by Ken Rankin
Washington - Bush Administration hopes of putting a longer leash on Internal Revenue Service tax watchdogs are running into resistance in Congress where memories of abusive practices at the IRS are still fresh.
At issue: provisions of the 1998 IRS Restructuring and Reform Act that requires summary dismissals of revenue officers and other agency employees who engage in specific types of taxpayer abuse.
These grounds for discharge - nicknamed the "10 Deadly Sins" by IRS employees - include offenses ranging from physically assaulting taxpayers to lying under oath about a matter concerning a taxpayer or a tax practitioner.
The president’s fiscal year 2003 budget package calls for eliminating the mandatory firing provisions and giving the IRS commissioner discretion to determine the punishments for such activities.
"The administration’s proposal would enhance the IRS’s effectiveness by more carefully tailoring the types of conduct by IRS employees that are subject to sanctions ... and by allowing the imposition of penalties that are commensurate with specific violations," Treasury officials explained.
Testifying in favor of this plan, National Treasury Employees Union president Colleen M. Kelley told Congress that the "10 Deadly Sins" provision has drained staff morale at the tax service and "has had a chilling effect on the ability of IRS employees to do their jobs."
Because "IRS employees continue to work in fear" of summary termination for taxpayer abuse, this provision has "contributed to the declining rates of audits and tax compliance," she said.
Congressional leaders, however, found those arguments less than compelling. "We do not have to choose between protecting the rights of taxpayers and properly enforcing the law," Senate Finance Committee chairman Max Baucus, D-Mont., said during the panel’s latest hearings on tax enforcement. "These concepts are not mutually exclusive; they are different sides of the same coin."
Congressional Republicans who lead the investigations into "IRS horror stories" during the 1990s are even less sympathetic to proposals for removing the tax service’s muzzle. "The lap dogs" at the IRS "are barking because they think the Senate Finance Committee is demanding too much" from the tax service, ranking GOP member Chuck Grassley, R-Iowa, groused during the hearing.
"We are asking the IRS to do its job of providing taxpayer service and enforcing the law," he said. "Unlike the lap dogs, I am confident that the IRS can walk and chew gum at the same time."
Grassley, a key architect of the 1998 IRS Restructuring and Reform Act, also dismissed arguments that the performance of the tax service is suffering because of under-funding by Congress. "The reality is that the IRS has had budget increases 29 of the last 30 years, and the Congress has fully funded the IRS budget request the last four years," he said.
Instead, Grassley suggested that the tax service has squandered much of its funds through mismanagement and waste. One study of IRS employee moving expense charges found extensive waste, he explained. The tax service "moved one manager twice in two years for nearly $300,000," Grassley said. "By contrast, the Commerce Department moved someone from Connecticut to South Africa for $8,200."
A separate investigation by the Treasury Inspector General for Tax Administration concluded that "IRS employees on the Internet spend half their time looking at pornography, shopping and gambling, instead of working," he told Congress.
