taxpayer to the IRS. Taxpayer service would become a top
priority of the IRS and the practice of evaluating employees and IRS
offices on collection results would be prohibited.
Second, now is the time to begin a national debate on reforming the
current tax system by making it fairer and simpler. Put bluntly, we
need a system that the American people can comprehend. Several
competing plans have already been proposed. They include plans for a
flat income tax, a retail consumption tax or a value-added tax. This
most important debate must be taken directly to the American people to
get their ideas and suggestions for change.
Mr. Speaker, for 60 years Washington patched together a tax code so
complex that it threatens the basic fairness of the system. Through the
many loopholes built into the code, individuals pay vastly different
amounts in taxes, and, in some cases, pay no taxes at all. For this
very reason, the American people have become cynical about our tax
system. Genuine tax reform and simplification, and comprehensive reform
of the IRS, is the only way to restore faith in a system that has for
too long been unworthy of our trust.
Mr. CALVERT. Mr. speaker, I rise today in support of HR 2676,
legislation to restructure and reform the Internal Revenue Service. I
believe this is the most important issue currently being debated in
households and businesses throughout the country. This is an enormous
task for Congress, but one I believe we are ready, willing and able to
tackle.
[[Page H10044]]
Ever since this issue became a national debate, I have heard from
many constituents about their experiences with the IRS. To no one's
surprise, the stories were filled with fear and anguish and anger. I
did not hear one positive story. This has only reinforced my belief
that the IRS is an agency that abuses its power and takes advantage of
honest citizens. We have allowed our current system to become
monstrous, unmanageable, and in some cases corrupt, and it is up to us
to end the IRS as we know it and scrap the current tax code.
The legislation before us today is straightforward and non-partisan.
This is not the debate about choosing between a flat tax or a national
sales tax. It is not about whether we are Republicans or Democrats.
This about representing our constituents and responding to their
requests for help. It is unconscionable that criminals in this country
are innocent until proven guilty, but taxpayers are not. HR 2676 will
change this practice and finally hold the IRS accountable to taxpayers
and force the IRS to bear the burden of proof when conducting an audit.
I am committed to improving the tax code and reforming the IRS. HR
2676 is much needed legislation that will benefit every American and I
will be voting in favor of this much needed reform. I urge my
colleagues on both sides of the aisle to do the same.
Mr. PORTER. Mr. Speaker, I am pleased that the House is considering
legislation to reform the Internal Revenue Service. It is clear that
abuse of taxpayers has occurred at the IRS and I believe that Congress
should legislate changes to ensure this abuse does not continue.
However, I also believe it is important that Congress take some
responsibility for the adversarial attitude that exists at the IRS
toward taxpayers. Two decades ago there was a very real concern in
Congress that a growing number of individuals were negligent in paying
their taxes. Based on this concern, Congress encouraged the IRS to step
up its efforts to see that taxpayers were complying with the law. While
Congress did not direct the IRS to harass or intimidate taxpayers,
there was a certain degree of pressure placed on the agency to produce
results. Unfortunately, this resulted in a culture at the IRS which
tolerates abuse of authority. I believe that this bill will effectively
correct this behavior and send a clear message that Congress does not
condone or tolerate unfair treatment of taxpayers. I encourage my
colleagues to join together and support H.R. 2676.
Mr. FAZIO of California. Mr. Speaker, I am proud to be a strong
supporter of this legislation that will bring the first comprehensive
reform of the IRS since 1952. This bill brings badly needed
accountability, continuity, and expertise to this troubled agency.
I have heard from several of my friends and neighbors that have told
me horror stories of mishandled cases and IRS agents that have acted
inappropriately. There were also the inexcusable examples of abuse that
were exposed in both the Senate and House hearings. All of these
stories act to echo the call for reform.
