IRS Chief Argues For Greater Transparency In Fight Against Tax Abuse

by Leroy Baker, Tax-News.com, New York

24 November 2003

In testimony given to the Senate Permanent Subcommittee on Investigation hearing into abusive tax shelters last week, Internal Revenue service Commissioner Mark Everson stated that the most effective way to win the battle against abusive tax avoidance was transparency backed up by sound legislation.

“As I indicated previously, we believe transparency is a key element in addressing abusive tax transactions. Transparency includes the disclosure of information by taxpayers and promoters and the disclosure of information to taxpayers and promoters,” said Everson.

“Transparency is critical to our early identification and would be significantly enhanced by the legislative change proposed by the Treasury Department that would expand the scope of the registration rules,” stated the Commissioner.

He added in his summing up: “The majority of taxpayers are honest and want to comply with the tax laws. By providing quicker guidance on tax transactions, we can enhance voluntary compliance.”

He also argued that tax professionals have a major role to play in maintaining the integrity of the tax system.

“The majority of tax professionals recognize their obligations to the system as well as their obligations to their clients, and they have expressed dismay about the inappropriate behavior of some of their colleagues. I have asked the Deputy Commissioner for Services and Enforcement to develop and coordinate a unified strategy for improving confidence in the integrity of tax professionals, a strategy that will encourage best practices and deter improper and unethical practices,” he said.

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