[Congressional Record Volume 144, Number 93 (Tuesday, July 14, 1998)]
[Senate]
[Pages S8150-S8151]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 CONFERENCE REPORT ON THE IRS REFORM AND RESTRUCTURING BILL (H.R. 2676)

 Mr. CLELAND. Mr. President, as we approached the final Senate 
vote on H.R. 2676, the IRS Reform and Restructuring bill, I was 
reminded of Dickens' ``A Tale of Two Cities''. As a conferee on this 
badly needed piece of legislation, I am led to observe that it is the 
best of bills, it is the worst of bills.
  In its germane provisions reforming the operations of the Internal 
Revenue Service it represents the best of Congress in identifying and 
enacting legislation to address the real needs of American citizens. 
But in its last minute, secretive addition of several extraneous 
matters, most notably the ISTEA technical corrections, it represents 
the Congress at its worst in circumventing public debate and scrutiny.
  In its putting the emphasis on the ``Service'' part of the IRS it 
demonstrates the best of policy-making in pursuit of the public 
interest which should be the focus of our efforts as national 
legislators. But, it also demonstrates the worst of our process in that 
in our haste to get something done rapidly, before the July 4 break, we 
are willing to cut some corners on important matters of national 
security.
  Mr. President, I support, 100 percent, the public's right to know 
when a federal agency abuses a taxpayer, and I support the public's 
demand for a remedy to that intolerable situation. I was extremely 
proud to have been chosen to serve as a member of the conference 
committee on the IRS bill. Chairman Roth, Vice Chairman Archer, Senator 
Moynihan, Congressman Rangel, and the remaining conferees from the 
Senate Finance Committee and the House Ways and Means Committee did 
yeoman's work in crafting one of the most significant acts of the 105th 
Congress--the IRS Reform and Restructuring bill.
  This is groundbreaking legislation which recreates the IRS and puts 
in place dramatic changes which will make the agency more accountable 
to the American taxpayer. This bill revives the original purpose of the 
Internal Revenue Service: to collect tax revenue while providing the 
assistance and service taxpayers deserve.
  Most importantly, taxpayers will receive overdue rights under the IRS 
Reform and Restructuring Act. Under the new law, the burden of proof 
will lie with the IRS, and taxpayers' rights in recovering civil 
damages as a result of unacceptable collection practices by the IRS 
will be expanded. An ``innocent spouse'' provision is also contained in 
this legislation. This provides that all understated tax is transferred 
to the culpable spouse. Also, for couples who are divorced or have been 
legally separated for more than 12 months, taxpayers are only liable 
for the deficiency that is attributable to their income reporting. This 
is an important provision for those who have burdened with a tax bill 
for which they are not responsible.
  This conference report also reorganizes the tax collecting agency 
around the idea of taxpayer service. Knowledgeable employees who are 
specialized in meeting the needs of specific taxpayer categories--like 
individuals, small businesses, and corporations--will be available to 
answer taxpayers' questions. And, the IRS Commissioner will have some 
hiring flexibility to offer special packages to qualified, successful 
private sector employees who will increase the professionalism and 
responsiveness of the agency.
  Because of these and other needed improvements, I endorse the IRS 
Reform and Restructuring Act, and despite some misgivings I am about to 
enunciate, I will vote for the adoption of the conference report. 
However, I did not sign the report because, at the last minute, 
extraneous material was tacked on to this landmark legislation. Out of 
the blue, and without being considered in either the House or Senate 
bill, the ISTEA technical corrections bill was included as part of the 
IRS conference report. Through this maneuver, Senator Rockefeller was 
prevented from offering his amendment on the floor of the Senate to 
correct an injustice done to disabled veterans with smoking-related 
disabilities in the original ISTEA reauthorization bill. Through this 
maneuver, the Senate and the American people were denied the 
opportunity for open debate and an up-or-down vote on an issue 
affecting America's veterans who put their life on the line for this 
nation.
  Justice Louis Brandeis once said, ``Publicity is justly commended as 
a remedy for social and industrial diseases. Sunlight is said to be the 
best of disinfectants; electric light the most efficient policeman.'' I 
could not vote to report out of committee the conference report because 
it runs counter to the open door, public process by which Congress 
should responsibly pass our laws. Sadly, all too often conference 
committees are the vehicle by which lawmakers fast-track controversial 
measures behind closed doors in order to avoid unpopular votes. There 
are no fingerprints. Issues which were not in the House-passed bill, 
not in the Senate-passed bill, too often mysteriously appear in the 
final conference report. Where is our accountability as the legislators 
of this country?
  However, though I will vote for this conference report because on 
balance it is good legislation which American taxpayers need and 
deserve, I want to make it crystal clear that this issue of appropriate 
compensation to veterans with smoking-related disabilities will NOT go 
away. When we come back into session after the July 4 break, I will 
work with Sen. Rockefeller, and others, to correct the injustice done 
to our veterans in the ISTEA reauthorization bill. Specifically, I 
believe we need to strike the veterans' disability compensation offset 
which was included in the President's budget and in the ISTEA bill as 
more of budget-saving device rather than as a clearly considered matter 
of veterans' benefit policy.
  On another front, I am also troubled by two provisions in this 
conference report which I believe, unintentionally, compromise the 
security of our nation. The first provision removes the lawful ability 
of the President, and most Cabinet members, to start or stop an audit 
or investigation of a taxpayer. Make no mistake: we all condemn the 
misuse of power to halt legitimate investigations or audits. But the 
lack of an exemption in the case of national security and law 
enforcement jeopardizes critical efforts to protect American citizens. 
It is my understanding that the Department of Justice has stated that 
the provision is unconstitutional.
  I have similar concerns about the second provision, which carves out 
an

[[Page S8151]]

exception to the Inspector General statute, so that the Secretary of 
the Treasury is prohibited from exercising his authority to stop an 
investigation by the Tax IG when national security or law enforcement 
issues are at stake. The Treasury Department and the Central 
Intelligence Agency are both opposed to this provision.
  I worked with the other conferees to try to work out these national 
security problems but ultimately those efforts fell short because of 
time constraints.
  On balance, though, I support, enthusiastically, H.R. 2676, the IRS 
Reform and Restructuring Act. It will significantly improve the 
position of American taxpayers in their dealings with the IRS. But I 
abhor the closed door process by which the ISTEA technical corrections 
bill was attached. However, this and the national security flaws are 
correctable, if not now on this legislation, then certainly before the 
Senate adjourns for the year. I pledge my efforts to achieve that 
goal.

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