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Senate Panel Hears Stories Of Alleged IRS Abuses


WASHINGTON (AllPolitics, April 28) -- The Internal Revenue Service was once again under fire on Capitol Hill Tuesday, as a Senate committee launched another round of hearings, this time focusing on alleged abuses of power inside the tax agency.

In the first of four days of testimony from taxpayers and agents, the Senate Finance Committee heard instances of the IRS stepping over the line, including stories of retaliation against whistleblowers and raids on taxpayers' homes that may not have been justified.

Some of the harshest criticism was aimed at the agency's criminal investigation division, as witnesses complained that the investigators used excessive techniques and were out of control.

Tax attorney Robert Davis characterized the investigative agents as "cowboy agents" who are "undisciplined, who are inadequately controlled, and who think that the end of putting away the bad guys justifies the means, that is these intrusive, intimidating and oppressive investigations."


Cody Mayo, an assistant district attorney in Caddo Parish, La., told of one client who had a nervous breakdown as a result of an IRS audit, and another who committed suicide four days before his tax case was to go to trial.

Senators also heard of problems within the IRS workforce, as a senior IRS executive testified that whistleblowers at the agency can lose their jobs, while senior level managers often go unpunished.

Yvonne DesJardins, chief of the IRS employee and labor relations section who appeared as a surprise witness on the hearings' opening day, said, "The whistleblowers are ostracized and careers destroyed and those senior officials who engaged in the misconduct which was reported and substantiated are not only protected from receiving any disciplinary actions, but are often times rewarded during the same year the misconduct occurs. Again, I speak from personal experience."


DesJardins also complained that the agency had no "consistent treatment of individuals regarding discipline."

Treasury Department employee Harry Patsalides, who has been investigating the tax agency, said he had found similar problems.

"We are also concerned that if an employee files a grievance, complaint or lawsuit against an IRS manager and the employee wins the settlement usually no disciplinary action is taken against the manager for allegedly violating the rights of the employee," he said.

"This lack of disciplinary action may send a message to managers that they are free to harass an employee without being personally accountable," Patsalides said.

Roth has said that there are too many stories of IRS abuses to let them pass. "We will focus on a number of serious issues which weigh heavily on the integrity of the IRS," the chairman said in his opening statement.


Once again calling taxpayers and agents to the table, the Roth panel will focus on the criminal division's investigative techniques, including raids; allegations of racism and discrimination; lax oversight of the work force; and disparity of employee treatment.

A second panel of witnesses will testify this afternoon on the IRS' investigative procedures.

Last fall's IRS oversight hearings by the Roth committee proved both politically and financially profitable for Republicans, attracting attention and campaign contributions. And legislation to reform the tax collection agency and expand taxpayers' rights is expected to reach the Senate floor next week.

But on the eve of round two, the Treasury Department released a report that said many, though not all, of the charges by an IRS agent in round one were unfounded or unsubstantiated.


Republicans found the timing of the report's release suspicious. "I think that it may have been an effort to intimidate witnesses that we were planning on having this week," said Senate Majority Leader Trent Lott (R-Miss.).

Democrats say it's just proof Republicans are grandstanding. Sen. Tom Daschle (D-S.D.) said Treasury's findings, and the exclusion of Democrats from the planning of the hearings, make it "clear that some Republicans are more interested in sensationalism then they are in the fact."

"I think [the Treasury Department report] undermines the credibility of every witness that will be coming before the Congress this week," Daschle said. "If we've had the kind of sensationalism and erroneous data provided to the committee in the past, it's very likely it'll happen again."

Even so, it is clear the public airing of IRS horror stories have touched a nerve. In advance of this week's hearings, the Clinton Administration unveiled Monday a seven-point package of initiatives to improve the IRS Criminal Investigation Division.

"The criminal investigation division of the IRS plays a pivotal role in fighting tax evasion, and it is critical that its operations be beyond reproach," IRS Commissioner Charles Rossotti said in a statement announcing the plan. "We must address these concerns in a thorough, fair and objective fashion."

Among the steps are a comprehensive independent review of the investigations division. Rossotti and Treasury Secretary Robert Rubin will announce Tuesday that former FBI director William Webster will head the probe.

In Other News

Tuesday, April 28, 1998

Senate Panel Hears Stories Of Alleged IRS Abuses
Gloria Allred Wants To File Brief In Jones Case
Senate Weighs In On Year 2000 Problem
Social Security, Medicare Buoyed By Strong Economy
Clinton Threatens Veto Of U.N.-Abortion Bill
Gingrich, Waxman Clash Over Finance Hearings
Some Lawmakers Want To Go Slow On NATO Expansion
Special Prosecutors Examine Lewinsky's Finances
Gingrich Seeks To Break Campaign Finance Investigation Deadlock

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