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Irs Restructuring Hearings Committee on Finance S. HRG. 105±529 IRS RESTRUCTURING HEARINGS BEFORE THE COMMITTEE ON FINANCE UNITED STATES SENATE ONE HUNDRED FIFTH CONGRESS SECOND SESSION ON H.R. 2676 JANUARY 28, 29; FEBRUARY 5, 11, AND 25, 1998 ( Printed for the use of the Committee on Finance U.S. GOVERNMENT PRINTING OFFICE 47±361ÐCC WASHINGTON : 1998 1 COMMITTEE ON FINANCE WILLIAM V. ROTH, JR., Delaware, Chairman JOHN H. CHAFEE, Rhode Island DANIEL PATRICK MOYNIHAN, New York CHARLES E. GRASSLEY, Iowa MAX BAUCUS, Montana ORRIN G. HATCH, Utah JOHN D. ROCKEFELLER IV, West Virginia ALFONSE M. D'AMATO, New York JOHN BREAUX, Louisiana FRANK H. MURKOWSKI, Alaska KENT CONRAD, North Dakota DON NICKLES, Oklahoma BOB GRAHAM, Florida PHIL GRAMM, Texas CAROL MOSELEY-BRAUN, Illinois TRENT LOTT, Mississippi RICHARD H. BRYAN, Nevada JAMES M. JEFFORDS, Vermont J. ROBERT KERREY, Nebraska CONNIE MACK, Florida LINDY L. PAULL, Staff Director and Chief Counsel MARK A. PATTERSON, Minority Staff Director and Chief Counsel (II) ?2 C O N T E N T S JANUARY 28, 1998 OPENING STATEMENTS Page Lott, Hon. Trent, a U.S. Senator from Mississippi ............................................... 1 Roth, Hon. William V., Jr., a U.S. Senator from Delaware, chairman, Commit- tee on Finance ...................................................................................................... 1 Moynihan, Hon. Daniel Patrick, a U.S. Senator from New York ........................ 5 Kerrey, Hon. J., Robert, a U.S. Senator from Nebraska ...................................... 6 Gramm, Hon. Phil, a U.S. Senator from Texas ..................................................... 7 Grassley, Hon. Charles E., a U.S. Senator from Iowa .......................................... 8 Bryan, Hon. Robert H., a U.S. Senator from Nevada ........................................... 9 Baucus, Hon. Max, a U.S. Senator from Montana ................................................ 10 Graham, Hon. Bob, a U.S. Senator from Florida .................................................. 11 Breaux, Hon. John, a U.S. Senator from Louisiana ............................................. 12 Rockefeller, Hon. John D., IV, a U.S. Senator from West Virginia ..................... 13 Conrad, Hon. Kent, a U.S. Senator from North Dakota ...................................... 14 Murkowski, Hon. Frank H., a U.S. Senator from Alaska .................................... 15 ADMINISTRATION WITNESSES Rubin, Hon. Robert E., Secretary of the Treasury ................................................ 16 Rossotti, Hon. Charles O., Commissioner of Internal Revenue Service .............. 20 JANUARY 29, 1998 OPENING STATEMENTS Roth, Hon. William V., Jr., a U.S. Senator from Delaware, chairman, Commit- tee on Finance ...................................................................................................... 51 CONGRESSIONAL WITNESSES Portman, Hon. Rob, a U.S. Representative from Ohio ......................................... 52 PUBLIC WITNESSES Richardson, Margaret M., Esq., partner, Ernst & Young, LLP, Washington, DC; former Commissioner of Internal Revenue ................................................. 59 Alexander, Donald C., partner, Akin, Gump, Strauss, Hauer & Feld, LLP, Washington, DC; former Commissioner of Internal Revenue .......................... 61 Cohen, Sheldon S., partner, Morgan, Lewis & Bochius, LLP, Washington, DC; former Commissioner of Internal Revenue ................................................. 63 Goldberg, Fred T., Jr., partner, Skadden, Arps, Slate, Meagher & Flom, LLP, Washington, DC; former Commissioner of Internal Revenue and former Treasury Assistant Secretary for Tax Policy ......................................... 65 Tucker, Stefan F., chair-elect, section of taxation, American Bar Association, and member, Tucker, Flyer & Lewis, Washington, DC .................................... 90 Burnette, Douglas C., president, National Society of Accountants, Alexandria, VA .......................................................................................................................... 92 Cherecwich, Paul, Jr., international president, Tax Executives Institute and vice president, taxes and tax counsel, Thiokol Corporation, Ogden, UT ......... 94 (III) IV Page Mares, Michael E., chair, tax executive committee, American Institute of Certified Public Accountants, Washington, DC ................................................. 97 Gates, Bryan E., chair, Federal Regulatory Subcommittee, National Associa- tion of Enrolled Agents, Gaithersburg, MD ....................................................... 98 FEBRUARY 5, 1998 OPENING STATEMENTS Roth, Hon. William V., Jr., a U.S. Senator from Delaware, chairman, Commit- tee on Finance ...................................................................................................... 