Restoring Rights to the Taxpayer

Reform of the Internal Revenue Service, long overdue, may finally be on track. In a rare show of bipartisanship, the Senate last week voted unanimously to provide significant new protections for taxpayers. The next step: conference committee, where the Senate bill will be reconciled with a similar measure passed by the House late last year. The legislation brings Americans one step closer to the first reforms at the agency in decades.

Internal investigations, a task force report and a nationwide survey all have identified painful and abusive experiences--and expenses--that taxpayers have had to endure at the hands of some federal tax collectors. The most compelling evidence that the federal tax-collection agency needs a thorough shakeout came in testimony before the Senate Finance Committee two weeks ago.

Tax collectors, of course, have been the bad guys of government since the earliest civilizations. Who could like an official who demands a cut of your money for some distant potentate and will take other goods if you fail to fork over? In Washington, on the eve of the millennium, the picture had not changed. Witness after witness testified to being harassed, deceived and shaken down by IRS agents.

That was enough for the Senate, which voted 97 to 0 to establish new taxpayer rights. If the legislation is approved by both houses, the burden of proof will shift to the IRS in civil court allegations of taxpayer error. Currently, taxpayers must prove their innocence.

The bill would create a new federal board, including some private citizens, to oversee the reorganization and management of the IRS and its 100,000 employees. Penalties and interest charges would be suspended in cases of drawn-out tax disputes.

Many of the problems at the IRS stem from the complicated 10,000-page U.S. Tax Code, oft-amended by Congress to favor political supporters. This time senators and representatives will be asked to approve changes for the good of all taxpayers. The Senate bill would require an analysis of the complexity and impact of any new tax provisions, especially those affecting small businesses and individuals.

Restructuring the IRS is one of those rare issues where partisanship seems to have been set aside with the goal of treating citizens as involved parties, not mere piles of dollars. The IRS had lost sight of that picture.