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IRS Hearings to Focus on Alleged Improper Conduct

By Albert B. Crenshaw
Washington Post Staff Writer
Tuesday, April 28, 1998; Page A04

The Senate Finance Committee, hoping to keep alive the issue it so successfully raised last fall with testimony of taxpayer abuse, today opens four more days of hearings into the Internal Revenue Service, focusing on alleged improper conduct by criminal investigators, racial discrimination, favoritism and other agency management issues.

But even before the first witness steps in front of the panel, charges and countercharges have already begun to swirl.

Republicans yesterday sought to portray Democrats as protecting an outlaw agency and Democrats tried to show that Republicans are more interested in scoring political points than in genuine reform.

The latest fracas was prompted by the release by Democrats of a Treasury Department report that concluded that key accusations made by IRS agent Jennifer Long during last fall's hearings could not be substantiated.

Senate Majority Leader Trent Lott (R-Miss.) yesterday called the release of the report "an attempt to intimidate witnesses that we were planning on having this week."

Long testified that IRS officials had fabricated evidence to show that taxpayers owed more than they did, and that they targeted low-income taxpayers for audits.

Long said she stands by her testimony, and Lott said, "I believe Jennifer Long."

"It's dangerous, quite frankly, to come before the Finance Committee and tell the truth about what's happening at the IRS," Lott said.

Also yesterday, in a preemptive strike, the Treasury Department announced a seven-point plan to improve oversight of the IRS's Criminal Investigation Division.

The Washington Post last week reported that IRS criminal investigators sometimes raided and disrupted businesses on the unsubstantiated word of informants who turned out to be wrong and may have had ulterior motives.

The agency has reviewed its procedures internally and is satisfied with them, but a senior Treasury official said the new procedures, which include improved reporting of complaints, are needed to ensure that "concerns that have been raised are addressed publicly."

The new plan will guarantee "an absolutely objective and fair review of current procedures," the official said.

Finance Committee Chairman William V. Roth Jr. (R-Del.) said yesterday that he was "pleased that our investigation has already prompted action from the IRS toward improving the Criminal Investigation Division."

Roth said the committee will examine instances of armed CID raids on taxpayers "who are neither violent nor dangerous," and will look at possible racial discrimination in the agency, along with charges that agency workers are disciplined differently for committing the same offense. The panel also will examine "major compliance issues," he said.

"These are serious issues, not partisan politics," Roth said.

Clearly, though, both parties see the hearings as preliminary to larger political battles.

Democrats fear they will be tarred by association with an unpopular agency in the fall elections and that in the long run, the continuing assaults on the IRS will undercut voluntary compliance with tax laws.

The full House and the Senate Finance Committee already have approved bills to restructure the IRS.

The head of the IRS employees union, Robert M. Tobias, called the additional hearings "unnecessary overkill."

Some Republicans apparently hope to parlay voter dislike of the tax agency into support for an entirely new tax system, and in the meantime are finding bashing it a helpful campaign tool.

House Majority Leader Richard K. Armey (R-Tex.) and the National Republican Senatorial Committee say last fall's hearings boosted contributions.

"That tells us we're beginning to strike a chord," NRSC spokesman Mike Russell told the Associated Press.

"The issue of the IRS was a major part of the message, and we're happy with that response. And more importantly, this IRS is one issue that's going to stay with us around the election cycle."

© Copyright 1998 The Washington Post Company

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