This bipartisan legislation gives a comprehensive solution to the
problems at the IRS by shifting the burden of proof in Tax court
hearings from the taxpayer to the IRS and includes several provisions
that will strengthen taxpayers' rights in dealing with the IRS. The
bill also creates a new system of oversight that will help bring about
lasting change throughout the organization.
The shifting of the burden of proof to the IRS will allow the
taxpayer to be innocent until proven guilty in disputes that come
before the U.S. Tax Court if the taxpayer has cooperated by providing
the IRS access to all relevant information and documents. By changing
the burden of proof this provision acts as a cost saving measure that
will encourage the IRS to settle more cases before proceeding with a
costly trial.
Other provisions of this bill that work to strengthen taxpayers
rights include: provisions which protect an innocent spouse from being
held liable for the tax liability that are caused by mistakes made by
the other spouse on tax returns; allow taxpayers to sue the government
for up to $100,000 in civil damages caused by negligent IRS employees
who have violated the law; prohibit politically motivated audits;
provide for grants to low income taxpayer clinics to help needy
Americans in their disputes with the IRS; and encourages electronic
filing of tax returns.
This bill reflects true compromise and I am proud to support it.
Mr. ADAM SMITH of Washington. Mr. Speaker, I rise today in support of
H.R. 2676, the Internal Revenue Service Restructuring and Reform Act.
As a proud cosponsor of this bill, I also want to thank the Commission
chaired by Congressman Portman and Senator Kerrey, along with Chairman
Archer and the Ranking Member of the Ways and Means Committee, Mr.
Rangel, for bringing us to where we are today.
I was disheartened to find that more than 150 people have contacted
my office this year looking for help with the IRS. Most of those
individuals are honest, hard-working people who don't mind paying their
fair share of taxes, they just want the IRS to be more helpful.
Sometimes the IRS has made mistakes and admitted wrongdoing, yet the
agency won't correct them and adjust the taxpayer's bill. Other times,
the taxpayer simply has questions and can't get a straight answer from
the IRS.
Mr. Speaker, one of my primary goals in Congress is to help restore
people's faith and trust in their government. Without public confidence
in our democracy, it is impossible to lead this nation into the next
century. This bill to reform the IRS to make it more accountable and
customer-friendly is one important step Congress must take in order to
regain some of the public's trust in government.
This bill will make the IRS more accountable by creating an outside
oversight board with real power to perform consistent, ongoing
oversight of IRS management and practices. It will make it easier for a
taxpayer to comply with tax laws because when they request information
or ask questions, they will be able to get answers. Furthermore,
Congress will finally be forced to provide the oversight it has been so
delinquent in doing.
Mr. Speaker, I urge all of my colleagues to support H.R. 2676. It is
a good bill, and a very important step toward restoring the public's
trust in our government.
Mr. STARK. Mr. Speaker, I rise in opposition to H.R. 2676 which is
before the House today.
Though it is true that certain provisions in the bill are good--the
Taxpayers Bill of Rights and the electronic filing of tax returns--
there is not enough good in this bill to warrant support for it today.
Some provisions are repetitions of current law or can be accomplished
without change in law.
However, there are some serious flaws included the bill which prevent
it from achieving the underlying goal of modernizing the IRS and
improving taxpayer service.
oversight board
The creation of the IRS board is most troublesome. The Government
should seek the expertise of private sector individuals in advisory
capacity; however, private sector individuals should not make key
decisions on critical aspects of IRS management, operations, and
taxpayers service. The IRS must be directly accountable to the
administration with strict oversight by the Congress. The board adds a
layer which reduces accountability, not enhances it.
This board is not only unwise but likely to be ineffective. A private
sector board meeting once a month and without ability to hire staff of
its own will not ensure a better managed IRS, or a more accountable
IRS.
There is a peril to privatization without clear rules on conflict of
interest and ethics but that is what we have before the House for
consideration today. I challenge my colleagues to explain how the union
representative is supposed to navigate the conflict of interest laws;
how can one person vote on key management decisions while continuing to
represent workers on a daily basis?