105 ADMINISTRATION WITNESSES Calahan, Richard B., Deputy Inspector General, U.S. Treasury Department, Washington, DC ................................................................................................... 106 CONGRESSIONAL WITNESSES Willis, Lynda D., Director, Tax Policy and Administration Issues, U.S. Gen- eral Accounting Office, Washington, DC ............................................................ 108 PUBLIC WITNESSES Olson, Nina E., executive director, Community Tax Law Project, Richmond, VA .......................................................................................................................... 124 Saltzman, Michael, tax attorney, White & Case, New York, NY ........................ 126 Schriebman, Robert, tax attorney, Rolling Hills Estates, CA .............................. 128 Strauss, Bruce A., enrolled agent, Jacksonville, FL ............................................. 130 FEBRUARY 11, 1998 (INNOCENT SPOUSE TAX RULES) OPENING STATEMENTS Roth, Hon. William V., Jr., a U.S. Senator from Delaware, chairman, Commit- tee on Finance ...................................................................................................... 141 Baucus, Hon. Max, a U.S. Senator from Montana ................................................ 143 PUBLIC WITNESSES Cockrell, Elizabeth, New York, NY ........................................................................ 144 Pejanovic, Svetlana, New York, NY ....................................................................... 148 Andreasen, Karen J., Tampa, FL ........................................................................... 150 Berman, Josephine, South Orange, New Jersey ................................................... 153 Beck, Richard C., professor of law, New York Law School, New York, NY ........ 165 O'Connell, Marjorie, O'Connell & Associates, Washington, DC ........................... 168 Keating, David, National Taxpayers Union, Washington, DC ............................. 170 FEBRUARY 25, 1998 OPENING STATEMENTS Roth, Hon. William V., Jr., a U.S. Senator from Delaware, chairman, Commit- tee on Finance ...................................................................................................... 185 Kerrey, Hon. J. Robert, a U.S. Senator from Nebraska ....................................... 197 PUBLIC WITNESSES Light, Paul C., director, Public Policy Program, The Pew Charitable Trusts, Philadelphia, PA .................................................................................................. 187 Sanders, Dr. Ronald P., associate professor of public administration, The George Washington University, Washington, DC ............................................. 189 V Page Stanton, Thomas, academy fellow and vice-chair of standing panel on execu- tive organization and management, accompanied by Herbert Jasper, acad- emy fellow, National Academy of Public Administration, Washington, DC ... 191 Tobias, Robert M., president, National Treasury Employees Union, Washing- ton, DC .................................................................................................................. 204 Shaw, G. Jerry, general counsel, Senior Executives Association, Washington, DC .......................................................................................................................... 205 Woolner, Ray, national president, Professional Managers Association, Wash- ington, DC ............................................................................................................. 208 ALPHABETICAL LISTING AND APPENDIX MATERIAL Alexander, Donald C.: Testimony .......................................................................................................... 61 Prepared statement .......................................................................................... 219 Responses to additional questions submitted by Senator Roth .................... 223 Andreasen, Karen J.: Testimony .......................................................................................................... 150 Prepared statement .......................................................................................... 227 Baucus, Hon. Max: Opening statements........................................................................................ 10, 143 Beck, Richard C.: Testimony .......................................................................................................... 165 Prepared statement .......................................................................................... 229 Berman, Josephine: Testimony .......................................................................................................... 153 Prepared statement .........................................................................................
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