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Hearing held on April 15, 1999

Statement of:

Hoff Hay, Sydney, Phoenix, AZ; Kaye Whitehead, farmer, Muncie, IN;

William N. Lindsay, president, Benefit Management & Design, Inc.,

Denver, CO; John Nicholson, owner, Company Flowers, Arlington, VA ..

Reed, Anne F. Thomson, Chief Information Officer, Department of Agri-

culture, accompanied by Keith Kelly, Administrator, Farm Service

Agency

Rossotti, Charles O., Commissioner, Internal Revenue Service

Stevens, Nye, Director, Federal Management and Workforce Issues, Gen-

eral Accounting Office; Deidre A. Lee, Acting Deputy Director for Man-

agement, Office of Management and Budget; and James R. White,

Director, Tax Policy and Administration Issues, General Accounting

Office

Letters, statements, etc., submitted for the record by:

Hoff Hay, Sydney, Phoenix, AZ, prepared statement of

Horn, Hon. Stephen, a Representative in Congress from the State of

California, prepared statement of .

Kelly, Keith, Administrator, Farm Service Agency, prepared statement

of

Kucinich, Hon. Dennis J., a Representative in Congress from the State

of Ohio, prepared statement of

Lee, Deidre A., Acting Deputy Director for Management, Office of Man-

agement and Budget:

Information concerning increased staffing

Information concerning the IRS oversight board

Information concerning recommendations

Prepared statement of

Lindsay, William N., president, Benefit Management & Design, Inc.,

Denver, CO, prepared statement of

McIntosh, Hon. David M., a Representative in Congress from the State

of Indiana:

List of paperwork required for a new hire

Prepared statement of

Nicholson, John, owner, Company Flowers, Arlington, VA, prepared state-

ment of

Reed, Anne F. Thomson, Chief Information Officer, Department of Agri-

culture:

Information concerning expiration of existing collections

Information concerning management plans

Prepared statement of

Rossotti, Charles O., Commissioner, Internal Revenue Service:

Information concerning section 482

Information concerning tax filing requirements

Prepared statement of

Stevens, Nye, Director, Federal Management and Workforce Issues, Gen-

eral Accounting Office, prepared statement of

Turner, Hon. Jim, a Representative in Congress from the State of Texas,

prepared statement of

White, James R., Director, Tax Policy and Administration Issues, General

Accounting Office, prepared statement of
Whitehead, Kaye, farmer, Muncie, IN, prepared statement of

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(V)

CLINTON-GORE V. THE AMERICAN TAXPAYER

THURSDAY, APRIL 15, 1999

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON NA

TIONAL ECONOMIC GROWTH, NATURAL RESOURCES, AND
REGULATORY AFFAIRS, JOINT WITH THE SUBCOMMITTEE
ON GOVERNMENT MANAGEMENT, INFORMATION, AND
TECHNOLOGY, COMMITTEE ON GOVERNMENT REFORM,

Washington, DC. The subcommittees met, pursuant to notice, at 2 p.m., in room 2154, Rayburn House Office Building, Hon. David M. McIntosh (chairman of the subcommittee on National Economic Growth, Natural Resources, and Regulatory Affairs) and Hon. Stephen Horn (chairman of the Subcommittee on Government Management, Information, and Technology) presiding.

Present: Representatives McIntosh, Horn, Ryan, Terry, Ose, and Kucinich.

Staff present: Marlo Lewis, staff director; Barbara Kahlow, professional staff member; Jason Hopfer, chief counsel; Luke Messer, counsel; Andrew Wilder, clerk; J. Russell George, staff director and chief counsel; Bonnie Heald, director of communications, professional staff member; Mason Alinger, clerk; Elizabeth Mundinger and Faith Weiss, minority counsels; and Earley Green, minority staff assistant.

Mr. HORN. The joint meeting of the hearing of the House Subcommittee on Government Management, Information, and Technology and the Subcommittee on National Economic Growth, National Resources, and Regulatory Affairs will come to order. April 15 is tax day for all Americans. It is the day the Internal Revenue Service holds individuals accountable for the accurate reporting of their tax liability.

It is fitting that today we hold the IRS accountable as well. In the past years, the Subcommittee on Government Management, Information, and Technology has held similar hearings and heard reports of management problems at the Internal Revenue Service.

Last year on this date, we heard from the newly appointed Commissioner of the Internal Revenue Service, Mr. Charles Rossotti. He outlined for us his priorities for restructuring and refocusing the IRS. Commissioner Rossotti spoke as follows: “Shifting entire focus of the agency from one which focuses solely on conducting our own internal operations to one which puts far more emphasis on trying to see things from the point of view of the taxpayers and emphasizing service and fairness to taxpayers."

A few months after that testimony, on July 22, 1998, the IRS Restructuring and Reform Act of 1998 was signed into law. The un

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derlying theme of the act is one of creating a cultural change within the IRS. In the broadest terms, the act shifts the emphasis on the IRS from its defined role of an enforcement agency, to a role that resembles more closely a financial service organization.

The initiatives presented by the Commissioner last April 15 and the broad array of provisions in the IRS Restructuring and Reform Act seem to go hand and hand. One year has passed since we heard from the Commissioner, and nearly 9 months ha passed since the enactment of the restructuring act.

Today we hope to learn of the first steps taken by the Commissioner to restructure and refocus the Internal Revenue Service. I think that's one of the most difficult jobs that has been ever undertaken in government, and might well be one of the most difficult ever taken in a human organization.

In addition, we need to have a candid discussion of the challenges that lie ahead for the agency. Great things are expected and the road will be difficult. The Commissioner knows that, and most of us know that.

However, the effort is much needed, and we will all be better off when it has been accomplished. The Government Management, Information, and Technology Subcommittee will focus on these and other management practice issues within the IRS. I will then yield the chair to Mr. McIntosh whose subcommittee will examine the agency's record in complying with the Paperwork Reduction Act.

That law is intended to reduce the burden of paperwork the Federal Government places on the American people. The National Economic Growth, Natural Resources, and Regulatory Affairs Subcommittee will focus specifically on the paperwork imposed by the IRS and the Department of Agriculture.

Let us begin today by welcoming our witnesses. Mr. Charles Rossotti, Commissioner of Internal Revenue Service, has a distinguished career. He's the type of person that should have long ago been made Commissioner, and we now have one that has been a chief executive, knows what it is to be a chief executive. And when you preside over a complicated organization, such as the IRS, with 102,000 employees, the challenges are obviously great.

He will be panel 1. And the Members on both sides will have the opportunity to question the Commissioner after his statement has been made, and we will alternate 5 minutes each, varying between the majority and the minority.

On panel 2, we will hear from Mr. Nye Stevens, Director of the Federal Management and Workforce Issues at the General Accounting Office, which is the legislative arm of the government, and does our program and fiscal accounting; Mrs. Deidre Lee, Acting Deputy Director for Management at the Office of Management and Budget; and Mr. James R. White, Director of Tax Policy and Administrative Issues at the General Accounting Office will finish out panel 2.

Panel 3 will consist of Ms. Sydney Hoff Hay, a taxpayer activist from Phoenix, AZ; Ms. Kaye Whitehead, a pork farmer in Muncie, IN; Mr. William N. Lindsay, president of Benefit Management and Design Inc. in Denver, CO; and Mr. Jack Nicholson, owner of Company Flowers in Arlington, VA.

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