President Clinton on Friday unveiled a broad plan to protect taxpayers from abusive practices by the Internal Revenue Service, aiming to sooth boiling public frustration with the agency highlighted during recent congressional hearings.
The White House plan also represents an attempt to seize the anti-IRS initiative from congressional Republicans, who are seeking many of the same reforms but would transfer control of the tax-collecting agency from the Treasury Department to an independent board.
Much of the plan outlined by Clinton will not require legislation. Reforms that he can put into effect himself include a revision of tax forms to put them into plainer English and operation of the IRS telephone system round the clock, seven days a week, by 1999. Currently, the phones are active only 12 hours a day, Monday through Friday.
Clinton will ask Congress for legislation to strengthen the taxpayer advocate's office at the IRS, to create an outside board of trustees that would advise the Treasury Department, and to form 33 local citizen review boards that can intervene on behalf of taxpayers.
"If we act now, we can make sure that the IRS genuinely earns and deserves the trust of the American people, and we are determined to achieve that goal," Clinton said.
An underlying theme of the administration's package is that a kinder and gentler IRS will induce more tax compliance. But a number of tax experts worry that it will only reinforce a long-term trend of greater cheating.
Taxpayers are growing more brazen in avoiding taxes, despite the agency's aggressive tactics. An estimated $100-billion gap exists between what Americans should pay and what the agency is able to collect.
The emphasis Friday, however, was on making sure that taxpayers who fall victim to abusive tactics have greater recourse. Clinton said that he will seek legislation for enhanced taxpayer rights, for example, seeking protection for individuals currently held accountable for the illegal acts of a spouse.
The new initiatives would expand the use of installment payment agreements for tax debtors. It also would permit taxpayers with disputed tax bills of as much as $25,000 to use simplified procedures when they go to U.S. Tax Court. The limit now is $10,000.
Also, during tax season, IRS offices would be open Saturdays.
The administration is seeking to create two types of outside panels to monitor the IRS. The 33 local citizen boards are seen as a last resort for frustrated taxpayers, though they will have no jurisdiction to intervene against the IRS and will lack authority to view tax records without a taxpayer's consent.
But the plan authorizes the taxpayer advocate, an existing office within the IRS, for the first time to intervene in individual cases and in some cases order that collection actions cease.
"A taxpayer who has been treated unfairly should have somewhere to go, someone to fight on his or her side, someone to make the agency listen," Clinton said. "With a stronger taxpayer advocate, and these new citizen panels, they will have just that."
But that falls short of proposals raised in recent Senate hearings on IRS abuses that would require a federal court hearing every time the IRS seizes a home, a business or a bank account.
None of the reform proposals by either Clinton or Congress would significantly reduce the IRS' sweeping power to audit taxpayers, assess income taxes and seize property.
The advisory board sought by Clinton would oversee the IRS and make reports to Congress annually but would have no direct management or governing authority.
By contrast, Republicans want an independent board that would have the power to hire and fire the IRS commissioner and set the agency's budget.
Republican reaction to the president's ideas was swift and harsh.
"Without true accountability, there can be no reform," said House Speaker Newt Gingrich (R-Ga.). "The administration's IRS reform plan is so skimpy that if a person were wearing it on the beach, they'd be arrested for indecent exposure."
A bill introduced by Rep. Rob Portman (R-Ohio), co-chairman of the IRS restructuring commission, includes a number of reforms similar to Clinton's proposals, but it transfers IRS management to an outside board of directors.
Portman said that he has 100 sponsors for the bill, including a number of Democrats.
"Most Democrats in the House and Senate, when they look at this legislation, want to get on board," Portman told The Times. "I think we will pass in the House with overwhelming numbers."
Treasury Secretary Robert E. Rubin said he is hopeful that the two sides can find a compromise, but said that he would not be willing to grant any governing authority to an independent board.