During committee consideration, I offered an amendment to impose
clear prohibitions on private sector board members so that they could
not represent a client against the IRS and so the one year post-
employment restrictions would apply to board members. The committee
rejected this clear amendment in a roll call vote of 14 to 23.
The language on ethics and conflicts of interest that miraculously
appears in the bill today is unclear and vague in its requirements for
private sector board members. As a criminal provision, it is grossly
inadequate.
burden of proof
The shift in the burden of proof is an idea that sounds taxpayer
friendly but will result in a far more intrusive IRS.
Former Republican Commissioner Fred Goldberg stated before Ways and
Means that ``of necessity, the IRS would be forced to resort to far
more aggressive techniques in auditing taxpayers and developing
cases.''
This change is a bad idea which will result more record keeping
requirements, more revenue agents, more audits, more tax litigation.
influencing IRS Audits
Lastly, it is intriguing that the bill imposes criminal sanctions on
the President, Vice President, and Cabinet officials for requesting
that the IRS conduct or terminate an audit of a specific taxpayer.
My Republican colleagues stated that they knew of no such abuse by
the executive branch but they failed to apply the same criminal laws to
Members of Congress. Did my Republican colleagues want to reserve the
right to ask for audits--or pull the plug on audits--with impunity?
Mr. Speaker, the flaws in this bill are too serious to merit its
enactment into law. I urge my colleagues to vote no on H.R. 2676.
Mrs. FOWLER. Mr. Speaker, I rise today in support of reforming the
IRS. We are often
[[Page H10045]]
cautioned around here against throwing babies out with bathwater. In
the case of the IRS, we are fast approaching the point of throwing out
the water, the tub and everything else.
A complicated Tax Code, coupled with an out-of-control bureaucracy
bent on punitive enforcement instead of efficient collection has
created a situation that this Congress must address. Today's
legislation is a starting point.
It is going to take time to overhaul the Tax Code. In the meantime, I
think we all agree that the abuses at the IRS must stop today. This
bill does just that. It levels the playing field between the taxpayer
and the tax collector, it makes customer service a priority not an
anomaly, and it puts in place some common sense management reforms at
the agency itself.
This is a good first step, Mr. Speaker, in our mission to create a
fairer tax system for all Americans. I urge my colleagues to support
the bill.
Mr. CHABOT. Mr. Speaker, I rise in strong support of the Internal
Revenue Service Restructuring and Reform Act.
I want to single out for special recognition, my colleague from Ohio,
Mr. Portman, for the tremendous work he has done over the last several
months on this critical issue. We in Cincinnati greatly appreciate his
tireless efforts on behalf of all American taxpayers.
The legislation before us this afternoon is taxpayer-friendly. It
makes a number of important reforms in the areas of IRS daily
operations, congressional oversight, and I think most importantly,
taxpayers' rights. The legislation recognizes the time-honored American
understanding that one is innocent until proven guilty by shifting the
responsibility of proving one's case in tax liability disputes from the
individual taxpayer to the Internal Revenue Service. This, I believe
most taxpayers would agree, is a reform long overdue.
Mr. Speaker, today's legislation is a great step in the right
direction. We are bringing the IRS under control. Next we must bring
taxes under control. While we have taken the first steps and have
legislated tax relief for working American families, that relief will
not come soon enough nor will the tax cuts be large enough. The
President and his free-spending allies in the Congress have seen to
that. But, notwithstanding the objections of our liberal friends, we
must move forward with those efforts. The American people are taxed too
much. And they will not be satisfied until we take even larger steps to
relieve them of some of that burden. The fruits of labor belong to the
working people, not to the government. And we will be failing in our
duties to those hard-working taxpayers unless we step up our efforts to
provide them with substantial tax relief.
I urge support of the legislation and I encourage my colleagues to
supplement this important tax reform measure with tax reduction
legislation in the very near future.
