Panel Suggests IRS Revamp

After an unprecedented study of the inner workings of the IRS, a congressional commission recommended Thursday that a seven-member panel replace the Treasury Department as the governing body of the IRS.

The National Commission on Restructuring the IRS approved the list of reforms, which includes ways to simplify the tax code and better coordinate congressional oversight of the agency, on a 12-5 bipartisan vote.

"Every single household is affected by the IRS," Sen. Bob Kerrey, D-Neb., co-chairman of the commission, told reporters. "That's why we must improve its operating efficiency."

Under the proposal, the IRS would be put under the control of a seven-member board of directors. The board would include the Secretary of the Treasury, a National Treasury Employees Union representative and five private-sector appointees. The board's members would be appointed by the President and approved by the Senate. Each representative would serve a five year term.

The board's responsibilities would include hiring the IRS commissioner, approving the agency's budget and designing long-term modernization plans.

The commission's proposal includes "major taxpayer reforms," said Sen. Chuck Grassley, R-Iowa, a member of the panel. "We are going to get it immediately put into statutory language, and we're going to get it passed very quickly."

National Treasury Employees Union President Robert Tobias expressed his approval of the proposal.

"Restoring credibility is essential," Tobias said. "Essential for securing the funding and resources IRS employees need to improve the services and assistance provided to American taxpayers."

But top Treasury officials weren't as pleased. Deputy Treasury Secretary Lawrence H. Summers characterized it as "dangerously flawed."

"These proposals pose an unacceptable risk to our nation's revenue stream," Summers said in a speech this week. "We cannot afford to experiment with responsibility, nor place it under the jurisdiction of part-time managers." The committee's recommendations will be formally released later this month.