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'Outraged' Clinton Vows IRS Overhaul

By John F. Harris
Washington Post Staff Writer
Sunday, May 3, 1998; Page A01

PALO ALTO, Calif., May 2—Calling himself "outraged" by the latest reports of abusive tax agents, President Clinton today pledged new efforts to overhaul the Internal Revenue Service and tame what he said has "seemed to be an unaccountable, downright tone-deaf agency."

Using uncommonly derisive language against an agency run by his own administration, Clinton showed in his weekly radio address that he is determined not to be outdone by Republicans in voicing scorn for out-of-bounds tax collectors. While touting actions the administration has taken on its own to improve IRS service, Clinton reiterated his support for legislation that, among other provisions, would establish an oversight board composed largely of private citizens to set policy and goals for the IRS.

Clinton and Treasury Secretary Robert E. Rubin once opposed such a measure, but they reversed course last fall as the proposal gained what seemed to be irreversible political momentum in both parties. Today, Clinton asserted that the only obstacle to a major revamping of the IRS is to work out the differences between what he called "very similar" bills in the House and Senate.

"I call on Congress to make this year the year we set aside political differences to enact real reforms of the IRS," said Clinton, who is in California this weekend visiting his daughter, Chelsea. "When it comes to quality service at the IRS, Congress can't afford to file for an extension."

Beginning last year, congressional proponents of overhauling the IRS marshaled enormous public support for their ideas by presenting testimony from apparently law-abiding citizens who came to grief at the hands of abusive agents. Republicans on the Senate Finance Committee heard a new collection of horror stories earlier this week, before voting 20 to 0 for an IRS overhaul.

In the Republican response to Clinton's address, Sen. Charles E. Grassley (Iowa) invoked one of those stories. The experience of John Colaprete, who slipped into depression after his Virginia Beach restaurant and home were raided by armed agents even though he was never charged with wrongdoing, showed the IRS is "simply out of control," Grassley said.

"There is no accountability," he added, "and when there is no accountability, IRS agents can continue to abuse taxpayer rights and get away with it."

With major changes in the way the IRS does business now nearly inevitable, the main battle is over the distribution of political credit. Grassley noted that, after years of complaints about IRS behavior, "this Republican Congress finally broke through and performed outstanding oversight of the IRS."

But Clinton noted that, a year ago, the "reinventing government" initiative led by Vice President Gore began a broad IRS review and the administration has already implemented such changes as longer hours for IRS customer hot lines and "citizen advocacy panels" to hear taxpayer disputes.

Even if some Democratic officials in Congress and the administration privately accuse Republicans of exaggerating IRS problems for political advantage, few have been willing to offer a public defense, lest they appear sympathetic to an agency that polls say is widely disdained.

Robert Tobias, president of the National Treasury Employees Union, said the IRS already has begun to change and called Clinton's blast unfair. "I was disap pointed in the president's rhetoric," said Tobias, adding that the recent hearings reflected "what the IRS was, not what it is or what it is seeking to become."

Donald Kettl, a University of Wisconsin professor who studies public administration, said that because Republicans have had such success with the IRS issue, Clinton was using "me-too language" designed to help Democrats "put this behind them as soon as possible."

The House passed an IRS overhaul measure last year that would create an 11-member oversight board, give the agency new flexibility in personnel matters, accelerate electronic filing, strengthen the Office of Taxpayer Advocate and shift the burden of proof in disputes to the agency.

The Senate bill is similar, but, at an estimated cost of $20 billion, it is far more expensive, in large measure because it would ease penalties and interest now assessed against people who owe back taxes. The Senate, too, creates an oversight board, but its version would not give a seat to the treasury secretary or a representative of the IRS employees' union. A White House official said today the administration wants the bill that eventually reaches Clinton to be closer to the House version.

At a Democratic National Committee fund-raiser here Friday night, Clinton gave his most extensive explanation to date about why he opposes Proposition 227, which, if passed in June, would sharply scale back California's extensive bilingual education program for immigrant children. Clinton said he is "very sympathetic with the impulse that put this initiative on the ballot, but I think it's the wrong answer."

Proponents say students suffer by spending several years studying in their native tongues while learning English on the side and instead propose a one-year English immersion program. But Clinton said it may not be "intellectually possible for every child of every age, no matter what age they are when they come in this country and what their language is," to prosper academically under such a brief program.

© Copyright 1998 The Washington Post Company

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