The law's 17 reforms include automatic IRS disclosure of rights for taxpayers whose returns are questioned; an increase in the waiting period for seizures of property from 10 days to 30 days after notice; and limited awards of legal costs to taxpayers who successfully challenge the IRS. But the Taxpayer's Bill of Rights fails to adequately address the powerlessness most taxpayers experience when they attempt to defend themselves against the IRS.
Under the original version of the law, as sponsored by Sen. David Pryor (D-Ark.), taxpayers could have sued the IRS for damages if any agency employee "carelessly" or "intentionally" disregarded any provision of the tax laws. As the bill evolved through the congressional committee process, the word carelessly was dropped. For taxpayers who have been financially harmed or devastated by IRS carelessness, as the Councils clearly were, proving that IRS employees intentionally wronged them is almost impossible.
As Kay Council learned, even those who beat the IRS suffer substantial financial damage. Kay was fortunate to have a judge who mandated that the IRS pay some of her legal fees. But at a rate of $75 an hour, the current law's cap, the award fell far short of the $135 an hour charged by her attorneys, forcing her to cover the difference.
It seems perverse that a taxpayer wronged by IRS employees has to exact justice by winning monetary compensation from other taxpayers. Six years ago, Rep. Andrew Jacobs (D-Ind.) introduced a tax-bill amendment permitting federal judges to hold IRS employees personally liable for legal fees incurred by taxpayers who prove that the employees have taken arbitrary and capricious actions. The amendment lost in the face of arguments that such accountability might affect IRS employee recruitment.
Yet the fundamental concept is sound. Why not hold government employees responsible for their mistakes? Under the present system, the IRS rarely disciplines even those employees who are found to have committed serious errors.
David Keating, executive vice president of the National Taxpayers Union, argues: "It seems clear that the IRS is more interested in controlling, regulating, and punishing taxpayers for their violations than they are in controlling or punishing their own employees for comparable infractions. "
IRS Commissioner Fred Goldberg says his agency needs better-trained, more highly paid personnel and improved data processing to help eliminate errors and improve response times. Just modernizing the IRS computers could cost $6 billion or more. Goldberg concedes that the American public resents the complexity of the tax laws and "hassles with the IRS that take month after month to resolve." He has urged Congress to greatly simplify the tax code to make it easier for taxpayers to understand and comply with, and easier for IRS personnel to enforce.
Complexity does work to the disadvantage of all but the most astute and well-heeled taxpayers. Complex and vague laws encourage enforcement abuses. If an individual within the IRS decides to "get" you, or even to ignore you, the complexity of the tax code enables the agency to plausibly deny wrongdoing and create a financial headache for you.
Above all, taxpayer rights must be vigilantly safeguarded. In the last Congress, Sen. William Armstrong (R-Colo.) introduced a series of bills called "Fair Play for Taxpayers" to provide full compensation for legal expenses to taxpayers who beat the IRS in court and to allow taxpayers to sue the IRS for carelessness. The legislation never got anywhere, and Armstrong has since retired from Congress. It remains for another member, perhaps Pryor, to inherit the role of taxpayer advocate.
When the Senate Finance Committee, which oversees the IRS, held routine hearings on the agency last April, Kay Council came to Washington. She barely kept her emotions in check as she spoke to a hushed hearing room. "I was cheated of growing old with the man I love. I lost my best friend. Somebody should be held accountable for the destruction to me and my family. Beating the IRS should give some meaning to Alex's death, but it hasn't. There has to be more. If enough little people like me keep coming forward, there will be changes."
Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time.
nfl jerseys|11.26.10 @ 8:26PM|#
hxryh