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TIME: Almanac 1995
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<text id=90TT0336>
<title>
Feb. 05, 1990: The Tax Collector Gets Audited
</title>
<history>
TIME--The Weekly Newsmagazine--1990
Feb. 05, 1990 Mandela:Free At Last?
</history>
<article>
<source>Time Magazine</source>
<hdr>
BOOKS, Page 67
The Tax Collector Gets Audited
</hdr>
<body>
<p>By R.Z. Sheppard
</p>
<qt> <l>A LAW UNTO ITSELF: POWER, POLITICS, AND THE IRS</l>
<l>by David Burnham</l>
<l>Random House; 419 pages; $22.50</l>
</qt>
<p> In the late 1950s, the literary critic and historian Edmund
Wilson found himself in trouble with the Internal Revenue
Service. Preoccupied with big ideas and momentous events,
scraping by on stipends and feeling generally Olympian, he had
neglected to file income tax returns between 1946 and 1955. The
distinguished delinquent eventually paid up, but to settle the
score he wrote The Cold War and the Income Tax, a 118-page
pained yawp that argued there was not much difference between
the IRS and the KGB. "The truth," wrote Wilson in 1963, "is
that the people of the United States are at the present time
dominated and driven by two kinds of officially propagated
fear: fear of the Soviet Union and fear of the income tax."
</p>
<p> Wilson was a forceful man of letters, not numbers. That may
explain why the only Wilsons in David Burnham's blistering
critique of the Internal Revenue Service are "James," a Supreme
Court Justice who in 1794 rendered the decision that allowed
President Washington to put down an armed tax revolt by
Appalachian moonshiners; "Frank," an IRS investigator who
helped nail Al Capone; and "Bob," a Republican Congressman tied
to a tax ruling for ITT during the Nixon Administration.
Nonetheless, Edmund remains half-right. Nightmares about the
Soviets may have receded, but Americans have yet to lose their
fear of filing.
</p>
<p> With justification. Burnham, a veteran investigative
reporter and author (The Rise of the Computer State), suggests
that the IRS frequently uses its extraordinary powers of
coercion in a presumptuous and reckless manner. He illustrates
the charge with numerous cases, a few obviously selected for
comic relief: the New York teenager, for example, who
questioned the constitutionality of the income tax in a letter
published in the Buffalo Courier-Express. Suspecting criminal
noncompliance, 15 agents tailed the boy for four days,
discovering that he talked to his mailman, ate pizza and read
pornographic magazines. True, he never filed a tax form, but,
then, he was still a dependent with no income.
</p>
<p> That the IRS is another flawed bureaucracy is no surprise.
When accountants find time for lunch they speak of little else.
Whiffs of scandal occasionally become gusts, like a former IRS
assistant commissioner who could not adequately explain why he
charged the agency for airfare to visit his girlfriend.
Burnham's audit includes abuses and inefficiencies that date
back more than 50 years. Recent probes by the General Accounting
Office have discovered broad areas of error and mismanagement.
A study covering 1987, notes Burnham, concluded that the IRS
failed to keep orderly accounts of its $1 trillion annual
collections. For the same year, the GAO found that nearly half
its samplings of 6 million notices and letters that the service
sent to taxpayers were "incorrect, unresponsive, unclear or
incomplete."
</p>
<p> There are worse transgressions. Burnham cites cases of
illegal IRS wiretapping, a bias against liberals and a frequent
blind eye turned to its own regulations. Two years ago, the
House Commerce, Consumer and Monetary Affairs subcommittee
convened hearings on IRS procedures. Two weeks ago, the service
announced a new ethics plan.
</p>
<p> Burnham would prefer new blood; senior-level officials, he
notes, nearly always have at least 20 years of service and have
become locked into bad habits. "They have known about the
mistakes for a very long time. And having spent their entire
adult lives working in IRS offices and going to IRS parties and
traveling with IRS partners to IRS meetings, they could be
forgiven for thinking that they knew best." What they continue
to know for sure is that they raise the money that runs the
country, and that without a certain fear factor the system
euphemistically known as "voluntary compliance" would not work.
</p>
<p> Burnham's analysis is preoccupied with the power of an
insular agency operating outside the usual system of checks and
balances. Yet would tax collecting be less feared or more fair
if the Legislative Branch took a greater role in running the
IRS? It was Congress, after all, that created the so-called Tax
Reform Act of 1986, a document so complex and contradictory
that, Burnham says, it repeatedly stumped a convocation of some
of the country's best tax lawyers and accountants. Part of the
reason was that the ink from the Government's laser printers
had hardly set when special interests were ordering tailor-made
loopholes from their favorite legislators. Burnham does not
delve into tax regulations--the main source of unfairness--but then he is only a reporter, not a masochist.
</p>
<p> Unfortunately for the IRS, A Law unto Itself appears about
the same time that taxpayers are receiving their forms for
1989. Will Burnham's form this year be the only piece of
official IRS mail he finds in his box? He tells us that nearly
everyone he interviewed said, at one point in their
conversation, "I sure hope you have a good accountant."
</p>
</body>
</article>
</text>