Senator Plans for Probe of ‘Abusive’ IRS

Senate Finance Committee Chairman William V. Roth Jr. (R-Del.) outlined for the first time Thursday his plans for a wide-ranging investigation of the Internal Revenue Service, saying the agency had engaged in a pattern of abusive conduct.

In an interview, Roth lambasted the agency for “outrageous practices,” including intrusions into taxpayer privacy, unnecessarily aggressive seizure of property and unjustified audits of middle-class taxpayers that continue indefinitely.

“The agency as a whole does not enjoy the confidence of the American public,” Roth said. “It is looked upon too often as being abusive and having practices that are not fair and equitable.”

An investigation by Roth would only compound serious problems for the IRS, which already is bracing for proposals from a restructuring commission that has been conducting hearings since last year. The congressionally mandated panel is expected to issue its recommendations this summer.

Sen. Bob Kerrey, (D-Neb.), co-chairman of the restructuring commission, said last week in an interview that he believes the IRS needs a board that oversees its activities.

IRS Commissioner Margaret Milner Richardson said in an interview last week that she already spends about 40% of her time responding to oversight by the Treasury Department and Congress, making a big dent in her ability to focus on collecting taxes.

Richardson in the past has complained that Congress can’t decide whether it wants a tough or weak tax agency.

“There’s almost a schizophrenic attitude,” Richardson said in an interview last year. “They want us to collect every single nickel that’s due and owing, but they want us to do it in a way that is caring and soft and warm and fuzzy. Sometimes you can’t. . . . There’s this balance you have to strike here. When you’re in a collection mode, you’re not always somebody’s closest friend.”

A big investigation by Roth’s committee, however, would certainly raise the public-relations stakes for the IRS. Roth is one of only two members of Congress with authority to obtain specific taxpayer records, including tax returns. Moreover, he can delegate that review authority to his investigators.

In the past, Congress has seldom used the authority to look at tax records to check for IRS abuses in specific cases. As a result, the General Accounting Office, for example, has confined its investigations to sometimes lackluster policy issues.

Roth believes Americans hold a pent-up rage over the IRS that is bound to come pouring out once the issue is lanced.

When Roth briefly signaled his plans for a broad investigation of the IRS last week, he triggered hundreds of calls from taxpayers around the country with complaints about the agency, he said.

Among those complaints was one from an 87-year-old blind and disabled woman from a small town in Idaho who said the IRS had targeted her family after it sued the Occupational Safety and Health Administration. The family’s accountant is a former IRS agent who sat in on a meeting where the audit was planned, according to the committee.

Roth is still seeking $300,000 in funding for his probe, which must be approved by the Senate Rules Committee. Roth argued for the funding Thursday in a meeting with committee leaders, although whether he succeeded remains unknown.

Roth said the IRS has developed a culture that has led to overzealous enforcement of tax laws and the perception by some IRS agents “that they are God.”