Just Imagine: An IRS That Serves the Taxpayer

Try to imagine this. The Internal Revenue Service is stripped of its bullying arrogance. It’s held accountable for the costs to taxpayers of improper or faulty audits and investigations. When the agency owes you money, the situation is regarded as seriously as when you owe the agency. Honest taxpayer mistakes are treated like, well, honest mistakes. The agency acquires computer systems that function properly. Vital personal information is closely protected, and use of the word “competence” in connection with the IRS is no longer a contradiction in terms.

Fantasy? Perhaps not, now that the Congress and President Clinton have finally begun to address the problems. The House took a good-size step in that direction Wednesday with its overwhelming approval of a bill to establish an oversight board for the IRS. The legislation would also strengthen the hands of taxpayers in disputes with the agency.

That followed on the heels of Senate confirmation this week of the president’s decidedly different choice for IRS commissioner. Management consultant Charles O. Rossotti, who successfully led a global technology company called American Management Systems, figures to deliver a new perspective to the agency. Most previous commissioners have been tax officials or accountants. That was part of the management problem.

Certainly there was no need for further proof of the agency’s bungling and abusiveness, not with the recently documented cases of agents demanding the wrong tax forms from taxpayers and the costly, almost comedic failures of the agency’s computer systems.

And the difficulties range even deeper, threatening fundamental privacy. It seems the IRS sometimes gives out more than mere incorrect answers. As The Times reported this week, internal auditors posing as taxpayers obtained supposedly confidential information in 96 of the 109 phone calls they made to the agency.

These are not new problems, and it should be noted that the president and, particularly, Congress were quite late in mounting their investigations. Still to come is a badly needed overhaul of the labyrinthine tax code itself, which legislators have made even more complicated and ambiguous over the years. In this situation, clarity would be a key return.