IRS chief agrees with Senate panel on need for reform Rossotti taking steps to address problems uncovered in hearings


WASHINGTON -- Internal Revenue Service Commissioner Charles O. Rossotti acknowledged yesterday that the tax collecting agency needs fundamental reform to improve accountability and prevent mistreatment of taxpayers.

But the new commissioner, appearing as the final witness in a blistering week of Senate hearings on IRS abuses, warned that change won't come overnight to an agency he described as stressed, barely coping with balky computers and hampered by a culture of secrecy.

"I think every American who heard the testimony would be disturbed, as I was," said Rossotti, a former computer industry executive who was named to head the IRS last fall. "We must change the conditions that lead to the kind of situations described by your witnesses. We have to have absolute respect for all taxpayers."

Finance Committee Chairman William V. Roth Jr. of Delaware said he began the hearings to uncover problems in the IRS, but he now hopes the disclosures will help Rossotti make changes.

"There is a second purpose to these oversight hearings, and that is to strengthen the hand of the commissioner in dealing with the IRS bureaucracy, a bureaucracy that in my judgment has been too long outside the control of any commissioner," said Roth, a Republican.

Reformers want to remake the IRS into a more open organization that stresses efficient taxpayer service and a willingness to resolve problems arising out of complicated tax laws.

The Senate is expected to take up an IRS reform bill next week, which, like a version approved by the House, would bolster taxpayer rights and create an independent board of directors to supervise the agency. But there are major differences in the details of the House and Senate bills.

Rossotti said he is taking steps to address problems uncovered by the hearings. These steps include:

* An independent investigation of the IRS inspection service, the agency's internal watchdog. Rossotti said progress reports have shown that a better job needs to be done investigating complaints about managers that fall short of outright criminal behavior.

* A separate outside review of the IRS criminal investigations branch, which was accused of using excessive force. Rossotti said he wants to improve overall supervision of the criminal division and create a new system for handling citizen complaints about investigators.

* An effort to clear up charges by academic researchers that the IRS uses hyped-up statistics to make its conviction rate seem better than it really is.

* Recruitment of new managers from outside the IRS.

Pub Date: 5/02/98

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