[Congressional Record Volume 144, Number 54 (Tuesday, May 5, 1998)]
[Senate]
[Pages S4223-S4225]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INTERNAL REVENUE SERVICE REFORM
Mr. LOTT. Mr. President, today we begin our second day of floor
debate on legislation to rein in the Internal Revenue Service. As
hearings demonstrated last week, once again, the IRS is an agency with
real problems. I should note, again, it has a job to do. It is not an
easy job. We acknowledge that. We also have to give credit to those IRS
employees who work hard, do an honest job, and don't target people for
unnecessary audits or try to set up laundering schemes, things of that
nature. A lot of IRS employees have put their own jobs on the line and
have endured a lot of harassment because they have said there are
problems here.
We heard from a number of them last week who came in. In fact, one
lady came in, she is chief of a division, and complained about the
slowness or inaction by the Deputy Commissioner of IRS where there has
been misconduct within the IRS. It seems when complaints or problems
develop and recommendations are made, they are put in a desk somewhere,
or on a desk, and they seem to just disappear. It was an IRS agent who
came and said the Deputy Commissioner is not following up on things.
We had a panel of IRS agents who came in and talked about the
problems they had found. IRS agents are the ones who pointed out there
had been targeted audits of people like Senator Howard Baker. It was
three IRS agents who were, in effect, punished or moved because they
said there is a rogue agent here out of control doing something that is
wrong and illegal. So a lot of IRS workers are the ones who have
brought these matters to our attention.
The most compelling testimony, though, last week, for me, involved
small businessmen who had been raided unfairly. Some of them still,
obviously, are emotionally distraught over what
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they had to endure. One of them was a man by the name of John
Colaprete. Mr. Colaprete is a small businessman, a restaurant owner, in
Virginia Beach, VA. He told the Senate Finance Committee how the IRS
almost destroyed his business. This morning you will get a chance to
hear his story in his own words. I am going to read his testimony
because it was so compelling. I fear a lot of Senators did not hear his
testimony, and a lot of the American people didn't hear it, but this is
just one of the three. I know there are many others in the country.
This is the type of thing that is being done by the Criminal
Investigation Unit at IRS that has to be reined in.
My name is John Colaprete. I'm from Virginia Beach, and I'm
in the restaurant business.
I'm also a husband, a father, and veteran, having served my
country proudly as a U.S. Marine Corps captain from 1965 to
1969.
I have never been in any sort of trouble with the law, and
I believe that every American has an obligation to pay their
fair share of income taxes.
I have never failed to meet that obligation.
I have always considered myself both patriotic and a law-
abiding citizen.
I will always be a law-abiding citizen. However, I feel I
have literally been punished for upholding the laws of the
nation I swore an allegiance to honor and defend.
Four years ago, I employed a bookkeeper in my restaurant
who eventually embezzled approximately $40,000.00 from the
business. She went to prison for her crimes, but not before
turning my life, and the lives of countless others, upside
down. With the full cooperation of the Internal Revenue
Service, this woman, a multiple felon, who already had an
outstanding warrant for her arrest, managed not once but
twice, to victimize me, my family, partners, employees,
patrons and others in the business community who depended
upon me and my business.
This dance with the Devil began in March of 1994, when my
partner and I became aware that we were being swindled by our
bookkeeper. When we discovered substantial shortages in our
accounts, we confronted her, and she admitted to stealing
from our business. She told us she would make restitution.
Unfortunately, rather than make restitution, she sought
shelter with the IRS and told them a fantastic tale of money
laundering, gun running and drug dealing by my partner and
me.
Little did I know that the IRS would spend less than 48
hours investigating my bookkeeper's allegations before
conducting raids on my business, my home, and the home of my
manager.
Little did I know that the government I had so proudly
served would accept these allegations to be true, despite the
alarming lack of substantiation, probable cause, or proof of
any sort whatsoever.
Little did I know that the IRS, when faced with the
outrageous claim that I had thousands of pounds of cocaine
stored like cordwood in my office, would subscribe to a
policy of Guilty Until Proven Innocent. Unfortunately, in the
case of the IRS, I now know this is standard operating
procedure when dealing with law-abiding taxpayers.
This wasn't a matter of an honest mistake; in fact, a
recently retired FBI agent divulged in a deposition taken for
the case that I have pending against the IRS, that he had
advised all involved to be skeptical about the claims of my
accuser. The FBI specifically declined to become involved,
and in the words of one of its agents, the whole story
sounded like a ``Grade B'' movie.
On the morning that both my home and business were raided--
raids executed solely on the word of my ex-bookkeeper--I was
in a church for the occasion of my son's first holy
communion. Armed agents, accompanied by drug-sniffing dogs,
stormed my restaurant during breakfast, ordered patrons out
of the restaurant and interrogated my employees. The IRS
impounded my records, my cash registers, and my computers.
