May 1, 1998 CONGRESSIONAL RECORD Ð SENATE S4027 Training and Literacy Act, and the vised they were not and the General Mr. COVERDELL. Mr. President, I Senate proceed to its consideration. I Accounting Office said they were. On ask unanimous consent that the order further ask unanimous consent that all the same occasion, on or about early for the quorum call be rescinded. after the enacting clause be stricken March, the Internal Revenue Service The PRESIDING OFFICER. Without and the text of S. 1186, as amended, be issued an interim memorandum to its objection, it is so ordered. inserted in lieu thereof, the bill be read employees, and they quote me saying Mr. COVERDELL. Mr. President, we a third time, and a vote occur on pas- the disclosures ``are a result of General have now been joined by my distin- sage of H.R. 1385 on Tuesday, May 5, at Accounting Office review requested by guished colleague from Ohio, who was 5:30 p.m. myself to examine random audits.'' talking to me moments ago about The PRESIDING OFFICER. Without Then they told their employees that hearings he held in his own home objection, it is so ordered. during fiscal years 1994 through 1996, State. I yield up to 15 minutes to the The bill (H.R. 1186) as amended, was ``the IRS did not randomly select re- Senator from Ohio for his remarks. ordered to a third reading and was read turns for audit from either the popu- The PRESIDING OFFICER. The the third time. lation of all taxpayers or all returns. Chair recognizes the Senator from Mr. JEFFORDS. I ask unanimous IRS has about 40 audit sources which Ohio. consent that, at 4:30 on Tuesday, there are programs and techniques used to Mr. DEWINE. Mr. President, I thank be 60 minutes of debate equally divided select potentially noncompliant re- my colleague from Georgia for holding in the usual form for closing remarks turns for audit. IRS audit sources do this session where we have a chance to prior to the vote on the passage of the not rely on random selection from the talk about the problems connected bill. I further ask unanimous consent population of all returns but IRS se- with the IRS. He has been a true leader that, following passage of the bill, the lects returns having characteristics in- in this issue. Senate insist on its amendment and re- dicative of potential noncompliance.'' This is a matter of great importance quest a conference with the House and Here is the key point, right here in and interest to the taxpayers across the Chair be authorized to appoint con- the publication from the IRS. There this country. Mr. President, it is be- ferees on the part of the Senate. I fi- are three little dots, and then it says, coming clearer every day that we sim- nally ask unanimous consent that S. ``No taxpayers outside of these six sub- ply have to reform the IRS. The facts 1186 be placed back on the calendar. populations were selected at random of IRS abuse are, by now, well known. The PRESIDING OFFICER. Without for audit.'' Dot dot dot. As the hearings continue, we get more objection, it is so ordered. Mr. President, the ``dot dot dot'' is information every single day. The es- Mr. JEFFORDS. I yield back the re- this sentence: ``IRS officials did iden- sential facts are very disturbing. mainder of my time, and I also have tify six projects involving subpopula- In 1996, the IRS answered only 20 per- authority to yield back the remaining tions of taxpayers with indications of cent of its phone calls. time of the minority. noncompliance from which taxpayers An IRS report released in January of The PRESIDING OFFICER. All time were randomly audited,'' Dot dot dot. this year showed that one out of every is yielded back. Now, the tax system is complicated four IRS revenue officers and super- f beyond belief. Everybody knows the visors felt pressured to achieve en- story where they gave a similar family MORNING BUSINESS forcement goals. Tax collection statis- to 50 accountants. It was an exercise tics were used to evaluate the perform- The PRESIDING OFFICER. Under that some major publication went ance of employeesÐand the district of- the previous order, the Senate will now through. They all turned them in. Not fices were ranked on how much taxes begin a period of morning business. one of the 50 turned it in the same way, The Chair recognizes the Senator they collectedÐcollected from us. and not one of them was correct. In 1993, the IRS gave incorrect infor- from Georgia for 1 hour. So it is easy to make administrative mation to taxpayers a stunning 8.5 mil- f errors. I have to tell you, Mr. Presi- lion