Administration Introduces Its Own IRS Restructuring Bill
Congressman Charles B. Rangel (D-N.Y.) introduced, on behalf of the Clinton administration, a bill to improve the oversight and management of the Internal Revenue Service. The bill, the Internal Revenue Service Improvement Act of 1997 (HR 2428), is intended to implement some of the recommendations of the National Commission on Restructuring the IRS; however, it differs significantly from the commissions recommendations regarding IRS management and governance.
The commission published its recommendations on June 25 (see "IRS Restructuring Commission Calls for Independent Oversight Board; Treasury Strongly Disagrees," JofA, Aug.97). Legislation (HR 2292 and S 1087) already has been introduced in the House and Senate that implements most of the commissions recommendations, including the creation of an independent oversight board that would manage IRS operations (see "New IRS Restructuring Bill," Oct. JofA, p. 28, 1997). Although the Treasury Department agreed publicly that enhanced oversight of the IRS is desirable, it was critical of the commissions proposal to create an independent board, arguing that approach would remove the IRS from executive branch oversight.
Comparing Tax Burden State by State
The administration proposal calls for, instead of an independent board, a management board consisting of senior officials from the Treasury, the IRS and the Office of Management and Budget. The management board would work directly with the secretary of the IRS on its management and operations and be directly involved in decisions concerning modernization of the IRS and tax administration, including reorganization, budget, technology and personnel issues.
The bill also would make the current advisory board, composed of 14 individuals from outside the federal government, a permanent provision in the tax code. The advisory board would advise the IRS secretary and the management board on IRS management and operations, including ways to enhance the fairness of Internal Revenue Code administration.
The bill also would
|Taxpayer Relief Act of 1997|
How to Implement EIC
The Internal Revenue Service is requesting comments on how it should implement the earned income credit (EIC) due diligence provisions of the recently enacted Taxpayer Relief Act of 1997. Under the new law, effective for 1997 and future years, return preparers must fulfill certain due diligence requirements for returns claiming the EIC. The $100 penalty for failure to meet these requirements is in addition to other penalties that may be imposed under current law. Send your suggestions to Eileen Sherr, AICPA technical manager, by e-mail at firstname.lastname@example.org .
- Establish a five-year term for the IRS commissioner.
- Streamline the electronic filing system by eliminating many
- Set multiyear funding for the IRS.
- Create a more flexible management environment for hiring and
- Require the Treasury secretary and deputy secretary to report to
Congress annually on their stewardship of the IRS.
- Expand responsibilities and independence of the taxpayer advocate.
"This bill should be the basis of a bipartisan effort to create a more efficient, well-managed and responsive IRS," said Rangel in a statement. Cosponsors of the bill include William J. Coyne (D-Pa.), Steny H. Hoyer (D-Md.), Henry A. Waxman (D-Calif.) and Robert T. Matsui (D-Calif.).
Clinton Signs Antibrowsing Bill
President Clinton signed into law legislation that criminalizes the unauthorized inspection of taxpayer records by the Internal Revenue Service, as well as by state and other federal employees. Before the enactment of the Taxpayer Browsing Protection Act (PL 105-35), unauthorized access to or inspection of taxpayer files had not been a criminal offense.
According to the General Accounting Office, there were 1,515 cases in 1994 and 1995 in which IRS employees made unauthorized inspections of taxpayer records. Congressman Bill Archer (R-Tex.), the bills sponsor in the House, said in a statement to the press that although taxpayer records may be provided to the government, such information "belongs to the taxpayer, not to the government, and the government has an obligation to protect the privacy of the taxpayer."
The act provides for a monetary penalty, imprisonment or both for violators. It permits taxpayers to receive awards for civil damages, and it requires that the taxpayer be notified as soon as possible if any person is indicted for inspecting or disclosing a return or return information.
Deputy Treasury Secretary Lawrence H. Summers said IRS employees had been warned about unauthorized access and trained on IRS privacy policies. Taxpayers who suspect an IRS employee is snooping can call the IRS inspection hotline at 800-366-4484.
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