US Senate Finance Leaders Question IRS Policy On Outsourcing

by Mike Godfrey, Tax-News.com, Washington

19 March 2007

US Senators Max Baucus (D-Mont.) and Chuck Grassley (R-Iowa), Chairman and Ranking Republican Member of the Senate Finance Committee, are questioning a new Internal Revenue Service plan to outsource the writing of some agency rules.

The IRS recently announced its intention to ask “interested parties” to provide research and even draft proposals for new procedures and regulations for administering tax policy and implementing tax legislation. In letters requesting more information from the Treasury Inspector General for Tax Administration, J. Russell George, and from the IRS’s chief counsel, Donald L. Korb, Baucus and Grassley expressed concern that this will allow outside groups to have undue influence on policies that affect American taxpayers.

“What’s best for taxpayers should be the IRS’s number-one concern when they make new rules for administering tax policy. I want to make sure that outside groups don’t skew the IRS’s view,” explained Baucus.

“In the end, the IRS needs to run the IRS. And with $345 billion in legally owed taxes going uncollected every year, it would seem that the IRS might need to ride closer herd on its rules, rather than farming them out," he added.

Grassley commented: “We don’t need K Street lawyers writing enforcement regulations to help their clients create tax shelters. That would be worse than a camel’s nose under the tent. It would be the whole caravan."

"We might as well have the Justice Department let defense counsels write sentencing guidelines. If the IRS is that short on resources, the commissioner needs to tell Congress," he remarked.

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