Since the raids, we managed to get up and running, despite
what can easily be perceived as our own government's best
attempts to put us out of business.
Today, I still wonder how such a thing can happen, but I
know it does. And I'd like you to know that for every
taxpayer like me--those who have survived armed assaults on
our businesses and our homes--there are perhaps several
thousands of taxpayers who, in fear, lick their wounds, tally
their losses, and consider themselves lucky that the IRS has
finally left them alone, their innocence notwithstanding. I
have nothing to hide, and I will never consider myself lucky
when I ponder the events of the last four years. As for the
taxpayers who have suffered similar injustices at the hands
of the IRS, I hear from these people every week. They seek me
out and relate horror stories that, at one time, would have
evoked from me nothing more than simple skepticism. I used to
believe that such things could only happen in a Communist
bloc country, or a police state. I don't believe that
anymore.
When the raid occurred at my home, the front foor was torn
from the hinges. My dogs were impounded, along with my safe
and 12 years of my personal income tax returns and supporting
documents. When that safe was finally returned, an heirloom
watch that I had received as a gift from my father was
missing. In the aftermath of the raid, I returned to find my
home in shambles. It was as if I had been burglarized, both
in appearance and in the sense of having been grossly
violated.
While my restaurant and my home were being raided by armed
agents of the Internal Revenue Service, a raid was also being
conducted on the home of my manager.
In that raid, my manager was pulled at gunpoint from the
shower and forcibly restrained while he attempted to call an
attorney. His teenage son was forced to the floor at
gunpoint. His daughter, 14 years old at the time, had several
friends over for a slumber party the night before. These
young girls had to get dressed under the watchful eyes of
male agents, despite the presence of female agents. The IRS
agents stood in the doorway to the bedroom, refusing these
young girls even a semblance of privacy.
We were never charged with any crimes. After scrutinizing
our records for four months, the IRS returned most of them. A
rental truck pulled up in front of my business one day, and
the items that were returned were basically dumped in a pile
on the street for us to sort through. I never received an
apology.
Following the raids, I could get no answers as to why all
of this occurred. I was met with ``No comment, Mr.
Colaprete,'' at every turn. Freedom of information requests
were ignored, ostensibly due to a backlog of such requests,
and despite legally mandated time limits on such requests.
Two newspapers in Virginia Beach made repeated requests under
the Freedom of Information Act, only to have the Justice
Department thumb its nose at those requests. When an
investigative journalist began to get to the bottom of
things, he was also subjected to the harassment of the IRS.
He had an opportunity to interview Special Agent Carol
Willman from the IRS office in Norfolk, Virginia. During that
interview, Ms. Willman interrupted the reporter's inquiries
with a demand for his Social Security number. Within the
year, he was notified that the IRS wanted to audit his
return. When a local publication reported this, the audit was
abruptly canceled. An IRS agent stated at the time that the
agency does not retaliate against citizens through the use of
audits, but the facts would seem to indicate otherwise.
The ex-bookkeeper, meanwhile, was kept in protective
custody by the IRS in a motel up until the time of the raids.
It is almost unimaginable that there could be such a level of
incompetence at the IRS that they would not only take the
word of this woman and begin any sort of investigation, but
they would shield her from the authorities who were trying to
arrest her. The woman who the IRS was protecting and on whom
they had relied had already been convicted numerous times. In
fact, the outstanding criminal charge pending against her at
the time she approached the IRS was for a crime involving
lying and stealing. Ironically, just a week before this woman
approached the IRS, I had specifically gone to the police and
filed a complaint against her, alleging that she had lied,
stolen and embezzled from me. In the face of all of that, how
could anyone, let alone a supposedly trained, professional
inspector with the IRS, accept at face value what this woman
was saying? Based on her word, she--Carol Willman--not only
commenced an investigation, but completely shut down a
business and turned the lives of innocent people upside down
less than 48 hours after first being introduced to the woman.
Is there such a competitive atmosphere within the IRS to add
another feather in their cap that they would ignore not only
basic investigative techniques, but the obvious flaws in this
woman's character and simply accept her at face value? It is
frightening that such a woman could have conned the IRS into
believing that her employer, despite all appearances to the
contrary, was a high-level gangster and then shield her from
the law in the belief that she would lead them to a bigger
fish--like me.
To compound the Keystone Cop mistakes that had already been
made, the IRS then allowed her to leave the jurisdiction of
Virginia to go to North Carolina where she was only later
sent to jail for embezzling from three other employers in
that state. On the surface, it might appear that she acted
alone, but that just isn't so. The IRS was her partner in
crime--first, acting in concert to destroy my life, and then
allowing her to flee the state and victimize others.
