No one could come away from last week's congressional hearings on the Internal Revenue Service denying that the tax collection agency has been guilty of gross abuses of power or that it has serious internal problems. Some agents have behaved like thugs, others like crooks. Worse yet, the malfeasance sometimes took place with the knowledge and consent of IRS administrators.
Aggrieved taxpayers, and former and present IRS employees, told members of the Senate Finance Committee that IRS agents have conducted armed raids on unsuspecting citizens. Some helped large corporations cheat on their taxes in exchange for jobs. The agency failed to investigate credible allegations of corruption made against managers, and punished whistle-blowers who reported wrongdoing. In one particularly shocking case, it protected a rogue supervisor who conspired to bring false tax evasion charges against former Senate Republican leader Howard H. Baker Jr. And incredibly, the agency gave only a slap on the wrist to an agent who stole as many as 20 cars confiscated by the IRS.
There is plenty of blame to pass around for these abuses, but part of it rests with Congress for failing to police the tax collection agency. Instead, lawmakers have wasted much of the past decade using the IRS, and the public's distrust of it, to score political points. Republicans are exploiting the latest disclosures of IRS abuse to build public and political support for their anti-tax agenda, which includes abolishing or emasculating the IRS and replacing the progressive income tax with a flat tax. Most Democrats have been silent, or defenders of the status quo. Few, if any, politicians want to be caught defending the IRS. And many can't pass up an opportunity to blast it.
President Clinton, not wanting the Republicans to seize the political advantage on this issue, criticized the IRS in a radio address over the weekend, and lawmakers of both parties have promised a bipartisan effort to shake up the agency. The first test of Congress' commitment to reforming the agency will come this week as the Senate considers major legislation designed to overhaul the IRS and bolster taxpayers' rights. The bill would create a private review board to oversee the agency, give the Treasury Department's inspector general greater authority over the IRS and enact a taxpayer's bill of rights that would shift the burden of proof in tax disputes to the tax collector.
Congress should be careful not to overreact to the latest horror stories and damage the agency's ability to do its job. The legislation needs careful and deliberate consideration, not a quick roar of approval from lawmakers. Still not clear is where Congress intends to come up with $8-billion, the estimated cost of the IRS reforms.
IRS Commissioner Charles Rossotti has pledged to "investigate every allegation" of abuse and has proposed comprehensive reorganization. He deserves an opportunity to show what he can do. No one will be able to transform the IRS overnight. It will be a long process, requiring a long-term bipartisan commitment and greater congressional oversight. The IRS is a vital government agency that wields enormous power over American citizens. Abuse of that power cannot be tolerated.