January 06,2010

Press Contact:

Jill Kozeny, 202/224-1308

Jill Gerber, 202/ 224-6522

Grassley: IRS’ Increased Use of Liens Causes Concern

To:    Reporters and Editors

Fr:    Jill Gerber for Sen. Grassley, 202/224-6522

Re:    Taxpayer advocate report

Da:    Wednesday, Jan. 6, 2010

Sen. Chuck Grassley, ranking member of the Committee on Finance, with Senate jurisdiction over tax policy, today made the following comment on the national taxpayer advocate’s annual report to Congress.

“The point of IRS restructuring and the creation of the taxpayer advocate’s office itself, which I advocated as a member of the restructuring commission, was to restore taxpayers’ rights after the IRS had engaged in heavy-handed enforcement tactics. I worry that the IRS is reverting to some old habits to taxpayers’ detriment. The placement of liens is up. I intend to look at this more closely, including how the taxpayer advocate arrived at her statistics. I know from my own work that the IRS continued to place liens on small businesses for a certain practice, even though the IRS and Congress agreed the penalties were too harsh, and the IRS agreed to stop collecting them until Congress revised the law. There was a disconnect between what Treasury and IRS staff in Washington, D.C., thought was happening and what was actually happening in the field. There also seems to be more interest at the highest levels of Treasury and the IRS in helping big banks than working with small business owners and average taxpayers. The placement of liens on the little guys shouldn’t be automatic and computer-generated while the big banks get the benefit of agency discretion and concern in the executive offices. One, it’s unfair, and two, it’s bad for the economy. Small businesses create 70 percent of all net new jobs. Individual taxpayers want to pay off debts, including tax debts. A payment plan might be more effective than a lien. The IRS has to use its discretion to determine when liens are the best course to improve tax collection and when they’re just a knee-jerk enforcement tactic that will do more harm than good.”