Battle for IRS Oversight Begins

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A top Treasury Department official said on Tuesday that a proposal to put a panel of private sector managers in charge of the IRS was "dangerously flawed."

In an address before the American Institute of Certified Public Accountants, Deputy Treasury Secretary Lawrence Summers said the government should not turn over control of its revenue stream to the private sector.

"We cannot afford to experiment with responsibility, nor place it under the jurisdiction of part-time managers," Summers said.

Tomorrow the National Commission on Restructuring the Internal Revenue Service, a panel appointed by Congress to recommend a new management structure for the IRS, will vote on a proposal to create a seven-member oversight board for the struggling agency. Five of the members would be private sector managers and two would be Treasury Department officials, said Lisa McHenry, a spokeswoman for the commission.

McHenry said the commission was surprised that Summers would blast the proposal for using "part-time managers" for overseeing the IRS, because neither he nor Treasury Secretary Robert Rubin work full time on IRS oversight.

Summers also voiced concern that the commission's plan would take control over the IRS away from the executive branch.

"Separating the IRS from direct executive branch control would undermine accountability," Summer said. He also argued against separating the IRS from Treasury.

McHenry said the oversight panel would not be independent of Treasury since two of its members would be Treasury officials. But the panel would "be given a good amount of authority," she said.

Two weeks ago, Vice President Al Gore and Rubin unveiled a plan to reform the IRS that would be led by IRS employees and managers and other government officials. Under Gore and Rubin's plan, an IRS oversight board would include officials from Treasury, the National Performance Review, the Office of Management and Budget and the Office of Personnel Management. A private sector panel would be given an advisory role.

"We don't need to, and should not, turn the IRS over to a board of outsiders," Gore said. "We need to fix it."

McHenry said the administration's plan to put additional government officials in charge of the IRS would not improve its operations.

On Wednesday, the Associated Press reported that the Clinton administration may be leaning toward a technology professional, rather than a tax expert, to be the next IRS commissioner. Charles O. Rossotti, chairman of American Management Systems Inc. in Fairfax, is the likely nominee to head the IRS. He would replace Margaret Milner Richardson, who resigned last month. Since then, Michael Dolan, a career IRS official, has been acting commissioner.

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