Saturday, January 15, 2011
STRATEGY FOR TAX REFORM/SIMPLIFICATION The best foundation for tax reform, tax simplification and IRS reform is to demonstrate to the public that the IRS does not and cannot administer the tax law, in too many instances, according to its Mission Statement to apply the tax law with “integrity” and “farness.” Although there are many cases in which the IRS administers the tax law professionally and effectively, there are inefficiencies and systemic problems with the IRS . I am a witness to all forms of abuses of power, abuse of discretion and misapplication of law. In many cases IRS examiners are finders of fact, prosecutor and judge, and that leads to systemic unfairness in the IRS administration of the tax law. Congressional oversight of the IRS has been lacking. I am aware of the Senate Finance hearings in 1997 on instances of IRS misconduct. Congressional oversight of the IRS is necessary because there is little IRS “transparency” due to the privacy law that precludes disclosure of privileged taxpayer information. This is an independent reason for the IRS to schedule IRS “misconduct” hearings. I have witnessed is generally willful misapplication of IRS Code tax law. In the case of IRS levies, for example, the IRS always violates the legislative limitations on levies. The National Taxpayer Advocate has for too many years ignored her legislative mandate to intervene with Taxpayer Assistance Orders in cases where the IRS has imposed a economic hardship on taxpayers that are legislatively prohibited. There are multitudes of other instances of IRS misconduct, abuse of power and abuse of discretion. In a general sense, I can testify to the fact that the IRS is largely out of control and poorly administered in many areas dealing with IRS collections and examinations. The IRS bureaucracy is inflated with too many managers. There is extremely poor line authority on technical issues. IRS revenue officers and revenue examiners are generally undereducated and under trained. Attorneys are trained to interpret or apply tax law. IRS revenue officers and revenue examiners are not only unskilled non- attorneys, their managers are unskilled non- attorneys and yet they are empowered to make legal decisions. I am a witness to IRS conduct that is even criminal such as voluntary disclosure of privileged taxpayer data. For these reasons, many decisions made by the IRS are unreasonable and wrong. The burden of litigating an IRS is expensive and most taxpayers are without representation or cannot afford the cost of litigation. Any hearings on IRS misconduct should also consider the inefficiencies of the office of the Treasury Inspector General for Tax Administration in dealing with IRS employee misconduct. There are two reasons for the House and Senate to hold IRS misconduct hearings: 1) There are many systemic IRS problems that need to be identified and corrected. These problems need to be corrected. 2) Systemic problems brought to the attention of the public and the media will support the need for tax reform/simplifications. A tax reform proposal will have far better public acceptance when Congress demonstrates (through the IRS misconduct hearings) that the reform proposal is necessary to protect the taxpaying public Alvin S. Brown, Esq. As a tax attorney with an IRS “controversies” national tax practice since 1998, I have special insight into the IRS. I previously had a 27 year career as an interpretative attorney/manager in the office of the IRS Chief Counsel.