IRS Horror Stories: It’s Time to Clean House

The horror stories told this week to the Senate Finance Committee about abuses of power by the Internal Revenue Service did not all come from victimized taxpayers. Present and former agency employees, some of them speaking with their voices disguised, provided insights that powerfully supported the grievous accounts given by some who had run afoul of the IRS. For whatever reason--ambition, vindictiveness, ignorance or plain internal muddle--IRS employees have inexcusably hounded and harassed taxpayers who had broken no laws or, at worst, had simply misunderstood confusing tax rules. In perhaps the most shocking revelation of all, one IRS agent alleged the service sometimes fabricated evidence to bolster its claims.

Michael P. Dolan, the acting IRS commissioner, has apologized for these misdeeds and promised speedy reforms to protect taxpayers’ rights. Among them will be suspension of a requirement that few people outside the service probably knew about: revenue goals that are set for specific IRS districts, with district offices ranked on the basis of what they collect. That is inevitably a prescription for pursuing the collection quotas that Congress thought it had outlawed in 1988, and for subjecting law-abiding taxpayers to embarrassment, liens and even persecution.

“The IRS works for the taxpayers, not the other way around,” Sen. Bob Kerrey (D-Neb.), co-chairman of the National Commission on Restructuring the Internal Revenue Service, wrote earlier this year. Those words ought to be pasted on the computer of every IRS employee. But while the IRS must be called to account for its offenses and incompetence--including a $4-billion computer system that doesn’t work--the complicity of Congress cannot be ignored.

This week’s oversight hearing by the Finance Committee, for example, was its first ever on the subject, even though the IRS has existed since 1862. More to the point, Congress continues to embellish a tax code whose complexity baffles not just the average taxpayer but many of those who must administer it. The 285 new sections and 824 amendments added to the tax code this year fattened it to 9,451 pages. Some day, maybe, true simplification will be achieved. In the meantime the IRS has been caught committing grave and even flagrantly illegal offenses. It must clean house, and urgently, this time with Congress prepared to exercise the oversight it has so sorely neglected.