[Congressional Record (Bound Edition), Volume 145 (1999), Part 2]
[Extensions of Remarks]
[Page 2352]
[From the U.S. Government Publishing Office, www.gpo.gov]




      INTRODUCTION OF THE FAIRNESS IN IRS DEBT PAYMENT ACT OF 1999

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                          HON. EDOLPHUS TOWNS

                              of new york

                    in the house of representatives

                      Thursday, February 11, 1999

  Mr. TOWNS. Mr. Speaker, we have all heard Internal Revenue Service 
horror stories. Recently, the Washington Post began a series on 
harrowing encounters between the IRS and the average citizen. You do 
not have to be a Member of Congress to know that the average American 
deeply fears an IRS audit. This fear is not because of widespread tax 
fraud. The average American understands that tax revenue is the 
gasoline in the engine of our society. They do not balk from paying 
their fair share of taxes, but they fear that innocent mistakes or 
misunderstandings of complex laws will result in a large bill from the 
government. They know that it is not unusual for the penalty and 
interest payments to be two to three times higher than the actual tax 
owed. They know that it is not unusual for the agency to compound 
interest in such a way that the actual interest rate paid by the 
consumer is 40 percent. And they know that once they start paying they 
may never stop.
  Current IRS reforms have centered on administrative structure instead 
of agency practices. Taxpayers are more concerned about IRS tax 
assessment practices than its organizational structure. Inequitable or 
coercive collection practices not only diminish respect for the 
government but cause hardship in individual lives. This legislation 
will bring much needed fairness to IRS collection practices and prevent 
the unjustifiable financial ruin of so many working American families. 
After discussing this measure with several of my colleagues, I am truly 
optimistic about the opportunity for expediting this legislation 
through the legislative process.
  Mr. Speaker, today I am pleased to introduce the Fairness in IRS Debt 
Payment Act of 1999, which will require the Internal Revenue Service to 
compound interest annually (instead of daily); apply payments equally, 
and cap penalty accumulation. Additionally, the bill will prohibit the 
IRS from re-auditing an account or unilaterally suspending a payment 
plan. Finally, the bill will require the agency to issue written 
guidelines on penalty abatement and provide the taxpayer with a written 
explanation for refusal of a penalty abatement request.

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