Not one of more than 800 complaints of taxpayer harassment filed under Section 1203 of the Restructuring and Reform Act of 1998, the law that requires the Internal Revenue Service to fire workers who harass taxpayers, has been upheld by the IRS or the Treasury Inspector General for Tax Administration.

Prior to the enactment of Section 1203, the penalties for misconduct varied based on factors including the nature and seriousness of the offense and the employee's work record. The law eliminated the variation in penalty and provided that workers in violation of the law would be fired, unless the IRS Commissioner personally decided to reduce the penalty.

None of the 830 investigations into complaints of taxpayer harassment conducted from July of 1998 to May 2000 was substantiated, according to IRS data included in a report issued by the Congressional Joint Committee on Taxation.

While the statistics on Section 1203 show that allegations of retaliation against and harassment of taxpayers are the most common complaints of the 10 types of offenses punishable by dismissal under the law, few of the allegations are substantiated, the IRS said in its report.

Complaints of taxpayer retaliation and harassment by IRS workers accounted for 830 of the 1,349 investigations into allegations that fell under Section 1203 during that two-year period, the data showed.

In the 109 complaints upheld, 102 workers were fired for failing to file their federal tax returns on time; four were fired for threatening to audit taxpayers for personal gain; two were dismissed for understating their tax liability; and one employee was fired for falsifying or destroying records, according to the report.

Proponents say the data shows that the law is effective in curbing abuse against taxpayers, according to a report by the New York Times. Ginny Flynn, a spokeswoman for Senator William Roth (R-Del.), a longtime crusader for IRS reform and sponsor of the 1998 Reform and Restructuring Act, said the results showed that IRS employees are adhering to the law, the Times reported.

But others think the law goes too far in subjecting IRS employees to extreme scrutiny. According to the Times report, Colleen Kelley, president of the National Treasury Employees Union, disputed the need for mandatory-firing sections of the law.

"The law is unnecessary and I would like to see it repealed or at least revised," Kelley told the newspaper. "The law fixes a problem that doesn't exist."

The IRS noted in its findings that workers have raised concerns that the fear of allegations of harassment or retaliation against taxpayers discourages IRS employees from taking proper action.

-- SmartPros News Staff

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