Congress gets ready to take a close look at IRS Hearings to include testimony by disguised agents, nightmare cases

September 21, 1997|By LOS ANGELES TIMES

WASHINGTON -- One of Congress' most powerful committees is preparing a major broadside against the Internal Revenue Service this week -- complete with IRS agents testifying under black hoods that the agency routinely abuses and mistreats taxpayers.

The Senate Finance Committee will begin three days of hearings Tuesday that promise to disclose some of the most explosive evidence of IRS wrongdoing in more than a decade.

"There are very, very serious problems in the agency," committee Chairman Sen. William V. Roth Jr., a Delaware Republican, said in an interview. "This whole situation cannot be tolerated."

The IRS' top official, acting Commissioner Michael Dolan, acknowledged in an interview that Roth's investigation has turned up notable instances in which taxpayer cases were handled improperly.

IRS critics say the problems result partly from pressure on IRS collections officers to exercise as many liens, levies and seizures on taxpayers as possible.

"Revenue officers are being pushed by their superiors to undertake more seizures in order to achieve promotions within the system," said Robert Scriebman, a tax attorney and author of several books on taxes who will testify.

The hearings come at a critical juncture for the troubled agency, as the Clinton administration fights efforts by Republican and Democratic reformers in Congress to wrest control of the IRS from the Treasury Department and turn it over to an outside board of business executives.

Criticism of the IRS has been growing during much of the past year, for its antiquated computer technology and the increasingly convoluted body of tax laws that it must enforce.

Never before has the Senate Finance Committee, whose central mission is to keep the government fully stoked with tax revenues, held three days of oversight hearings into IRS abuses. And not since the late 1980s has Congress delved with such vigor into the agency's dirty laundry.

IRS officials, meanwhile, are braced for the worst: a three-day attack on the professionalism, competence and ethics of an agency that has been trying to recast itself in a modern image.

IRS officials have said repeatedly over the past year that the agency intends to become an efficient consumer service organization, keeping taxpayers satisfied while collecting $1.3 trillion each year.

But the evidence from Roth's witnesses -- investigative writers, anonymous revenue agents and wronged taxpayers -- is going to tell a more chilling tale.

Among the allegations will be that innocent taxpayers can become trapped for years in IRS pocedures through administrative errors, unable to purge mistakes from the agency's computer.

One of the star witnesses will be Katherine Lund of San Bernardino County, Calif., who has lived through the kind of bureaucratic nightmare for the past 10 years that would trigger panic in any American taxpayer.

IRS agents, acting in error, repeatedly seized Lund's bank accounts and the wages of her husband, Orange County prosecutor James Hicks.

Every time Lund tried to pay the IRS, the agency would return the money and claim she didn't owe anything. Then, another branch of the IRS would start dunning her again.

It looked as if the matter was settled -- until 1996, when the IRS rolled out a lien on Hicks' and Lund's financial accounts. The agency obtained a levy on 90 percent of Hicks' wages, although Orange County later refused to honor the levy.

Out of desperation the couple filed for divorce this year -- not because they wanted to end their marriage but to protect Hicks' wages from the collection tactics of the IRS.

After Roth's committee began looking into Lund's case this year, IRS officials in Washington reviewed the case. The IRS owned up to its mistakes last week in a contrite letter to Lund.

Dolan is legally barred from discussing individual cases, but he acknowledged in general that people can fall into a computer twilight zone.

Pub Date: 9/21/97

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