[Congressional Record Volume 144, Number 56 (Thursday, May 7, 1998)]
[Senate]
[Pages S4486-S4487]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     INTERNAL REVENUE SERVICE RESTRUCTURING AND REFORM ACT OF 1998

  The Senate continued with the consideration of the bill.
  Mr. GRAMM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Texas.


                           Amendment No. 2376

(Purpose: To provide for the termination of employment of IRS employees 
 for willful failure to file income tax return or threatening an audit 
                       for retaliatory purposes)

  Mr. GRAMM. Mr. President, I have one final amendment. I am a little 
bit hesitant to consume further time so I shall be brief.
  I remind my colleagues, we held hearings in the Finance Committee 
after we wrote the initial bill, and issues arose in those hearings 
that we want to address in this amendment. I understand that it has 
been approved by both sides of the aisle.
  Basically, we have in the bill a list of offenses for which an 
employee of the Internal Revenue Service may be terminated. In light of 
concerns that have arisen since we had the bill before the committee, I 
want to add two offenses to the list.
  One has to do with testimony we heard where members of the Internal 
Revenue Service were said to be threatening to audit people for 
personal gain. We heard an assertion that a police officer had stopped 
an IRS agent and was going to write him a ticket, and the IRS agent 
allegedly had told the officer that if he wrote the ticket, he was 
going to get audited.
  The second provision has to do with a knowing and willful failure of 
an IRS agent to file a tax return or pay taxes or declare income. Both 
of these fit, I think, perfectly into the list of very strong offenses 
that we have in the bill.
  I send the amendment to the desk.
  The PRESIDING OFFICER. Without objection, the pending amendment will 
be set aside. The clerk will report the amendment of the Senator from 
Texas.
  The legislative clerk read as follows:

       The Senator from Texas [Mr. Gramm] proposes an amendment 
     numbered 2376.
  Mr. GRAMM. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       On page 253, line 13, strike ``and''.
       On page 253, line 17, strike the end period and insert a 
     comma.
       On page 253, between lines 17 and 18, insert:
       (8) willful failure to file any return of tax required 
     under the Internal Revenue Code of 1986 on or before the date 
     prescribed therefor (including any extensions), unless such 
     failure is due to reasonable cause and not to willful 
     neglect,
       (9) willful understatement of Federal tax liability, unless 
     such understatement is due to reasonable cause and not to 
     willful neglect, and
       (10) threatening to audit a taxpayer for the purpose of 
     extracting personal gain or benefit.

  Mr. ROTH addressed the Chair.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. Mr. President, again, this amendment addresses a serious 
problem that came out during the hearings held by the Finance Committee 
last week.
  It is an important change in the law. And I compliment the Senator 
for propounding it. At the appropriate moment I will urge its adoption.
  Mr. KERREY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. KERREY. Mr. President, the National Restructuring Commission 
included this provision in our bill. It is in the House bill, or at 
least provisions in it that dictate that an employee who does a number 
of things would be automatically terminated.
  What the Senator from Texas has done is identified some additional 
things that ought to be on the list and once again has carefully drawn 
it--I believe the language is ``willful'' and--what was the other word, 
I ask the Senator? ``Willful'' and ``intentionally.''
  This would not be a situation where an individual accidentally 
underpays taxes or misses a deadline or something like that. This is a 
much higher standard, a much more difficult standard. And I think it is 
a quite reasonable provision to add to the list of things that would 
force and require automatic termination.
  In general, this legislation is attempting to change the culture by 
saying here are some things that, if you do it, there are going to be 
severe penalties. This is obviously a severe penalty. Punitive damages 
for damages, we have an expanded right for legal fees.
  What we are trying to do is change the culture so that there is a new 
seriousness given to actions taken by the IRS. And all of us understand 
the penalty needs to be sufficient to meet the offense. I think the 
amendment of the distinguished Senator from Texas is a reasonable one 
and I urge its adoption.
  Mr. GRAMM. I thank you.
  The PRESIDING OFFICER. Is there further debate on the amendment?
  The question is on agreeing to the amendment No. 2376.
  The amendment (No. 2376) was agreed to.
  Mr. GRAMM. I move to reconsider the vote.
  Mr. KERREY. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. ROTH addressed the Chair.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. Mr. President, I have two amendments that have already been 
discussed by the senior Senator from Idaho, Senator Craig. Both 
amendments have been cleared on both sides of the aisle.


