Political Fight Stalls Hearing on IRS Abuses

A high-profile congressional hearing into taxpayer abuse by the Internal Revenue Service was cut short Tuesday following a political fight on the Senate floor that shut down the committee hearings for the day.

The IRS hearing itself became its own political battleground, as allegations flew that the Senate Finance Committee was using the tax agency as a convenient target for political points.

Sen. Jay Rockefeller (D-W.Va.), a supporter of the IRS and its huge operations in his state, disclosed that a number of Republicans had issued fund-raising letters that trumpeted their attacks on the IRS.

One of the letters came from Senate Majority Leader Trent Lott (R-Miss.), who has thrown his weight behind the abuse hearings. Sen. Mitch McConnell (R-Ky.) wrote to contributors, “With your immediate help today, we can virtually abolish the IRS as you know it.”

Lott made a cameo appearance at the hearings Tuesday, saying he intended to delay convening the entire Senate today so that the hearings would get more attention--apparently on television. The hearings are scheduled to continue today and Thursday.

Meanwhile, Sen. William V. Roth (R-Del.), committee chairman, opened the hearings with the assertion that “there is no political bias--no partisan motive--behind our investigation and these hearings.”

He wasted little time in unleashing a virulent attack on IRS abuses, including the agency’s practice of issuing false identity badges to certain revenue and collections agents.

“I’m concerned that it makes them unaccountable,” Roth said.

An IRS spokesman acknowledged that the agency has issued about 350 pseudonyms for employees. The practice began in 1992, a result of a labor agreement between the IRS and employee unions.

Both Roth and Sen. Daniel Patrick Moynihan (D-N.Y.), the committee’s ranking Democrat, said they have never known of IRS practices in issuing false credentials.

Joseph F. Lane, a Menlo Park, Calif., tax accountant who served on the recent national restructuring commission, testified that the stunning 25% increase in personal bankruptcies recorded in the U.S. last year is in large part due to punitive new IRS policies on establishing installment payment plans for individuals who owe back taxes.