IRS Chief Pledges Action

On the third day of hearings into allegations that the IRS mistreated taxpayers, acting IRS Commissioner Michael Dolan pledged Thursday to put pressure on IRS division chiefs and managers to ensure that the agency treats taxpayers fairly.

Dolan told the Senate Finance Committee he would order hundreds of district directors and senior collections officials to Washington within 30 days to review allegations the committee heard about taxpayer abuse. He also said he expected each division in which taxpayer abuse had been identified to review those cases and root out the causes of the abuse.

"We must immediately take specific actions to prevent the recurrence of these kind of circumstances," Dolan said, referring to testimony by aggrieved taxpayers on the second day of hearings.

Former and current IRS employees testified that IRS agents who collect delinquent taxes are pressured to use unfair and even illegal tactics to collect as much money as possible. Field offices are rated on a "performance index" that includes a ranking of the offices based on how much money they collect. While it is illegal for managers to evaluate their agents on how much they collect individually, employees said the performance index pressures managers to push agents for more and more revenue, leading to cases of taxpayer abuse. Dolan said he has eliminated the performance index.

In addition, Dolan said he will order division directors to hold new monthly "problem solving days," in which taxpayers will be able to meet with them to air problems.

Chairman William Roth, R-Del., asked Dolan to promise that employees who testified as whistleblowers would not be retaliated against.

"Unequivocally, I will give you that assurance," Dolan said.

While Dolan apologized for the cases of taxpayer abuse the hearings revealed, he said they are rare.

"These hearings have to be placed in the context of the millions of successful taxpayer interactions that IRS has each year," Dolan said.

In a statement, Robert Tobias, President of the National Treasury Employees Union, said he was concerned that Congress is using the hearings to bash the IRS, rather than review solutions to the agency's problems. Tobias said IRS employees "report a direct increase in hostility from taxpayers in direct proportion to the political attacks on the agency."

Former IRS Commissioner Mortimer Caplin told PBS's NewsHour Wednesday that top IRS management cannot be blamed for a few cases of abuse.

"This is not a policy. You're bound to find some bad apples in the barrel," Caplin said.

Dolan said a group of IRS employees has been meeting with the National Performance Review and the Treasury Department to come up with a customer service improvement plan. The group will present their plan next month. Dolan also said he will write to every IRS employee to remind them of the procedures they must follow to help taxpayers who feel threatened or abused by the agency.

This fall, Congress will take up two opposing plans for restructuring the IRS. The administration's plan calls for an advisory board of senior federal officials to oversee IRS reform. The National Commission on Restructuring the IRS, a congressional panel, issued a plan earlier this year calling for an oversight board with representatives from the private sector, the National Treasury Employees Union and the Treasury Department. Both plans have been introduced as legislative packages.

This story is based partially on a report in CongressDaily.

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