[Public Papers of the Presidents of the United States: William J. Clinton (1997, Book II)]
[October 10, 1997]
[Pages 1338-1339]
[From the U.S. Government Publishing Office www.gpo.gov]


[[Page 1338]]


Remarks on Internal Revenue Service Reform
October 10, 1997

    Thank you. Thank you, Mr. Vice President, for your work. Mr. 
Secretary, thank you. Mr. Summers, Mr. Sperling, Commissioner, Mr. 
Tobias, members of the task force, employees of the IRS who are here 
today, and others who are concerned about this. And especially I thank 
the Members of Congress who are here who are supporting this endeavor 
and the others in Congress, including Senator Kerrey and Congressman 
Portman, who have shown such interest.
    Let me say, as someone who had not worked in Washington until I 
became President, I have spent most of my life talking to people who 
were on the receiving end of the IRS, for good or ill. And I took 
particular interest in the recent congressional hearings into the 
problems of IRS policy and some specific examples of taxpayer abuse. 
Like most Americans, I was genuinely angered by the stories of our 
citizens harassed and humiliated by what seemed to them to be an all-
powerful, unaccountable, and often downright tone-deaf agency.
    And since I took office, as has already been said, our 
administration has worked hard to give the American people an IRS that 
is fairer, more efficient, easier for the public to understand and to 
deal with, with the electronic filing and filing by telephone, with the 
second Taxpayer Bill of Rights, with our efforts to reduce the conflict 
between the IRS and people's religious expression, just to name three 
examples.
    It is clear that we have more to do. The IRS should be above 
reproach. Americans who work hard and pay their taxes deserve to be 
treated fairly, and no one should ever have a home, a car, a livelihood 
threatened by unaccountable actions of Government. Abuse or bullying or 
callousness by officials of our Government are unacceptable whenever and 
wherever they occur. If they occur once, it's once too many. But 
especially in connection with the IRS, it is important that they be 
rooted out.
    Let me say that it's important, too, for the American people to know 
that the IRS is made up overwhelmingly of hard-working and dedicated 
people who put in long hours in public service. The vast majority of 
them do their jobs well, and the vast majority of them were just as 
outraged by the case studies profiled in the congressional hearings as 
other Americans were.
    It is clear that in spite of our best efforts in the past, there 
remain significant problems and challenges at the IRS. That's why last 
May the Vice President and the Secretary of the Treasury initiated their 
effort to deal with problems, many of which have been a long time in the 
making but which have to be addressed, and addressed now.
    Their initiatives will take significant steps toward ending abuses, 
protecting taxpayers, and making the IRS more customer-friendly. Their 
recommendations are strong and sound and I believe represent the right 
way to reform the IRS. I'm instructing that they be put into effect just 
as soon as possible, and I'm asking Congress to pass legislation where 
necessary to make them the law of the land. And again, I thank the 
Members here who have agreed to support that endeavor.
    Let me say, I can't go over all 200 recommendations, although I hope 
that most of them will be widely reported to the American people. But 
let me give you just a few. The package of reforms says to every 
taxpayer, first, you will have a tax collection agency that is 
reinvented so that it serves its customers and taxpayers every bit as 
well as the best private companies serve their customers. As the Vice 
President said, reinvention begins with a ban on the use of dollar goals 
to evaluate IRS employee performance, goals that can give some IRS 
agents the wrong incentives, just as parking ticket quotas can give 
police officers the wrong incentives. And the IRS will trim paperwork, 
increase hours, make sure that phones are answered, expand electronic 
filing, and move toward a systematic review of all taxpayer penalties.
    Second, you have rights as a taxpayer that will be protected. I'm 
calling on Congress to pass a new--the third--taxpayer bill of rights, 
to build on the law I signed last year. This will extend the refund 
period for taxpayers with health problems that keep them from seeking 
refunds in a timely fashion, it will protect innocent spouses from 
paying for the dishonesty of

[[Page 1339]]

a spouse or former spouse, and it will take other steps to expand 
taxpayer rights.
    Third, as a taxpayer you will have recourse when you believe you've 
been treated unfairly. We're greatly strengthening the taxpayer 
advocates, who already fight effectively for taxpayers in individual 
cases, by expanding their resources and giving them greater power to 
award taxpayers immediate relief. And we are creating new, independent, 
locally based citizen advocacy panels throughout the country. These 
independent watchdogs will be able to monitor how local IRS offices 
treat taxpayers, publicize problems, and help taxpayers to get relief. A 
taxpayer who has been treated unfairly should have somewhere to go, 
someone to fight on his or her side, someone to make the agency listen. 
With a stronger taxpayer advocate and these new citizen panels, they 
will have just that.
    Fourth, we will strengthen the governance and oversight of the IRS. 
The steps I have taken today are building on the reforms already put in 
place and described by Secretary Rubin. In order to strengthen public 
accountability, I am seeking legislation to establish a new IRS board of 
trustees with the majority of members from the private sector. This 
board will review IRS performance on customer service, strategic plans, 
performance measures, and citizen advisory panel recommendations to 
ensure that taxpayers do, in fact, receive the treatment we say they 
deserve. The board would report independently, and at least annually, to 
the Secretary, the President, and the Congress. It will provide the 
private sector input we need. All of this should help to assure that 
leaders of the executive branch fulfill their responsibility to the 
American people to effectively oversee and govern the IRS. It is the 
right way to reform the agency.
    In conclusion, let me say that I believe the attention given to this 
issue and the information made public by Congress has served the public 
and the public interest well. We have an opportunity to build on the 
reforms already put in place and to use this moment to extend them 
further, so that the IRS achieves its purposes and serves the public in 
the spirit of the best institutions, both public and private.
    I don't suppose anyone will ever enjoy paying their taxes, and the 
agency that collects taxes will undoubtedly never be the most popular 
part of our Government. But it's important work, and all the more 
important that it be done properly. If we act now, we can make sure that 
the IRS genuinely earns and deserves the trust of the American people, 
and we are determined to achieve that goal.
    Thank you very much.

Note: The President spoke at 10:57 a.m. in Room 450 of the Old Executive 
Office Building. In his remarks, he referred to Deputy Secretary of the 
Treasury Lawrence H. Summers; National Economic Adviser Gene Sperling; 
Acting Commissioner of Internal Revenue Michael P. Dolan; and Robert M. 
Tobias, president, National Treasury Employees Union.