Newspaper article The Christian Science Monitor

IRS Swings Back into Old Role: Enforcer

Newspaper article The Christian Science Monitor

IRS Swings Back into Old Role: Enforcer

Article excerpt

Uncle Sam's tax collector has started to pump iron again.

"There has been a shift back to tax enforcement," says Mortimer Caplin, a former commissioner of the United States Internal Revenue Service (IRS). "I'm heartened by that."

In recent months, the IRS has been cracking down on some corporate and personal tax shelters and other tax dodges. The agency proclaimed Friday a further expansion of efforts to catch high- income tax cheaters.

One reason is the changed mood in the nation, and especially in Congress. The corporate accounting scandals, the parade of executives getting rich while employees lost their jobs and pension money, the efforts by some firms to avoid taxes by moving their legal headquarters abroad, have given the IRS a green light to get tough.

"Congressional rhetoric has shifted," says Charles Davenport, a tax professor at Rutgers University, New Brunswick, N.J.

In 1998, some key lawmakers painted the IRS as a monster out of control. Former Sen. William Roth (D) of Delaware paraded a host of its supposed victims at committee hearings. Most charges were later proved bogus. By then, though, Congress already had passed a measure that discouraged IRS agents from tackling tax crooks.

Instead, the IRS focused on helping taxpayers fill out complex tax forms.

Now the IRS pendulum has begun to swing back from being "kinder and gentler" with taxpayers to putting greater emphasis on making sure they pay taxes that are due, says Joel Slemrod, a tax economist at the University of Michigan Business School in Ann Arbor.

With the federal budget in deficit, the IRS has turned a bit to hiking revenues.

There are other bureaucratic factors. For the past several years, the IRS has been bogged down in a massive reorganization. Further, its agents were knee deep in settling some 150,000 "innocent spouse" cases - cases where a couple's joint tax return, signed by both parties, resulted in an unfair tax burden on one spouse after a divorce or death.

At this point, the IRS can free more agents to seek out the minority of taxpayers, corporate or individual, who illegally fail to pay a fair tax share. …

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