June 11, 1987 EXTENSIONS OF REMARKS 15595 EXTENSIONS OF REMARKS A PAINLESS WAY TO RAISE figure is that by 1992 the IRS predicts that the Whereas the General Accounting Office OVER $100 BILLION IN FEDER­ tax gap will exceed $200 billion. has indicated that the response time and ac­ AL REVENUES Today, I and my colleagues Mr. PEASE, Ms. curacy levels in certain areas of taxpayer as­ SLAUGHTER, Ms. KAPTUR, are introducing a sistance are below average; sense of Congress resolution which will put Whereas taxpayers will be more likely to HON. BYRON L. DORGAN pay the full amount of taxes owed if they OF NORTH DAKOTA the Congress on record in support of efforts to close the current $1 billion tax gap by in­ view the Internal Revenue Service as a serv­ IN THE HOUSE OF REPRESENTATIVES oo ice-oriented agency and anticipate quality vesting in the IRS. Thursday, June 11, 1987 service; There are two major areas for investment at Whereas the implemetation of the Tax Mr. DORGAN of North Dakota. Mr. Speaker, the IRS. The first is taxpayer assistance. The Reform Act of 1986 will strain the already many of us in Congress are now scurrying taxpayer who views the IRS as efficient, help­ limited resources at the Internal Revenue about looking for at least $18 billion in new ful, and available will be m,ore apt to comply Service, especially in the taxpayer service revenue that will satisfy the requirements of with the law. But, in the last several years the division; the Senate and House budget resolutions. No taxpayers assistance division· has suffered Whereas the benefits of enhancing tax­ option appears to be very palatable. We funding cuts which have impaired the ability of payer service and enforcement resources far cringe at the thought of tampering with the the IRS to carry out its mission. The task exceed the costs of such measures; and income tax rates established just last year in force concluded that the IRS needed to get Whereas the enhancement of such re­ the Tax Reform Act. We hesitate to commit closer to the communities it serves and up­ sources is a simple and promising way to ourselves to the imposition of larger excise grade the quality of its assistance. reduce the huge Federal budget deficit con­ taxes. The second area of investment would be in fronting our Nation: Now, therefore, be it: The startling fact about this whole search is the enforcement division. Nothing undermines Resolved by the House of Representatives that there is a very simple way of raising reve­ the tax system more than the perception that fthe Senate concurring), That- nue staring us in the face. It will not raise all evading taxes goes undetected and unpun­ <1 > the administration and the Congress the revenue we need overnight, but if we ished. The task force recommended increas­ should substantially increase appropriate resources for the taxpayer assistance and begin now, we can raise enough revenue in ing the appropriate resources in order to find enforcement divisions of the Internal Reve­ the next few years to meet many of our the freeloaders. nue Service; and budget needs. This alternative would not in­ The costs of implementing these initiatives (2) the Internal Revenue Service should volve imposing new or increasing current will be small in comparison to the benefits. implement most, if not all, of the following taxes. The alternative is to close the tax gap For every dollar the Government spends, it recommendations: of $100 billion. will get up to $20 in return. This plan repre­ <A> Increase the prominence of taxpayer Several months ago I established a task sents one of the simplest and most promising service efforts in order to better balance force to study the tax gap problem and make ways of reducing the huge Federal deficit con­ such efforts with enforcement efforts. recommendations to close the gap. The tax fronting our Nation and ensuring the strength <B> Offer taxpayers more efficient and gap represents the difference between the of our voluntary tax compliance system. higher quality service by- amount of taxes owed to the Federal Govern­ I am requesting that you go on record in (i) providing more one-to-one tax prepara­ ment, and those actually collected. Chairing support of closing the $100 billion tax gap. I tion services and more walk-in offices during the task force were former IRS Commission­ am seeking your cosponsorship of a resolu­ tax filing season; ers Donald C. Alexander and Jerome Kurtz. tion that points the way to solving many of our <iD expanding taxpayer education pro­ grams; They were joined by several distinguished budget woes and of ensuring the continued stability of our tax system. <iii) instituting a pilot program