Despite any trauma the Internal Revenue Service Restructuring and Reform Act of 1998 may have caused at the time, the IRS in the 10 years since the law's enactment has become a better, more taxpayer-friendly agency, panelists at a July 18 conference sponsored by Tax Analysts agreed. (For related coverage, see Doc 2008-15947 and Doc 2008-15938.)
Speaking on a panel that considered the present state and future of the Service, National Taxpayer Advocate Nina Olson said she "could go on and on about what's positive about the restructuring act, starting with my own job."
The act caused a much-needed shift within the Service from a single-minded focus "on collecting dollars" to a broader understanding of the needs of taxpayers and how they could be helped to comply with tax laws, Olson said.
Theresa Pattara, now Republican tax counsel on the Senate Finance Committee, said that when she joined the IRS in 2000, she was shocked to hear language appropriated from the private sector, such as referring to contact with taxpayers as "customer service."
Even so, Pattara continued, "I find it actually quite exciting to see that they're following industry standards when it comes to customer service," particularly as the new rhetoric has been matched by positive results, such as more responsive and accurate telephone call centers.
Les Book, a professor at Villanova University School of Law and director of a student-run low-income taxpayer clinic, cited the 150 or more low-income taxpayer clinics now in existence as a "testament to the positive effect of restructuring."
"As we speak, some person is probably meeting with a representative who is explaining, for example, what they can do to ensure what they can do to be eligible for the earned income tax credit," Book said.
Progress, however, risks complacency, and Olson said that further reforms, such as a new taxpayer rights bill, might not come without an exaggerated media spectacle of the kind staged a decade ago.
"I'm hopeful that we are not so cynical that we need to have people [disguised] with digitized voices testifying before the Senate Finance Committee again in order to get a bill passed that brings about some refinements to some of these things," Olson said. One of the more outrageous moments in the 1998 hearings came when IRS employees testified about allegedly excessive enforcement measures while concealed behind a curtain.
In a sign of how much has changed in the past decade, Pattara and Mary Baker, a tax staff professional who works for Finance Committee Chair Max Baucus, D-Mont., were worried less about the IRS overstepping its authority than about whether it was raising enough revenue in an efficient manner.
Pattara raised questions about whether the Taxpayer Advocate Service might be involved in "mission creep," taking on the role of other oversight agencies in some of the studies it conducts and taking on the role of the collection side of the IRS through its activity in resolving taxpayer complaints.
Olson responded that unlike other oversight organizations, the Taxpayer Advocate works within the IRS to find solutions to problems.
Baker also argued that because "the IRS is always going to have limited resources . . . it's very important for IRS leadership to assess programs in a responsible way."
Baker spoke at length about the roughly $300 billion tax gap, an issue raised often by her boss. Particularly in the context of "pay as you go" budget rules, she said, any action that would lead to "increasing revenues without increasing taxes deserves a serious look."