Comments on the report of National Commission on Restructuring the Internal Revenue Service.

• Author: Murray, James R.
• Position: Tax Executives Institute's comments of June 25, 1997

On June 25, 1997, the National Commission on Restructuring the Internal Revenue Service issued its final report, including recommendations relating to, among other things, whether the Commissioner of Internal Revenue should be appointed for a fixed term, streamlining congressional oversight, establishing an independent Board of Directors to provide effective Executive Branch oversight, providing the IRS with a stable budget, enhancing taxpayer protections, and promoting tax simplification. The Commission's report prompted the following response by Tax Executives Institute's International President, James R. Murray.

Tax Executives Institute commends the National Commission on Restructuring the Internal Revenue Service and its dedicated staff for their extraordinary efforts in identifying issues of concern, in seeking out the views of interested parties, and in developing proposed solutions. TEI is pleased that the Commission recognizes that there is no single solution to what ails the IRS. What is needed -- and what the Commission's report confirms is needed -- is a balanced, integrated approach. One change -- say, the appointment of an independent board of directors -- will not transform the agency unless it is effectively coupled with others (including coordinated and streamlined oversight, stronger leadership by the Commissioner and senior IRS management, an increased focus on customer service, and a meaningful restatement of balanced performance measures). Indeed, one of TEI's concerns is that the establishment of an independent board of directors not become merely the insertion of yet another layer of bureaucracy into the IRS; by itself, the board will not make the agency more responsive. In tandem with other changes, however, enhanced executive branch oversight of the IRS can contribute to a tax system that properly focuses on customer service without minimizing the importance of voluntary compliance.

From this point forward, the focus should be on the future -- on clearly defining expectations, on streamlining and strengthening oversight of the agency, and on providing the IRS with sufficient (and stable) budget resources to modernize its systems, to serve the public, and to ensure compliance with the tax laws. To the extent that we have a criticism of the report, it is that its language sometimes "plays to the gallery" and is unnecessarily critical of the Internal Revenue Service and its personnel. As TEI testified before the...