of taxmo­ public tax officials and tax experts. Last month biles and tax fairs with special concentra­ I released the task force report, which con­ The text of the resolution follows: tion in rural areas; cluded that just as any wise corporation H. CoN. RES. 138 (iv) improving telephone information as­ should invest in an area promising the best Whereas the Internal Revenue Service es­ sistance; return, so too should the Federal Government. timates that the amount of taxes owed for <v> expanding the number of hours during Thus, it recommended closing the $100 billion 1986 will exceed the amount of taxes col­ which telephone information assistance is tax gap by investing more in the Internal Rev­ lected for such year by $100,000,000,000; available on weeknights and weekends Whereas this "tax gap" is growing at an during filing season; enue Service. alarming rate, and, according to Internal If the administration and Congress followed Revenue Service estimates, will increase to <vi> improving computer capabilities; the recommendations which were outlined in $200,000,000,000, by 1992; <vii> providing more prompt mail response; the "Dorgan Task Force Report on Narrowing Whereas, from 1973 to 1986, the taxpayer and the $100 Billion Tax Gap," the Treasury would compliance rate has dropped from 84 per­ <viii> reporting to the Congress annually reap at least $105 billion by fiscal year 1992. cent to just 81.5 percent; on the level and quality of taxpayer serv­ The task force recommendations would cost Whereas the Internal Revenue Service es­ ices. <C> Enhance enforcement efforts by- $3.6 billion over 5 years, but would raise $7 timates that for each 1 percentage point in­ crease in the taxpayer compliance rate reve­ (i) raising the audit rate from the current billion in fiscal year 1988, reaching $35 billion nues to the Treasury will increase annually 1.1 percent to 2.5 percent; in the fifth year, for a cumulative total of $105 by approximately $7,000,000,000, which <ii) restoring resources to criminal investi­ billion. This is no smoke and mirrors trick; this amounts to a cumulative total of gations and the collection of delinquent ac­ is real revenue. $105,000,000,000 over a 5-year period; counts; While the large majority of American taxpay­ Whereas, from 1976 to 1986, the audit rate <iii) enhancing efforts to crack down on ers comply with our tax laws, some do not. has declined from 2.5 percent to just 1.1 per­ foreign source income abuses and foreign Just 81.5 percent of American taxpayers com­ cent; tax havens; and plied in 1986. The Internal Revenue Service Whereas the increasing perception that <iv) requesting the General Accounting estimated that taxpayers owed the Federal tax evasion goes undetected and unpunished Office to study arrangements between the undermines the voluntary tax system; Internal Revenue Service and the Justice Government about $556 billion in income Whereas, from 1981 to 1986, the taxpayer taxes in 1986, but would voluntarily pay only Department for the prosecution of alleged service division of the Internal Revenue violations of the tax laws. $453 billion. That means there is a tax gap of Service has suffered staffing and funding over $100 billion. More alarming than this cuts; e This "bullet" symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. 15596 EXTENSIONS OF REMARKS June 11, 1987 RECOGNIZING LT. COMDR. company's stock-including a legally binding to 2 percent annually, and block trades in MARIO RUNCO, JR. certification of the intent of the investment. the normal course of business. We restrict defensive tactics like poison pills Curtails "greenmail". Requires disgorging as well as greenmail and poison parachutes­ of the difference between the greenmail HON. PATRICIA F. SAIKI price and the average price of the stock for OF HAWAII unless the shareholders approve. We extend the current tender offer period to 30 business the 15 days before or after the greenmail is IN THE HOUSE OF REPRESENTATIVES paid, if that price is lower, unless the green­ days. We allow the SEC to curtail restrictions Thursday, June 11, 1987 mail payment is offered to all shareholders on shareholder voting rights that are inconsist­ or approved by the shareholders. Mrs. SAIKI. Mr. Speaker, I take this opportu­ ent with the neutrality required by the Williams Requires "one-share/one-vote" for all nity to congratulate Lt. Comdr. Mario Runco, Act. stocks traded on national exchanges or on Jr., of Pearl Harbor on his selection as an as­ We also require that purchases of over 20 the NASDAQ National Market System com­ tronaut. One of fifteen astronaut trainees ap­ percent of a company's stock must be by puter network.