[Congressional Record Volume 143, Number 157 (Sunday, November 9, 1997)]
[Extensions of Remarks]
[Pages E2285-E2286]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               TAX REFORM

                                 ______
                                 

                           HON. JERRY WELLER

                              of illinois

                    in the house of representatives

                       Saturday, November 8, 1997

  Mr. WELLER. Mr. Speaker, earlier this week, we passed legislation to 
restructure and reform the IRS. One of the things that this bill would 
accomplish is the establishment of an Internal Revenue Service 
oversight board. If any of my colleagues are wondering why we need more 
oversight of the IRS, I would invite them to review the statement I am 
enclosing in the Congressional Record today.
  The statement, entitled ``If You Don't Have Two Motors, You Can't 
Have Your Money,'' was recently posted on the INCONGRESS Web site 
(www.incongress.com) by Cliff Harvison, president of the National Tank 
Truck Carriers. It details the plight of small business owners who have 
been denied a tax credit--established over 40 years ago by the 
Congress--for fuel used for off-highway purposes. The IRS has 
essentially disregarded this tax credit for ``administrative 
convenience.'' In other words, the IRS does not trust the taxpayer to 
tell the truth and does not want to take the trouble to verify factual 
information itself, so the IRS simply keeps the taxpayers' money.
  My distinguished colleague from Nebraska [Mr. Christensen] and I have 
introduced legislation, H.R. 1056, to remedy this problem and force the 
IRS to comply with the law Congress passed over 40 years ago. However, 
we have been told that the IRS opposes it. I would hope that we would, 
perhaps for administrative convenience ignore the IRS and pass it 
anyway.
  Mr. Speaker, this is perhaps one of the most blatant examples of IRS 
arrogance that I have seen since becoming a Member of Congress. It is 
stories like this that so clearly justify the need for more oversight 
of the IRS.
  At this point I would like to insert into the Record the document 
entitled ``If You Don't Have Two Motors, You Can't Have Your Money,'' 
which was posted on the INCONGRESS Web site by Cliff Harvison, 
president of the National Tank Truck Carriers. I commend it to all of 
my colleagues and invite them to join with me in cosponsoring H.R. 1056 
to restore the off-highway tax credit and supporting H.R. 2676, the 
Internal Revenue Service Restructuring and Reform Act of 1997.

   If You Don't Have Two Motors, You Can't Have Your Money by Cliff 
           Harvison, President, National Tank Truck Carriers

       ``If you don't have two motors on your truck, you can't 
     have your money.'' That's what the IRS has told the tank 
     truck carriers, the waste haulers, the cement mixers and 
     others. The Congress has been hearing a lot of ``horror 
     stories'' lately about taxpayers being wronged and ripped off 
     by the IRS. Many of these abuses are dramatic, but few have 
     been going on as long as the financial harm the IRS has been 
     inflicting upon members of the National Tank Truck Carriers 
     (NTTC) and many other small businesses. The IRS has been 
     keeping money which legally belongs to these taxpayers for 
     years. The IRS' reason for doing so? ``Administrative 
     convenience.''


    The Money: It Belongs to Our Members, but the IRS is Keeping It

       For over thirty years the IRS has refused to allow federal 
     fuel tax credits to many of our members despite the fact that 
     the law clearly states they are entitled to this money. These 
     members pay federal highway taxes on all fuel purchased at 
     the pump, even though some of the fuel is used for off 
     highway purposes and should therefore, pursuant to the IRS 
     Code, not be subject to these taxes.
       Congress decided in 1951 to provide a tax credit for off-
     highway business use to taxpayers that pay fuel taxes. 
     However, the IRS apparently decided long ago that it did not 
     like the law, so it simply found a way to ignore it and keep 
     the money anyway.
       Generally speaking, off-highway use is the operation by a 
     vehicle of some function other than driving down the road. A 
     tank truck, for instance, consumes fuel for two purposes: 
     first to power the truck as it drives down the street, and 
     second, to operate the pump that loads and unloads its tanks. 
     Operating the pump is precisely the kind of activity the 
     Congress had in mind when it created the tax credit for 
     ``off-highway business use.'' The tank truck operator is 
     entitled by law to obtain a tax credit for any fuel consumed 
     for this purpose.


    The Policy: You Can't Get Your Money Unless You Have Two Motors

       In order to receive the credit the taxpayer is supposed to 
     submit to the IRS an accounting of fuel usage by the vehicle 
     which accurately reflects the amount of fuel used for non-
     highway purposes. However, the IRS decided that it could not 
     trust the taxpayer. So, it decided to simply deny the credit 
     by writing a regulation providing that, in order to qualify 
     for the credit, you must have two separate motors on your 
     truck--one to drive it down the road, the other to power your 
     pump. In other words, the IRS said to the taxpayer, ``We 
     don't trust you; we don't care how you conduct your business; 
     we don't care what type of efficient equipment you need or 
     use. If you want to get your money back from us, your truck 
     must have two motors.''