                           Amendment No. 2377

 (Purpose: To require disclosure to taxpayers concerning disclosure of 
  their income tax return information to parties outside the Internal 
                            Revenue Service)

  Mr. ROTH. The first amendment I will offer would require disclosure 
to taxpayers concerning disclosure of their income-tax return 
information to parties outside the Internal Revenue Service.
  The PRESIDING OFFICER. Is the amendment at the desk?
  Mr. ROTH. I send the amendment to the desk.
  The PRESIDING OFFICER. The clerk will report the amendment. And by 
unanimous consent, the pending amendment is set aside.
  The legislative clerk read as follows:

       The Senator from Delaware [Mr. Roth] for Mr. Craig, 
     proposes an amendment numbered 2377.

  Mr. ROTH. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.

[[Page S4487]]

  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:
       Insert in the appropriate place in the bill the following:

     SEC.   . DISCLOSURE TO TAXPAYERS.

       Section 6103(d) of the Internal Revenue Code of 1986 is 
     amended by adding at the end thereof a new paragraph to read 
     as follows:
       ``(6) Disclosure to taxpayers.--The Secretary shall ensure 
     that any instructions booklet accompanying a general tax 
     return form (including forms 1040, 1040A, 1040EZ, and any 
     similar or successor forms) shall include, in clear language, 
     in conspicuous print, and in a conspicuous place near the 
     front of the booklet, a concise description of the conditions 
     under which return information may be disclosed to any party 
     outside the Internal Revenue Service, including disclosure to 
     any State or agency, body, or commission (or legal 
     representative) thereof.''.

  Mr. ROTH. As I indicated earlier, this amendment has been cleared on 
both sides of the aisle.
  Mr. KERREY. Mr. President, it is a good amendment, and I urge its 
adoption.
  The PRESIDING OFFICER. Is there further debate on the amendment? If 
not, without objection, the amendment is adopted.
  The amendment (No. 2377) was agreed to.


                           Amendment No. 2378

    (Purpose: To limit the disclosure and use of federal tax return 
  information to the States to purposes necessary to administer State 
                            income tax laws)

  Mr. ROTH. Mr. President, the second amendment of Senator Craig would 
limit the disclosure and use of Federal tax return information to the 
States to purposes necessary to administer State income-tax laws.
  I send the amendment to the desk.
  The PRESIDING OFFICER. The clerk will report the amendment. By 
unanimous consent, the pending amendment is set aside.
  The legislative clerk read as follows:

       The Senator from Delaware [Mr. Roth] for Mr. Craig, 
     proposes amendment numbered 2378.

  Mr. ROTH. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:
       On page 394, before line 16, add a new item (6) to read as 
     follows:
       ``(6) the impact on taxpayer privacy of the sharing of 
     income tax return information for purposes of enforcement of 
     state and local tax laws other than income tax laws, and 
     including the impact on the taxpayer privacy intended to be 
     protected at the federal, state, and local levels under 
     Public Law 105-35, the Taxpayer Browsing Protection Act of 
     1997.''

  Mr. ROTH. I further note that this amendment has been cleared on both 
sides of the aisle. It is a good amendment. I urge its adoption.
  Mr. KERREY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. KERREY. Mr. President, this is a good amendment, and I also urge 
its adoption.
  The PRESIDING OFFICER. Is there further debate on the amendment? If 
not, without objection, the amendment is agreed to.
  The amendment (No. 2378) was agreed to.
  Mr. KERREY. I move to reconsider the vote.
  Mr. ROTH. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                Amendments Nos. 2365 and 2366, Withdrawn

  Mr. ROTH. Mr. President, I ask unanimous consent to withdraw 
amendment No. 2365 and amendment No. 2366.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendments (Nos. 2365 and 2366) were withdrawn.
  Mr. LEAHY. Mr. President, I ask unanimous consent to be able to 
proceed for up to 4 minutes as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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