House Ways and Means Chairman Archer today will unveil a bill to restructure and reform the IRS, setting the stage for a showdown with the Clinton administration over how to make the nation's tax collection agency work more effectively and in a less confrontational manner.
For the most part, the bill embraces the recommendations of a national commission co-chaired by Rep. Rob Portman, R-Ohio, and Sen. Robert Kerrey, D-Neb., who introduced the bill upon which Archer's mark is based. The Portman-Kerrey bill has enough bipartisan support that an override of President Clinton's possible veto of Archer's bill could be in the works, according to Archer's spokesman.
In the bill to be marked up Wednesday, Archer will propose 24 new items for a so-called Taxpayers Bill of Rights, a new board of directors composed of mostly private sector experts and a shift in the burden of proof to the IRS in liability disputes.
The composition and independence of the board of directors has been a contentious matter for several weeks. Treasury Secretary Rubin and other senior administration officials have rejected the Portman-Kerrey bill's outline for a board outside of Treasury. Rubin and others also have argued that the board of an agency with such vast powers over the personal financial lives of Americans should be maintained as a government entity with greater accountability to the public. But Archer and Portman, along with many Democrats, have argued that a more radical change is needed.
They envision a more independent body that would be made up not only of individuals within the government but also of experts from academia and business.
The only change Archer's bill would make from the Portman- Kerrey bill is to provide the president with the authority to appoint the chairman of the new IRS board.
This change could help secure even more support among Democrats, which could leave the administration increasingly isolated on the issue.
Along that line, an aide to House Minority Leader Richard Gephardt, R-Mo., told the Associated Press late Monday that Gephardt "is very likely" to endorse the Kerrey-Portman proposal to revamp the IRS rather than the legislation championed by the administration.
Gephardt was expected to announce his support for the bill at a news conference today after he has reviewed the latest revision of the measure, as contained in Archer's markup vehicle.
Gephardt decided to back the bill after its sponsors agreed to let the president retain the power to hire and fire the IRS commissioner, the aide said. An earlier version would have stripped the president of such powers and given that ability to the new board.
Meanwhile, another area where the administration could find itself at odds with many members of Congress is a proposal to shift the burden of proof from the taxpayer to the IRS in disputes on tax liability.
The administration had warned that putting the burden of proving taxpayers' noncompliance or evasion squarely with the IRS would mean more intrusive and labor-intensive activities by agents, as taxpayers would be able to stonewall the IRS.
But Archer contends that once the taxpayer has provided documentation needed for a complete evaluation, the burden of proving indiscretion from those records would belong to the IRS.
For example, if the IRS were to argue that a painting's value is $20,000, and the taxpayer listed its valued at $10,000, the IRS would have to prove the taxpayer wrong.
Archer is hopeful scenarios like this would have a "chilling effect" on IRS actions against taxpayers, his spokesman said.
In the last two weeks, the administration has moved in the direction of the Portman-Kerrey bill.
In the aftermath of a series of scathing hearings about IRS practices, the administration proposed its own "bill of rights," calling for the creation of 33 citizen review boards to hear citizen complaints and suggestions and modified its own proposal for the board of directors.
House Speaker Gingrich has promised to bring the IRS reform bill to be marked up by the Ways and Means panel to the floor before adjournment next month. But Senate action is unlikely this year.
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