Editorial: Abuses, reforms in tax collection

Even those who legitimately pay the taxes they owe tremble at the thought of the IRS, which has had sweeping authority unparalleled in American government. Those on the receiving end of an IRS audit too often feel they have fewer rights than a defendant at a criminal trial.

Obviously, a federal tax collection agency is never going to be the most popular kid on the government block, but it still should do its job in a way that earns respect -- not instilling unnecessary fear.

It's hard to imagine a public agency more reviled than the IRS. The agency has had a history of browbeating taxpayers without any corresponding accountability to the public. There was no way the Senate could ignore recent testimony in congressional hearings that revealed horror story after horror story of taxpayer mistreatment at the hands of the IRS.

Some of the highlights of the legislation include:

(bullet) Innocent spouses, usually divorced women, would get new rights when faced with collection due to mistakes caused without their knowledge by their ex-spouses.

(bullet) The IRS, and not the taxpayer, has the burden of proof once a tax dispute goes to court. Taxpayers will still have to keep required records and cooperate with reasonable requests from the IRS.

(bullet) An independent appeals process will be set up for taxpayers.

(bullet) An oversight commission with private-sector representatives will be created. It will help police managers and develop long-range plans for the agency.

Nevada has been no stranger to some of the IRS abuses. For instance, it was revealed earlier this year that the IRS had engaged in audit quotas, targets that had been banned under the 1988 Taxpayers Bill of Rights, authored by Sen. Harry Reid. The Senate's legislation, which was sponsored originally by Reid and Sens. Bob Kerrey and Chuck Grassley, will build upon the protections afforded by the Taxpayers Bill of Rights.

During Senate debate last week, Reid had sought to eliminate a little-known IRS program that pays out rewards to informants who provide leads on tax cheats, saying it infringed on privacy. "It seems to encourage a Big Brother-like system where disgruntled neighbors, spouses and business partners are given a financial inducement by the federal government to turn in taxpayers," Reid said. The final Senate bill did not kill the program, but it did direct the Treasury Department to conduct a one-year study of it.

The Senate reforms, whose provisions must still be ironed out with a similar House bill, should help put taxpayers on an equal footing when dealing with the IRS. But the public should not lose sight that tax collectors will still need necessary tools to ensure that all taxpayers are paying their fair share.

While everyone agrees that the IRS needs to be reformed, let's not forget that it is just as important that Americans have faith that all people are paying their taxes. One of the keys to a respected tax code is the belief that everybody is paying their taxes equally, and aren't hiding sources of income.

In addition, for necessary government programs to be funded, government needs to collect taxes. The overwhelming majority of Nevadans understand they have a responsibility to pay the full amount of taxes they owe and are more than willing to pay their fair share.

But faith in the IRS is destroyed when taxpayers believe that the agency collecting these taxes is out to get them. It will take some time to restore trust, but this legislation should start the process of restoring the public's trust in the nation's tax-collecting agency.

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