Toward an IRS for the twenty-first century.

• Author: Summers, Lawrence
• Position: Deputy Treasury Secretary Lawrence Summers

On March 17, 1997, Lawrence Summers, Deputy Secretary of the Treasury, addressed the Midyear Conference of Tax Executives Institute in Washington, D.C. Mr. Summers chose the occasion to present publicly for the first time the Treasury Department's five-point plan to correct problems at the Internal Revenue Service. The text of his remarks follows.

Good morning. Thank you for that kind introduction. It is an honor to be here among tax professionals to discuss the vital question of improving the way in which the IRS collects our nation's taxes.

Nobody likes to pay taxes, but, as Oliver Wendell Holmes once said, they are the price we pay for civilized society. They have been at the center of our nation's greatest debates from Revolutionary times to today. They fund our armed forces, our children's education, and our parents' health care, and they finance advances in science and technology that benefit us all.

Collecting taxes has always posed a difficult challenge. Because of the nature of the work they do, tax collectors will never win popularity contests. Recently, announcements we have made about continuing problems in computer systems have focused attention on the Internal Revenue Service. Continuing improvements in the service provided by banks, brokers, credit card companies, and other users of information technology bring even more sharply into focus the IRS's problems with customer service. At Treasury and the IRS we recognize that the IRS could do much better at providing the kind of cost-effective, high quality service that the American people deserve.

We have, I believe, reached an important turning point. Over the last year, the Treasury Department has focused intense efforts on improving the IRS. The National Commission on Restructuring the IRS, led by Senator Bob Kerrey and Congressman Rob Portman, has already made a significant contribution to the ongoing discussion. A consensus has emerged among a wide group of stakeholders, from business executives to Members of Congress to leaders of the National Treasury Employees Union. The message is clear: it is time for change.

I believe that in the next year or so we have the opportunity and the obligation to bring about the most far-reaching changes in the way the IRS is managed and in the way it does its business in decades. The IRS needs to be more responsive to taxpayers, to use technology more effectively, and to be more efficient. However you feel about structural tax reform, I suspect that most of you share my conviction that for the foreseeable future, the United States will have an income tax that taxes people based on their ability to pay. Given this, it is not possible to eliminate the IRS, and it is vital that we have an IRS that functions effectively. We must all work constructively towards this end. What we must not do is attack the IRS in order to promote other agendas.

It will be the task of management at the IRS to manage information technology better and to harness it toward the goal of better customer service. What I would like to provide today is the Treasury Department's view of how to establish...