CONGRESSIONAL WITNESSES Reid, Hon. Harry, a U.S. Senator from Nevada Fowler, Hon. Wyche, Jr., a U.S. Senator from Georgia Livingston, Hon. Bob, a U.S. Representative from Louisiana PUBLIC WITNESSES Bettencourt, Carol, Raleigh, NC, accompanied by Bob Kamman, counsel, Kamman, Bob, counsel for Carol Bettencourt, Phoenix, AR Coble, Larry, proprietor, Trophy Arts, Fort Worth, TX, and president, Na- Jones, Charlie, vice president-operations, accompanied by Laurie Conner, col- Shulman, Harvey J., general counsel, National Association of Computer Con- .............. TAXPAYER BILL OF RIGHTS 2 TUESDAY, DECEMBER 10, 1991 U.S. SENATE, SUBCOMMITTEE ON PRIVATE RETIREMENT PLANS AND COMMITTEE ON FINANCE, The hearing was convened, pursuant to notice, at 10:02 a.m., in Room SD-215, Dirksen Senate Office Building, Hon. David Pryor (chairman of the subcommittee) presiding. [The press release announcing the hearing follows:] [Press Release No. 53, Dec. 3, 1991] PRYOR CALLS HEARING ON TAXPAYER BILL OF RIGHTS 2, TAX FAIRNESS DEBATE SHOULD INCLUDE IRS FAIRNESS, SENATOR SAYS WASHINGTON, DC-Senator David Pryor, Chairman of the Senate Finance Subcommittee on Private Pension Plans and Oversight of the Internal Revenue Service, announced Tuesday a hearing on proposals to be included in the Taxpayer Bill of Rights 2 (T2). The hearing will be at 10 a.m. Tuesday, December 10, 1991 in Room SD-215 of the Dirksen Senate Office Building. Pryor (D-Arkansas) said the hearing will examine the taxpayer rights proposals that he outlined in a speech on the floor of the U.S. Senate on November 6, 1991. "As the debate heats up on how to achieve tax fairness for middle-income Americans, I believe the debate must also focus on whether middle-income Americans are treated fairly by the Internal Revenue Service," Pryor said. "The proposals contained in T2 will help the IRS achieve higher standards of accuracy, timeliness and fair play in providing taxpayer service. At the same time, these proposals do not diminish the power of the IRS—they simply make the IRS accountable for its actions," Pryor said. "The American taxpayer should not be required to pay the price for IRS mistakes and improper action," Pryor said. "Safeguards must be built into the law to protect the taxpayer against the potentially devastating effect of such mistakes and actions." OPENING STATEMENT OF HON. DAVID PRYOR, A U.S. SENATOR FROM ARKANSAS, CHAIRMAN OF THE SUBCOMMITTEE Senator PRYOR. Good morning, ladies and gentlemen. Our committee will come to order this morning. We welcome all of you here for this hearing on the Taxpayer Bill of Rights 2 that will be referred to as “T2”. Everyone here is very keenly aware that Congress is now holding hearings to discuss the fairness of our overall tax system toward middle income Americans. I believe an issue inseparable from this debate is whether the tax collector, the Internal Revenue Service, is treating middle income Americans fairly. Today's hearing is about fairness. It is about due process. It is about respect. And also, it is about accountability. We look to our (1) citizens to respect the system and the agency of government assigned the very difficult task of administering it. On the other hand, we also have a right to expect the men and women of the IRS to respect the taxpayer and to demonstrate that respect through courtesy, competence and certainly cooperation when necessary. The IRS is composed of 120,000 employees who are in the business of collecting the proper amount of tax. This, basically, is the mission of the Internal Revenue Service. In doing this, the IRS processes over 100 million tax returns; it collects over $1 trillion each year. In carrying out its mission, the IRS is going to make some mistakes and a few IRS employees are going to overstep their bounds. We saw this throughout the debate in 1987 and 1988 which resulted in the original Taxpayer Bill of Rights. Our tax law must reflect this reality by providing safeguards to protect the taxpayer from the potentially devastating affect of such mistakes and misdeeds. I submit that the cost of providing these safeguards is a normal cost of doing business, and the price of IRS mistakes and misdeeds should not be borne by an innocent, well-meaning, good faith tax payer. Almost 5 years ago I introduced the first Taxpayer Bill of Rights. That bill formed the basis of the Omnibus Taxpayer Bill of Rights which was enacted into law in 1988. Many times since then I have referred to that legislation as a "good first step." Last month I offered a list of proposals that will form the nucleus of the Taxpayer Bill of Rights 2. I believe these proposals are the logical next step. They build upon the foundation provided by the original Taxpayer Bill of Rights. T2's goal is to help the IRS achieve higher standards of accuracy, timeliness and due process in providing taxpayers service. We do not seek to diminish or increase the power of the Internal Revenue Service, but T2 will simply make the IRS more accountable for its actions. My purpose in introducing T2 in proposal form was to allow those persons interested in the administration of our tax laws the opportunity to study and comment on the proposals, also to offer their suggestions for this legislation. Today, as a part of this continuing process, we will hear from persons representing the interests of a broad spectrum of American taxpayers. Also, we will hear the General Accounting Office report on its findings from a study I requested on the IRS implementation of the original Taxpayer Bill of Rights. I would especially like to welcome Mr. Ramon Portillo, a house painter from El Paso, TX. He is here with his lawyer, David Leeper. They will explain Mr. Portillo's experience with the Internal Revenue Service, and a problem common to many, many taxpayers across our land today. The problem basically arose when Mr. Portillo received a Form 1099, which reported him receiving some $37,000 in income from a general contractor. However, Mr. Portillo claimed, and the contractor's records showed, that Mr. Portillo had received only $14,000 approximately. |