times. In 1987, the GAO said that INTERNAL REVENUE SERVICE dent, ``dot dot dot'' is not an adminis- 47% of the calls to the IRS resulted in trative oversight. ``Dot dot dot'' left Mr. COVERDELL. Mr. President, the incorrect information. out this sentence intentionally. It A recent survey actually found that hearings that the Senate Finance Com- quoted everything else in the para- mittee has been conducting on the In- one out of two Americans would rather graph but left that sentence out. be mugged than audited. ternal Revenue ServiceÐthe adjectives If the American taxpayers did that, that have been used to describe it are they would be in deep trouble. This is MAUREEN SCHAEFFER I recently held a hearing in Toledo on ``startling,'' ``stunning,'' ``unbeliev- why there is no credibility anymore. the issue of IRS reform and tax reform. able.'' I do believe most of the Amer- They just don't have any credibility. One of the witnesses was Maureen ican public who have seen this unfold There are a lot of good folks over Schaeffer, from Lakewood, Ohio. before their eyes are aghast at some of there. I have met them; I know of Maureen told us she was married for the assertions and allegations that them. A lot of them have been very co- twenty years to an abusive, alcoholic have been made. operative with our office trying to husband. He was the sole wage earner Recently, I became very concerned solve problems. But there is just no and handled all of their tax matters, that the IRS was still conducting ran- credibility. It is this kind of behaviorÐ and she signed all of their joint tax re- dom audits. They indicated to me that in fact, this is sort of tame. they were not. So I asked the General It is this kind of occasion that has turns. She worked in the home, raising Accounting Office to verify to me that caused an outraged population to call their seven children and caring for his random audits were not a tool of the on a Congress to do something bold, to invalid mother. After twenty years of Internal Revenue Service. A report was bring this kind of behavior under con- marriage, Maureen realized the nega- issued dated February 1998: ``Report to trol. tive impact that he was having on the Honorable Paul Coverdell, U.S. Mr. President, that is exactly what is their childrenÐso she filed for divorce. Senate, Tax Administration, IRS Use going to happen in this Congress. The At the time of the divorce, Maureen of Random Selection in Choosing Tax IRS is not going to be the same institu- knew that her ex-husband was being Returns for Audits.'' tion by the end of this Congress. audited by the IRS, and in the settle- On page 2, at the very top, it says, Mr. President, I think the Senator ment agreement reached between them ``IRS officials did identify 6 projects in- from Ohio will be here momentarily the ex-husband assumed responsibility volving subpopulations of taxpayers and we will hear from him regarding for all back taxes. with indications of noncompliance his hearings on the Internal Revenue In the summer of 1996, the ex-hus- from which taxpayers were randomly Service. band filed for bankruptcy. His only selected for audit.'' Let me repeat I suggest the absence of a quorum. creditors were his ex-wifeÐMaureenÐ thatÐ``from which taxpayers were ran- The PRESIDING OFFICER. The and the IRS. Shortly after the filing of domly selected for audit.'' clerk will call the roll. the bankruptcy, Maureen was notified I made a public statement of deep The assistant legislative clerk pro- by the IRS that she owed $150,000 to the concern about the fact I had been ad- ceeded to call the roll. IRS. One week later, the IRS gave her S4028 CONGRESSIONAL RECORD Ð SENATE May 1, 1998 another noticeÐthis time to inform major problem, because when these grandchildren. However, because the her that she owed an additional cases are not resolved at an early farm acreage is their largest asset, the $100,000. She contacted the IRS's tax- stage, they end up going to Tax Court. effect of the estate tax will be dev- payer advocate's office in the Northern In Mr. Sulewski's practice, he has astating. District of Ohio. She was told that had approximately 100 cases that have We also heard the testimony of Rob- they would contact her after they gone to Tax Court, yet only one case ert Koerner, the former president and looked into her case. When she did not has gone to trial. Clearly, these areÐ general manager of Koerner FarmsÐa hear back from them, she called back, very oftenÐmatters that do not need 300-cow dairy farm in Williams County.