House votes 426-4 to overhaul the IRS Cardin, who championed measure, praises bipartisan leadership

November 06, 1997|By LOS ANGELES TIMES Sun national staff writer David Folkenflik contributed to this article.

WASHINGTON -- Moving to overhaul the Internal Revenue Service for the first time in decades, the House overwhelmingly approved legislation yesterday to establish a new oversight board to help run the agency and strengthen the hand of taxpayers in disputes with the most widely feared -- and much maligned -- arm of the federal government.

The bill was approved 426-4, a spectacular display of bipartisanship reflecting the powerful momentum for change created by this fall's Senate hearings on mismanagement of the IRS and taxpayer abuse by its agents.

"This vote was a real credit to the Republican and Democratic leadership," said Rep. Benjamin L. Cardin of Baltimore, who was the primary Democrat championing the overhaul measure in the House. Cardin supported the restructuring of the tax service because, he said, it was important to separate citizens' anger at it from future debate over the philosophical changes in tax policy that are being proposed.

"It was very tempting for us to confuse this with the underlying tax reform that is needed, or for Republicans or Democrats to demagogue the issue this way or that," Cardin said. "We didn't do that. We stuck to the core bill."

Despite the bill's easy progress through the House, a Senate leader said he would push for key changes to the measure in that chamber, thus slowing its progress.

Senate Finance Committee Chairman William V. Roth of Delaware said he wants to strengthen significantly some of the taxpayer protections in the bill, as well as provide additional powers for the oversight board.

"It would not be fair to American taxpayers to rush to pass something and then find that it is inadequate in its solutions," Roth said after the House vote.

The bill, endorsed by President Clinton last month as congressional support for it snowballed, would for the first time subject the IRS to oversight by a management board dominated by private-sector representatives.

It also would shift the burden of proof from the taxpayer to the IRS in civil court cases, make it easier for taxpayers to sue the IRS for damages, and increase the interest paid on refunds to taxpayers who have overpaid their taxes.

House Republican leaders portrayed the bill as a capstone of the year's legislative accomplishments, and promised further anti-tax initiatives in the coming election year.

"People are tired of the current tax code," said House Speaker Newt Gingrich. "They're tired of the way the IRS runs it."

The bill passed yesterday is based on recommendations by a yearlong commission headed by Republican Rep. Rob Portman of Ohio and Democratic Sen. Bob Kerrey of Nebraska. The measure was powered into the political fast lane by the recent Senate testimony about IRS abuses and mismanagement.

To improve management of the agency, the bill would establish an oversight board of 11 members -- eight private citizens appointed by the president, the Treasury secretary, the IRS commissioner and an IRS labor union representative. The board would review and approve the IRS budget, any reorganization proposals for the agency and its long-range strategic plans.

With Congress due to adjourn for the year later this month, Roth's desire to alter the bill means it could not emerge from Congress until sometime next year.

IRS proposal

Creates 11-member oversight board.

Shifts burden of proof on some Tax Court cases from taxpayer to the Internal Revenue Service.

Extends the confidentiality privilege in attorney-client discussions to accountants and other nonlawyers appearing before the IRS.

Expands protections for a spouse when tax problems are caused by a former spouse.

Allows taxpayers to sue the IRS for negligence.

Suspends statute of limitations on tax refunds for people suffering mental disability, such as Alzheimer's disease.

Caps penalty for late payment of taxes at 9.5 percent for people who have reached repayment agreements.

Associated Press

Pub Date: 11/06/97

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