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 Opening remarks from IRS Commissioner Charles Rossotti (05-01-98)

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IRS Commissioner Questioned By Senate Panel


WASHINGTON (AllPolitics, May 1) -- Following three days of stories about police state tactics, vindictive management, inept agents and capricious audits by the Internal Revenue Service, the Senate committee looking into these charges heard from the head of the tax agency Friday.

IRS Commissioner Charles Rossotti told members of the Senate Finance Committee that he was "very troubled" by the tales of IRS abuses related during this week's hearings by taxpayers and IRS employees, and vowed to investigate each one.

"From my point of view any kind of mistreatment of one taxpayer or one employee is one too many," Rossotti told the panel.

"We simply must change the conditions that lead to the situations described by your witnesses. We have to help and provide better service to taxpayers who willingly comply with their obligations and we have to have absolute respect for the rights of all taxpayers," he said.

Rossotti, who appeared on the fourth and final day of hearings by chairman William Roth's (R-Del.) committee, said he could not comment further on the specific allegations, because investigations were in progress.

The commissioner is new to the IRS, and is neither an accountant nor a tax expert. Instead he comes from a business management background, and is drawing on that experience to reform the troubled agency.

"Over time we must demystify the audit process and make it clear that an audit is not a signal that a taxpayer has done anything wrong. An audit should be used only to determine whether a taxpayer has payed the correct tax liability. Audit selection should never be punitive."

Despite the anti-IRS sentiment that has ruled this week's hearings, the exchanges between the senators and Rossotti were non-confrontational. The new IRS commissioner has made cooperation with the Congress a priority.

Pledging that each of the charges heard during this second round of hearings would be investigated, Rossotti said, "I very much welcome your suggestion, Mr. chairman, that the GAO be given the responsibility to investigate and get the facts on each and every one of these investigations and I promise you that when we get the results of those investigations we will act accordingly and take disciplinary actions where the allegations are substantiated," said Rossotti.

Rossotti drew bipartisan praise for changes he has already implemented, but he was urged to go farther, faster.

Roth said, "Paramilitary techniques are being used against non-violent citizens. Racial discrimination, sexual harassment appear to be common place. And we've even heard evidence of what appears to be, in a sense, extortion, framing and zeroing out of high-dollar liabilities. So this tells me that management -- the managers responsible for the day-to-day operations of IRS are not doing their jobs."

But Rossotti cautioned that reforming an agency with more than a 100,000 employees and dozens of layers of bureaucracy required a longterm plan spanning the next ten years.

"Change of this magnitude will take time and there is no magic formula or easy solution that will quickly solve the IRS problems and transform it into a quality service organization. Fundamental change requires a comprehensive systematic and sustained approach. We will make progress, Mr. chairman, but it will be step by step over a period of years," he said.

Among Rossotti's efforts to overhaul and modernize the IRS are:

  • An independent review of the IRS inspection service, which researches employee misconduct, by former Comptroller General Charles Bowsher.

  • Customer service improvements including closely monitoring taxpayer complaints, increasing IRS' problem resolution staff and clarifying IRS communications with taxpayers.

  • An investigation of managers and agents who may have been responsible for abuses described in last September's IRS hearings.

  • A proposed major reorganization of the IRS into four new divisions in order to improve customer service and streamline management to orient the agency from a customer's point of view.

    One common complaint against the IRS Rossotti took issue with was that the agency unfairly targets taxpayers in lower income brackets. "Concerns have also been raised and have bothered me a great deal when they were raised that IRS audits in some way unfairly target poorer taxpayers," Rossotti said. "The chance of a taxpayer with income over $100,000 being audited is about four and a half times as high as for a low income taxpayer."

    "The first round of Senate Finance Committee hearing produced positive results for taxpayers as I hope these will," Rossotti concluded in his opening statement.

    CNN's Candy Crowley contributed to this report.
  • In Other News

    Friday, May 1, 1998

    Tapes: Hubbell Showed Concern About First Lady's Legal Work
    Starr Draws Parallels Between His Investigation And Watergate
    IRS Commissioner Questioned In Senate Hearing
    Senate Ratifies Entry Of Poland, Hungary, Czech Republic To NATO
    Clinton Using California Trip For Visit With Chelsea
    House OKs D.C. School Voucher Plan
    House GOP Unveil Drug War Strategy
    Congress Passes Emergency Spending Bill, Veto Threat Withdrawn

    The "Inside Politics" Interview: Sens. John Ashcroft, Carol Moseley-Braun

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