January 06,2010

Grassley: Taxpayer Advocate on IRS Challenges With Social Benefit Programs Foreshadows Health Care Reform Administration

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

“The point of IRS restructuring and the creation of the taxpayer advocate’s officeitself, which I advocated as a member of the restructuring commission, was to restoretaxpayers’ rights after the IRS had engaged in heavy-handed enforcement tactics. I worrythat the IRS is reverting to some old habits to taxpayers’ detriment. The placement ofliens is up. I intend to look at this more closely, including how the taxpayer advocatearrived at her statistics. I know from my own work that the IRS continued to place lienson small businesses for a certain practice, even though the IRS and Congress agreed thepenalties were too harsh, and the IRS agreed to stop collecting them until Congressrevised the law. There was a disconnect between what Treasury and IRS staff inWashington, 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 inhelping big banks than working with small business owners and average taxpayers. Theplacement of liens on the little guys shouldn’t be automatic and computer-generatedwhile the big banks get the benefit of agency discretion and concern in the executiveoffices. One, it’s unfair, and two, it’s bad for the economy. Small businesses create 70percent of all net new jobs. Individual taxpayers want to pay off debts, including taxdebts. A payment plan might be more effective than a lien. The IRS has to use itsdiscretion to determine when liens are the best course to improve tax collection and whenthey’re just a knee-jerk enforcement tactic that will do more harm than good.”