The Rationale: The IRS' ``Administrative Convenience is More Important 
                      Than the Rights of Taxpayers

       Despite the absurdity of the ``you can't get your money 
     unless you have two motors'' policy, when this regulation was 
     challenged in the Tax Court, the court upheld the IRS, 
     acknowledging that this rule existed for the IRS' 
     ``administrative convenience.'' In other words, the court 
     decided that the administrative convenience of the IRS was 
     more important than the taxpayers' rights under the law. The 
     Tax Court ruled that the IRS could keep money that the 
     Congress said belonged to the taxpayer--or, alternatively, 
     the IRS could force the taxpayer to go out and buy a truck 
     with an extra motor if it wanted to get the tax credit to 
     which the Congress said it was entitled.
                               __________
                               


                 They Don't Make 'Em Like That Anymore

       Adding to the absurdity of this policy the same decision 
     which upholds the IRS' ``two motors or you can't get your 
     money'' policy, which incidentally was written in 1995, 
     contains the following information about the availability of 
     trucks with extra motors:
       ``The parties have stipulated that since the early 1970's, 
     manufacturers of vehicles have stopped producing standard 
     vehicles that contain a separate motor to power the vehicles' 
     separate equipment.''


            If You Have a Computer You Don't Need Two Motors

       Aside from the fact that it is almost impossible to find 
     vehicles for sale that have two motors, the availability and 
     widespread use of computers which keep accurate and 
     verifiable track of fuel usage today totally undermines the 
     IRS' original rationale of the two-motor rule. Even if there 
     was arguably some rationality behind the policy when it was 
     first implemented back in the fifties, that so-called logic 
     is no longer valid in today's world. The IRS is well aware 
     that computers can more accurately keep track of fuel usage 
     than can two separate motors. We have provided them with this 
     information.


                If States Can Do It, Why Can't the Feds?

       Various states have found equitable ways that are not 
     ``administratively inconvenient'' to either rebate or provide 
     credits for

[[Page E2286]]

     state fuel taxes to the same industries that are being denied 
     the federal fuel credit by the IRS. If they can do it why 
     can't the IRS?


 ``Don't Ask, Don't Tell'': We Can't Right the Wrong Because We Don't 
                     Know How Much It Will ``Cost''

       Our members are aware that Congress must know how much 
     something costs before it writes a law--and we are very 
     supportive of this approach to public policy. Nevertheless, 
     we do not believe that the federal government should have to 
     figure out how much it will cost to stop violating a law 
     before it decides to stop violating it.
       The IRS attitude is: we don't want to discontinue our 
     policy of keeping your money even though it doesn't belong to 
     us, because we're not sure we can afford to stop keeping it. 
     This is an absolute outrage. Furthermore, we have been 
     discouraging from even finding out how much the IRS is 
     illegally retaining every year from our members. We should at 
     least be able to get an accounting of how much of the 
     taxpayers' money the IRS is keeping each year. One thing we 
     know for certain--our individual members and the small 
     business owners throughout the country need this money, and 
     more importantly, they are legally entitled to it. We 
     therefore ask the Congress to immediately request an 
     accounting of the IRS with regard to this money.


 The Solution: If the irs refuses to implement regulations reflecting 
the will of congress, then pass legislation to make the irs comply with 
                                the law

       The most sensible way to resolve this would be for the IRS 
     to acknowledge the existence of modern technology and revise 
     its regulations to accommodate tank truck operators and 
     others who can document off-highway usage in an accurate and 
     verifiable way. Unfortunately, the IRS has consistently 
     refused to accommodate the business realities facing 
     taxpayers.
       Therefore the only way to make the IRS comply with the 
     federal law and stop them from keeping money that rightfully 
     belongs to our members and many other hardworking owners and 
     operators of small businesses throughout the country is to 
     pass a law that clarifies for the IRS that a credit is a 
     credit. We call upon Congress to do so. H.R. 1056, introduced 
     by Representative Jerry Weller (R-IL) and Jon Christensen (R-
     NE) on March 13, 1997 would accomplish this. We call upon the 
     Congress to disregard the IRS' objections and pass this 
     legislation, and we invite all Members of Congress who to 
     join us in this effort by co-sponsoring H.R. 1056.
       We ask the Congress to acknowledge that it should not 
     ``cost'' the Treasury money to comply with a law that 
     Congress has already written and disregard the IRS' refusal 
     to comply with the law on the grounds that it would ``cost'' 
     money or that it would be ``administratively inconvenient.'' 
     If our members, or any other taxpayers, used either of these 
     reasons for not complying with federal law what do you think 
     would happen to them?

     

                          ____________________