Cleaning up the IRS Mess

WASHINGTON, D.C.: Because death has begun to look a lot more certain than taxes, the Clinton Administration is presenting a plan to rework the IRS by strengthening the oversight and management of the troubled agency. The IRS is under fire after admitting to misusing or wasting $400 million out of $3.3 billion spent on a computer modernization project since 1987. The computer troubles are increasingly frustrating and relevant -- just try logging on to the IRS website (www.irs.ustreas.gov) as tax time approaches. What's more, the agency is coming under increasing criticism from the General Accounting Office for a 'tax gap' of some $150 billion annually that is due mainly to taxpayer fraud. To help clean up the mess at the IRS, the Treasury Department wants to make permanent an IRS oversight board to help supervise the computer upgrade. The plan would allow for more outside consultants to help with the computer overhaul. The plan also would let the IRS contract with private businesses to assist with processing tax returns and collect on tax deadbeats, an initiative that could be ripe for its own pitfalls if, for instance, collection agencies are given the authority to garnish wages or seize bank accounts. Another important reform: changing budgeting procedures. Congress currently funds the IRS on a yearly basis, making long-term planning difficult. The Administration would like to make IRS budgets cover a longer time period. Summers said the administration "will work to simplify the tax code" but did not provide details. Details, of course are what Republicans are only too happy to provide. According to Dick Armey, Americans spend 5.4 billion hours a year complying with the tax code, more than is spent building every car, truck and van in the U.S. Rather than upgrade the computer system to deal with a complicated tax structure, the GOP says that the government should simplify the existing code. "We have as an objective ending the Internal Revenue Service as we know it," Newt Gingrich said in Congress Monday. Whether the reforms come at the margins or at the fundamental structural level of the tax code, the Speaker's objective may be realized.