WASHINGTON, D.C. – Senator Susan Collins has introduced legislation that would require the IRS Oversight Board to better fulfill its obligation to protect the Constitutional rights of American taxpayers.
The Taxpayer Protection Act of 2014 would require the Oversight Board, which is an existing, independent body that provides the IRS with long-term guidance and direction, to annually report to Congress on:
• Allegations of abuse of taxpayers’ Constitutional rights,
• The number of employees terminated for such violations,
• Why employees against whom allegations were raised were not terminated, and
• The effectiveness of the internal controls, if any, that the IRS has put into place to prevent targeting.
Below is the text of Senator Collins’ remarks introducing the bill on the Senate floor:
Mr. President, I rise to introduce the Taxpayer Protection Act of 2014. This bill would require the independent IRS Oversight Board to better fulfill its obligation to protect the Constitutional rights of American taxpayers.
The history of the IRS offers abundant examples of the agency trampling on these rights. In the most recent controversy, the IRS subjected applications by conservative groups for tax-exempt status to heightened scrutiny. Delaying these groups’ applications suggests an effort to chill the Constitutional rights of speech and association by groups that hold conservative views.
The details that have emerged are alarming. The IRS has admitted that it deliberately targeted conservative groups' applications for tax-exempt status for extra review if they had words such as "Tea Party," "Patriots," or "9/12" in their names; if they criticized how the country is being run; or if their purpose is to address government spending, government debt, taxes, or to make America a better place to live.
These inappropriate criteria stayed in place for more than 18 months, and resulted in substantial delays in processing many groups' applications. In some cases, applications remained outstanding for more than two years.
The IRS also sought to compel some of these targeted groups to divulge their membership lists. IRS officials have admitted that there was absolutely no reason for the agency to have sought this type of information.
Such behavior, unfortunately, is not a one-time aberration. A May 2013 Time magazine article notes that IRS has been involved in scandals going back as least as far as the Kennedy Administration, which used the Service to investigate so-called “right wing” groups. President Nixon employed a secret IRS operation to investigate and audit political opponents. During the Johnson Administration, the IRS targeted anti-war activists. In the decades since, civil-rights groups, political activists from both the conservative and liberal ends of the spectrum, and whistleblowers have been subjected to intimidating and discriminatory scrutiny by the IRS.
In 1997, the Senate Finance Committee held three days of hearings that were instigated by reports of IRS abuses. One type of abuse was the so-called “Blue Sky Assessment,” which then Committee Chairman William Roth characterized as agents making tax assessments that had no basis in fact or law, and were, in some instances, simply levied to hurt the taxpayer. Some witnesses had to have their identities concealed out of fear of retaliation for their testimony. As “Witness Number One” – an IRS agent – stated, “. . . abuse of the taxpaying public occurs when the IRS improperly and sometimes illegally uses its vast power in the process of implementing some type of enforcement of the tax laws.”
I note the 1997 hearings in particular because they coincided with an effort to reform the IRS, culminating in the IRS Restructuring and Reform Act. The Act made a number of changes to the structure of the IRS and the manner in which it administers the tax laws. One such change was the creation of the IRS Oversight Board. By law, the Board is charged with ensuring that taxpayers are treated properly by the IRS, and is designed to be independent of the agency. Of the required nine members, seven must be Senate-confirmed appointees who have professional experience or expertise in business and tax administration. The IRS Reform Act also requires that IRS employees be terminated for violating the Constitutional rights of taxpayers.
The current IRS scandal was, however, not brought to light by the IRS Oversight Board. These abuses came to the public’s attention through a May 2013 report by the Treasury Inspector General for Tax Administration (TIGTA). Following the release of TIGTA’s report, the Board released a statement saying that it would work with the IRS and TIGTA, among others, to meet its statutory responsibility to protect taxpayers. I believe that the Board should do much more, and my bill strengthens its oversight role.
My bill would ensure that the existing laws, which are rooted in the response to a prior IRS scandal, work as they should. It would require the IRS Oversight Board to report to Congress annually on allegations of abuse of taxpayers’ Constitutional rights; the number of employees terminated for such violations; why employees against whom allegations were raised were not terminated; and the effectiveness of the internal controls, if any, that the IRS has put into place to prevent the unfair targeting of taxpayers.
The IRS’s history of abuses demonstrate that Congress must be ever-vigilant in protecting taxpayers. The agency’s power allows it to pervade the most sensitive aspects of Americans’ private lives. Irrespective of whether those singled out are liberal or conservative, Republican or Democrat, Independent or Green Party members, the targeting of private citizens for exercising their First Amendment rights is way out of bounds, illegal behavior, and cannot be tolerated.
It has been said that the power to tax is the power to destroy. The American people cannot and will not tolerate any abuse of that power.
I urge my colleagues to pass this bill to protect the most fundamental rights guaranteed by our Constitution against the abuse of the authority to tax.