I looked for answers and was rebuffed at every turn. I
suffered a deep depression that lasted a year. I was
immobilized and could not get out of bed some days. My
neighbors shunned me. My wife, who is an artist, has not been
able to pick up a paint brush in four years. My children were
taunted at school and told that their father was a gangster
and a drug dealer--a Mafioso. I raised my children with a
zero tolerance for dishonesty, and now they must hear
allegations that I am a tax cheat. I am here to tell you that
I am none of those things.
Relatively speaking, the trauma that has befallen me is
mild, compared to what has happened to my manager. He has
suffered severe depression, sought counseling from his
pastor, literally been shunned by friends and acquaintances,
and has yet to get his life back in order. He has been ruined
financially and emotionally, with little or no hope of ever
getting his life back to where it was prior to the raids.
I'm also here to tell you that we cannot treat our citizens
this way--not in America. I have been repeatedly victimized
over the
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past four years, primarily by a government tax agency that is
funded with my tax dollars. If Americans have a perception of
the IRS as the Boogey Man, it is because the IRS itself has
promoted that perception through policies that are
fundamentally unconstitutional and illegal.
This is not a partisan issue--it is a people issue and a
freedom issue.
I have a lawsuit pending against the IRS, and I will not
rest until I have had my day in court. The IRS response to
the lawsuit has been to cast doubt on my character by
insinuating that they did, in fact, find evidence of
wrongdoing, but they chose not to prosecute if. If I was
guilty of anything, why would they ``choose'' not to
prosecute? While any ``allegations'' will eventually be
shown in court to be what they are, i.e., a smoke screen,
until I can get into court to prove my case, these
``allegations'' linger in the community where I live and
work and continue to compound my frustration.
The system does not work for the American taxpayer. The
total sense of violation that we have experienced has had a
devastating effect on us all. In the wake of all of this, I
find there is no system in place to defend me, or others like
me. I'd like to believe that someone takes responsibility for
what has happened--for what continues to happen every day in
this country. If the example we are to set for our citizens
is one of no accountability and no remorse, then our form of
government--the oldest surviving democracy on the planet--
cannot survive much longer.
A day doesn't go by that I don't wonder what harassment
will occur next. I would like to know why this dark entity
known as the IRS has come into my life and refused to leave.
So who protects me in the system? Who cares about my
constitutional rights? Not the courts. Not the IRS. I am
hoping that the buck stops here--with you, Senator Roth and
this Committee.
I leave you with just three questions, Senators:
(1) Why did this happen?
(2) What will you do to see that it never happens again to
innocent taxpaying Americans? We cannot employ inexperienced
and immature people to play God with the lives of our
taxpayers--IRS agents who decide that it's a beautiful day to
go out and destroy someone's life; and finally,
(3) Once this ordeal has ended and I have obtained a
verdict in a court of law and a judgment against the IRS,
what will you do to assure me that the IRS pays the judgment,
rather than continue to beat me into submission through
endless appeals and an outright refusal to pay the judgment
that I obtain?
In this great democracy, we have created this entity to
collect taxes which we all agree must exist. However, we have
empowered this agency to be subject to no one, to no laws, to
no checks and balances, and all of us--including each and
every one of you--are afraid of them! Why should we fear the
very people we employ?
When these hearings began last September, I was told that
Senator Roth would conduct these hearings because he has no
fear. After my ordeal, I have no fear any longer, but when
Americans receive that letter with the logo of the IRS in the
upper left hand corner, their pulse rate, heart beat and
blood pressure rise. There is a genuine fear. This fear must
stop.
Mr. President, I want to open today's debate by sending messages to
two groups of people.
To Mr. Colaprete, to his family, to his manager, to the employees of
his restaurant, and to the residents of Virginia Beach whose lives were
harmed by the IRS, I want to say that I'm sorry. Since the IRS
apparently thinks they do not need to apologize to you, I will. On
behalf of myself and the United States Senate, I apologize for the harm
that your government has done to you.
I also want to say to Mr. Colaprete that it is our intent that this
never happens again. The legislation we have before us is specifically
designed to stop the kind of abuse you suffered, and we will continue
to maintain a vigilant watch over this agency.
To the agents at the IRS, who have been out of control, and to the
management who is protecting those agents, I want to say watch out. We
are on to you, and we will not let you do this sort of thing to the
American people.
That is our goal here, to provide some protections, some oversight
that is free and separate from the IRS, a private citizen entity to
look into their procedures and their conduct. It also is to give some
relief to the taxpayers who now find quite often that the penalties and
the interest far surpass the basic amount that was owed.
This action is overdue. I want us to have a strong bill because I
don't want us to come back 2 years from now and find out what we did,
in fact, did not change the culture at IRS. I do believe that the new
Commissioner, Mr. Rossotti, is trying hard to turn things around, but
it is not all the agency's fault. The laws that we have on the books
have been inadequate. In fact, I am not sure we can fix these laws. We
may have to just scrap what we have and start over again.
For now, until that is done, we must build in protections against
this type of abuse of ordinary citizens and taxpayers.
I yield the floor.
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