Grassley contended that the IRS requires the leadership skills of an effective manager, as well as knowledge of the tax laws. "The agency maintains a staff of 110,000 workers and is responsible for serving about 115 million individual taxpayers. The IRS has offices in each of the 50 states, fields 76 million taxpayer inquiries annually, and processes 1 billion information documents each year. The employee union with which the Commissioner must negotiate is one of the largest labor unions in the country. Taxpayers deserve to have a leader for this agency with the proven ability to manage a major organization," Grassley said.
Last Wednesday, IRS Commissioner Margaret Milner Richardson announced her resignation, effective after the tax filing season. Although Grassley has praised Richardson for her accessibility and willingness to address the specific taxpayer problems with the IRS that he brought to her attention, many problems continue to exist.
For example, in the letter he sent today to President Bill Clinton, Grassley reiterated his dismay that the IRS has spent over $4 billion during the last 10 years to plan a computer upgrade known as Tax Systems Modernization, which has yet to be put in place. In 1995, Grassley requested a review by the independent General Accounting Office (GAO) which found the IRS is not equipped to track revenue collected through its tax compliance program. The GAO indicated that the IRS had not lived within the guidelines of the 1990 Chief Financial Officers Act. This law was created to bring about more effective financial management practices to federal agencies.
"At the very least, the IRS should meet the same standards it demands of hardworking Americans. It must be accountable for the taxpayer dollars it spends," Grassley said. "I cast my vote for a new kind of IRS: one that operates efficiently and effectively. And to achieve that goal for this administrative agency, the President needs to put a highly skilled business manager in charge of the IRS."
According to the Chief Financial Officer for the IRS, the agency annually processes more than 200 million returns, issues more than 90 million refunds, and deals with over 12,000 financial institutions and 12 Federal Reserve Banks in some 600 locations. Grassley said that Congress annually appropriates as much as $7.5 billion for IRS operations.
Yet, according to the GAO, the tax gap -- the difference between the amount that is owed for taxes and the amount that the IRS collects -- has grown from $ 85.9 billion in 1985 to $128.4 billion in 1992.
"All too often, tax attorneys appreciate complexity. But a manager simplifies things to the bottom line. Maybe that's what's been missing for a long time at the IRS," Grassley said.
Grassley serves on the Senate Finance subcommittee charged with IRS oversight and on the National Commission on Restructuring the IRS. The commission is charged with making recommendations to Congress later this year.