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| AUDITING THE IRS
September 25, 1997NEWSHOUR TRANSCRIPT |
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The Senate Finance Committee continued their investigation of the IRS, and today, unidentified IRS employees gave their testimony.
MARGARET WARNER: The IRS came under fire again today in the Senate Finance Committee's third day of hearings into the agency's conduct. Five current IRS employees led off the testimony, their identities concealed behind a screen and their voices electronically scrambled. They essentially corroborated yesterday's testimony. They said the IRS tended to target lower income taxpayers who couldn't fight back and at times falsified evidence against them all under the pressure of agency goals and quotas. One agent testified that management was a big part of the problem.
UNIDENTIFIED IRS EMPLOYEE: During IRS all manager training conducted in the late 1980's one of the blocks of instruction dealing with employees stated that it was acceptable and permissible to lie or mislead as long as it accomplished the goals and missions of the agency.
MARGARET WARNER: This afternoon it was Acting IRS Commissioner Michael Dolan's turn. Dolan began by readily admitting the seriousness of what the Senators had been hearing.
MICHAEL DOLAN, Acting IRS Commissioner: I don't come here in denial. These have been a very painful three days, painful because it distresses me greatly to see the mistakes we've made, to see the impacts of those mistakes.
MARGARET WARNER: He apologized to individual taxpayers who had testified yesterday of abusive treatment by the IRS.
MICHAEL DOLAN: These taxpayers didn't receive the treatment that they deserved. And while each of the cases was different, the end result was indisputable. We were wrong in the way we handled many aspects of the cases.
MARGARET WARNER: Dolan then turned to the issue of the IRS culture and whether it encouraged agency employees to be too aggressive in pursuing the roughly 15 percent of taxpayers who cheat or otherwise underpay their taxes.
MICHAEL DOLAN: For taxpayers who do not file we clearly I think are compelled to use the enforcement tools that you have given us in almost out of fairness to the people who do comply. Now, the question I think that's been before this committee is are those tools used as you want them to be used? Are they used with the sensitivity and with the care and with the precision that Congress authorized to use them? I think there have been some very valid questions raised in the course of the many people you heard from.
MARGARET WARNER: Then he turned to perhaps the most damaging allegations made in the past two days, namely that IRS auditors and enforcement agents target taxpayers who are financially strapped, poorly educated, or otherwise less able to challenge the agency.
MICHAEL DOLAN: That somehow or other it is a strategy of the Internal Revenue Service to devote more of its enforcement resource on the lower income taxpayer than the higher income taxpayer. My personal perspective on that is that the data just doesn't bear that out.
MARGARET WARNER: But he did acknowledge that even though it's against written policy, many individual IRS employees do feel they're being evaluated based on how much they collect in disputed cases and how often the resolve a case in the agency's favor.
MICHAEL DOLAN: As you've been having your hearings and had people come before you, I've had people call me up. I've had people fax me. I've had people tell me that they believe there are violations in that arena. And so I don't sit before you to discount that at all. I think it has to be examined much more carefully than perhaps we've examined in the past.
MARGARET WARNER: The law does allow IRS management to set goals and quotas for offices but Dolan said that from now on he will suspend all revenue production quotas and goals for IRS field offices. The Senators praised Dolan for his candor.
SEN. PHIL GRAMM, (R) Texas: I, for one, am appreciative of the attitude that you brought before this committee. I think had you come here today in a defensive posture that we would have had tremendous confrontation, which would not have served the IRS or the committee well.
MARGARET WARNER: But they did not sound entirely reassured by the steps Dolan had taken.
SEN. WILLIAM ROTH, Chairman, Finance Committee: I'm concerned that you do not understand the depth of the problem. There's a very deep-rooted concern that in the agency the culture is not serviced, it's not citizen-friendly, but that you are an enforcement agency.
MICHAEL DOLAN: One of the things that I think we frequently do is set this up as if they're polls. On the one poll is service and on the other poll is enforcement. I don't believe that's the case. I believe it's a spectrum, having a system where people are able to be, encouraged to be as compliant as possible. On the other--at some point in time, though, if I'm here and I am compliant, I do think you expect--I think that that person expects the Internal Revenue Service to deal with somebody who's not pulling their load.
MARGARET WARNER: This round of hearings is over, but committee members said pressure on the IRS to reform its methods will continue.
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