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Under Pryor's Senate bill, the IRS would have to notify taxpayers of their rights in writing before they were audited or questioned. Citizens would have the right to sue for damages if the IRS made an unreasonable collection. And before seizing taxpayers' property, the IRS would first have to send out a written notice and then wait 30 days. Another reform in the bill would give new authority to the ombudsman within the IRS to issue "taxpayers' assistance orders." These could help prevent the IRS from collecting taxes in ways that create substantial hardships for taxpayers.
The legislation would bar the IRS from setting collection goals for agents or using the amount of money they bring in as a criterion for promotion. The IRS has an internal regulation prohibiting collection goals, but it is often ignored. On the door of an IRS office in Los Angeles, an agent told Congress, was taped a sign with the rallying cry: SEIZURE FEVER -- CATCH IT. The employee with the best seizure rate in the office was given extra time off as a reward.
IRS Commissioner Lawrence Gibbs admits to some problems with tax collection but opposes the bill on the ground that the agency can correct any abuses internally. He points out that some of the measures in the proposed law, like the call for clear publications listing taxpayers' rights, have already been adopted. Pryor praises Gibbs for his efforts but says internal reform of the IRS can go only so far: "Gibbs has the same problem as Gorbachev. He is fighting with his own entrenched bureaucracy that is reluctant to give up power."
Pryor's bill runs counter to congressional efforts in recent years to strengthen tax collection. Faced with a huge federal deficit, Congress since 1981 has passed five laws that have increased penalties for tax evasion and given new enforcement powers to the IRS. Pryor contends that the tax collectors now have too much of an advantage. "It's time to give taxpayers some rights to even the playing field," he declares. Some form of his bill is expected to pass the Senate, but comparable legislation in the House has not yet garnered the support it needs from Illinois Democrat Dan Rostenkowski, who chairs the Ways and Means Committee. Rostenkowski is afraid that a taxpayers' rights bill would cost the Government as much as $200 million a year -- although that amounts to little more than one-tenth of 1% of the annual deficit. Pryor hopes to convince Rostenkowski that just the opposite will happen. Says the Senator: "When people respect their tax system, revenues go up."