Mr. BALLENGER. Mr. Speaker, I rise today to express my full support
for H.R. 2676, the IRS Restructuring and Reform Act. In addition, I
wish to praise Chairman Bill Archer and our colleagues on the Ways and
Means Committee for bringing to light endless injustices against the
American taxpayers. H.R. 2676 implements the recommendations of the
year-long National Commission on Restructuring the IRS and provides
taxpayers new protections and rights to address many of the abuses
spotlighted in congressional hearings. Our colleagues Rob Portman and
Ben Cardin also deserve recognition for their sponsorship of this
commission and their tireless advocacy of its recommendations.
I believe it is important to remind our constituents that it was the
Republican-led Congress which made possible this major reform
initiative and the implementing legislation we have before us today.
H.R. 2676 proposes the first major reform of the IRS since 1952. For
three years, Republican committee heads with responsibility for the
budget and oversight of this federal agency have worked to advance this
reform agenda. After weeks of congressional hearings and outrage
expressed by the American people, the media finally began reporting on
the dark side of this Federal agency. And, after weeks of resistance to
the major recommendations of the National Commission on Restructuring
the IRS, and following the endorsement of reform efforts by the leader
of the House Democrats, President Clinton--and the defenders of the
status quo in his administration--decided they had to join this
bandwagon for reform. The good news in this debate is that a
presidential veto of these important reforms appears less likely.
Let me repeat, this legislative priority never would have been
identified or pursued had it not been for the landslide 1994
congressional elections which swept Republicans into control of the
legislative branch of our Federal Government. I am proud that we have
made protection of the American taxpayers and tax relief the hallmarks
of our leadership. As I have stated before, congressional Republicans
need time to review the legislative mistakes of the past 40 years of
Democrat control of the Congress. We have been working quietly to build
the case for major reforms of the Federal Government, and today we are
seeing the fruit of our efforts.
The recent congressional oversight hearings on IRS management
problems gave the victims of IRS harassment human faces and gained the
national spotlight for this important issue. These hearings also
generated a great deal of interest among my constituents in the 10th
Congressional District of North Carolina. In addition to a stream of
calls and letters urging my support in general for a package of IRS
management reforms, the owner of a small business came by one of my
district offices with a letter she wanted me to pass along to Chairman
Archer.
With painstaking detail, my constituent outlined what she and her
family--and employees--earlier faced at the hands of overzealous IRS
agents. The agents harassed her 77-year-old parents who are in poor
health and, on one occasion, delayed her mother's departure for a
doctor's appointment. The agents even followed her mother to a store
once and prevented her from exiting her car while they hurled questions
at her. The taxpayer's daughter suffered problems at school, resulting
in medical problems for both of them. After her employees were
contacted by phone and in person by agents at their homes, many were
scared and considered looking for other work. I agree with my
constituent that these agents appeared to be on a mission to destroy
her. Although the issue was business taxes, these Federal employees
seemed willing to destroy her personal reputation in order to collect
the taxes. Regrettably, she could identify with the financial and
emotional stresses which the witnesses had shared earlier with the
congressional panel and the viewing public.
I am certain my colleagues all can attest to similar battles which
consumed their constituents' lives and resources, and in some cases
threatened their health. While some IRS districts have been charged
with especially egregious collection actions, it seems that the taxman
has spread the pain fairly evenly to constituents in every
congressional district.
The situation of another constituent illustrates what I believe to be
the single biggest problem with agency procedures used to settle
outstanding tax liability. Taxpayers who owe back taxes to the IRS,
have reached a payment agreement and comply with the terms of the
agreement, are still subjected to ongoing penalties. Penalties in this
instance have more than doubled the original outstanding tax burden.
