Senate approves IRS reform bill

The Senate today approved a sweeping IRS restructuring package by a 96-2 vote, sending the bill to President Clinton's desk for his signature.

Clinton has said he will sign the bill, which the House overwhelmingly approved on June 25.

The bill would create an independent oversight board and require the IRS commissioner to restructure the agency, revamp its personnel system and focus employees on customer service.

Specifically, the bill would:

• Create an independent oversight board of six private sector members with managerial expertise, along with the Treasury Secretary, the IRS commissioner and an employee union representative. The board would approve strategic and organizational plans for the IRS, as well as review executive appointments.
• Give the IRS commissioner authority to hire up to 40 executives outside of normal rules governing political and executive appointments. The commissioner can also grant executives bonuses above 20 percent of base pay, which is the statutory cap for federal executives.
• Permit the IRS chief to establish a personnel demonstration project, a broad-band pay system, new performance standards and cash award programs for employees. The act prohibits IRS managers from measuring employees' performance based on tax enforcement results or production quotas or goals.
• Deny IRS employees the right to protest denials of within-grade increases to the Merit Systems Protection Board.
• Grant the IRS the authority to offer employee buyouts through Jan. 1, 2003.
• Require the agency to restate its mission statement to "place a greater emphasis on serving the public and meeting taxpayer needs."
• Make the IRS include an employee's name and telephone number on all correspondence with taxpayers. IRS representatives will have to give their name when speaking with taxpayers over the phone.
• Support IRS Commissioner Charles Rossotti's plan to restructure the agency into customer lines and reorganize its system of national, regional and district offices.