A controversial tax return inspection provision contained in a  Bush administration budget bill for fiscal 2005 will be removed before the legislation is sent to the White House for the president's signature.

On Nov. 20, Congress passed the omnibus appropriations bill containing a provision that authorized "agents" of the House or Senate Committee on Appropriations to have access to Internal Revenue Service facilities "and any tax returns contained therein." The provision was apparently drafted by the IRS and inserted in the final budget bill without discussion of the potential consequences.

Members of Congress became aware of the provision the following day, and the Senate passed a provision deleting the clause.  The House will adopt the Senate resolution on November 24.

"They're saying it was inadvertent," said George Pieler, a research fellow with the Lewisville, Texas-based Institute for Policy Innovation.  "This is probably true, in the sense that it was not intended to have any broad intrusive impact.  But having seen sausage made from the other side, I'm always skeptical as to explanations of how things got where they are."

"The legislative fix will be adequate," said Pieler, "because so many people will be watching."

Appropriations committee chair Rep. C.W. Bill Young  said that some people "misinterpreted" the provision.  "The administration had requested an unprecedented increase to hire additional staff for the IRS's processing and enforcement activities.  Because of this more than $500 million increase in funds, the subcommittee felt it necessary to conduct proper oversight.  The provision was simply an attempt to exercise our constitutional stewardship of the IRS's budget request, with no intention to review or investigate individual tax returns," Young said in a statement Monday. "Clearly, there was never any desire to access personal information, and it's unfortunate that some have misrepresented and exaggerated the purpose of this language." Nevertheless, Young said that he supported the removal of the provision. 

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