This is ridiculous! When an agreement is negotiated with the IRS and
signed, further penalties should be eliminated. By ending these
penalties, I also believe taxpayers would have greater incentive to
enter into payment agreements. I agree with my constituents that the
IRS should first and foremost provide ``customer service,'' be guided
by common sense regulations, and treat all taxpayers with simple human
decency.
I believe the solution to the problems with our tax system begins
with the enactment of H.R. 2676, the IRS Restructuring and Reform Act.
The IRS Restructuring and Reform Act would:
First, create an 11-member IRS Oversight Board, with 8 members who
are not Federal officers or employees. This board will have real
authority to oversee the IRS and will bring private sector expertise to
the agency.
Second, encourage the use of electronic (or paperless) filing which
should dramatically reduce the high error rate of IRS employees who
input incorrect numbers from paper 1040 forms.
Third, create a Taxpayer Bill of Rights 3, which will provide 28 new
protections for taxpayers that will enhance their rights when they
become involved in disputes with the IRS. These protections:
Shift the burden of proof from taxpayers to the IRS in court
proceedings when a taxpayer has fully cooperated during administrative
proceedings; allow recovery of up to $100,000 for negligent IRS
collection actions; allow taxpayers to recover attorneys' fees when
they prevail against the IRS; give taxpayers easier access to the tax
court's equivalent of a ``small claims court;'' expand the ability of
``innocent spouses''--often divorced women--to be relieved from
liability for additional taxes which the IRS determines are owed on a
joint return filed during the couple's marriage; and require that
taxpayers are given a reason for any audit.
Fourth, expand the oversight role by Congress of the agency.
As a taxpayer myself, I feel these changes in IRS management and
procedures are long overdue. I welcome the opportunity to speak to this
issue on behalf of my constituents. I urge my colleagues to join with
me today in voting for the IRS Restructuring and Reform Act of 1997.
Mr. PORTMAN. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Pease). Pursuant to House Resolution
[[Page H10046]]
303, the previous question is ordered on the bill, as amended.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. PORTMAN. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The vote was taken by electronic device, and there were--yeas 426,
nays 4, not voting 4, as follows:
[Roll No. 577]
YEAS--426
Abercrombie
Ackerman
Aderholt
Allen
Andrews
Archer
Armey
Bachus
Baesler
Baker
Baldacci
Ballenger
Barcia
Barr
Barrett (NE)
Barrett (WI)
Bartlett
Barton
Bass
Bateman
Becerra
Bentsen
Bereuter
Berman
Berry
Bilbray
Bilirakis
Bishop
Blagojevich
Bliley
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bonior
Bono
Borski
Boswell
Boucher
Boyd
Brady
Brown (CA)
Brown (FL)
Brown (OH)
Bryant
Bunning
Burr
Burton
Buyer
Callahan
Calvert
Camp
Campbell
Canady
Cannon
Cardin
Carson
Castle
Chabot
Chambliss
Chenoweth
Christensen
Clay
Clayton
Clement
Clyburn
Coble
Coburn
Collins
Combest
Condit
Conyers
Cook
Cooksey
Costello
Cox
Coyne
Cramer
Crane
Crapo
Cummings
Cunningham
Danner
Davis (FL)
Davis (IL)
Davis (VA)
Deal
DeFazio
DeGette
Delahunt
DeLauro
DeLay
Dellums
Deutsch
Diaz-Balart
Dickey
Dicks
Dingell
Dixon
Doggett
Dooley
Doolittle
Doyle
Dreier
Duncan
Dunn
Edwards
Ehlers
Ehrlich
Emerson
Engel
English
Ensign
Eshoo
Etheridge
Evans
Everett
Ewing
Farr
Fattah
Fawell
Fazio
Filner
Flake
Foglietta
Foley
Forbes
Ford
Fossella
Fowler
Fox
Frank (MA)
Franks (NJ)
Frelinghuysen
Frost
Furse
Gallegly
Ganske
Gejdenson
Gekas
Gephardt
Gibbons
Gilchrest
Gillmor
Gilman
Gingrich
Goode
Goodlatte
Goodling
Gordon
Goss
Graham
Granger
Green
Greenwood
Gutierrez
Gutknecht
Hall (OH)
Hall (TX)
Hamilton
Hansen
Harman
Hastert
Hastings (FL)
Hastings (WA)
Hayworth
Hefley
Hefner
Herger
Hill
Hilleary
Hilliard
Hinchey
Hinojosa
Hobson
Hoekstra
Holden
Hooley
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Inglis
Istook
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (CT)
Johnson (WI)
Johnson, E. B.
Johnson, Sam
Jones
Kanjorski
Kaptur
Kasich
Kelly
Kennedy (MA)
Kennedy (RI)
Kennelly
Kildee
Kilpatrick
Kim
Kind (WI)
King (NY)
Kingston
Kleczka
Klink
Klug
Knollenberg
Kolbe
Kucinich
LaFalce
LaHood
Lampson
Lantos
Largent
Latham
LaTourette
Lazio
Leach
Levin
Lewis (CA)
Lewis (GA)
Lewis (KY)
Linder
Lipinski
Livingston
LoBiondo
Lofgren
Lowey
Lucas
Luther
Maloney (CT)
Maloney (NY)
Manton
Manzullo
Markey
Martinez
Mascara
McCarthy (MO)
McCarthy (NY)
McCollum
McCrery
McDade
McGovern
McHale
McHugh
McInnis
McIntosh
McIntyre
McKeon
McKinney
McNulty
Meehan
Meek
Menendez
Metcalf
Mica
Millender-McDonald
Miller (CA)
Miller (FL)
Minge
Mink
Moakley
Mollohan
Moran (KS)
Moran (VA)
Morella
Murtha
Myrick
Nadler
Neal
Nethercutt
Neumann
Ney
Northup
Norwood
Nussle
Oberstar
Obey
Olver
Ortiz
Owens
Oxley
Packard
Pallone
Pappas
Parker
Pascrell
Pastor
Paul
Paxon
Payne
Pease
Pelosi
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pickett
Pitts
Pombo
Pomeroy
Porter
Portman
Poshard
Price (NC)
Pryce (OH)
Quinn
Radanovich
Rahall
Ramstad
Rangel
Redmond
Regula
Reyes
Riggs
Rivers
Rodriguez
Roemer
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Rothman
Roukema
Roybal-Allard
Royce
Rush
Ryun
Sabo
Salmon
Sanchez
Sanders
Sandlin
Sanford
Sawyer
Saxton
Scarborough
Schaefer, Dan
Schaffer, Bob
Schumer
Scott
Sensenbrenner
Serrano
Sessions
Shadegg
Shaw
Shays
Sherman
Shimkus
Shuster
Sisisky
Skaggs
Skeen
Skelton
Slaughter
Smith (MI)
Smith (NJ)
Smith (OR)
Smith (TX)
Smith, Adam
Smith, Linda
Snowbarger
Snyder
Solomon
Souder
Spence
Spratt
Stabenow
Stearns
Stenholm
Stokes
Strickland
Stump
Stupak
Sununu
Talent
Tanner
Tauscher
Tauzin
Taylor (MS)
Taylor (NC)
Thomas
Thompson
Thornberry
Thune
Thurman
Tiahrt
Tierney
Torres
Towns
Traficant
Turner
Upton
Velazquez
Vento
Visclosky
Walsh
Wamp
Waters
Watkins
Watt (NC)
Watts (OK)
Waxman
Weldon (FL)
Weldon (PA)
Weller
Wexler
Weygand
White
Whitfield
Wicker
Wise
Wolf
Woolsey
Wynn
Yates
Young (AK)
Young (FL)
NAYS--4
Hoyer
Matsui
McDermott
Stark
NOT VOTING--4
Cubin
Gonzalez
Riley
Schiff
{time} 1447
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
____________________