IRS Commissioner Reports on Restructuring Progress

By Danielle D'Angelo

The "enormity of change" at the Internal Revenue Service is staggering, according to IRS Commissioner Charles O. Rossotti. Speaking before a recent New York City meeting of the Council on Economic Development, Rossotti provided an update on the agency's restructuring since he became commissioner in November 1997.

"Many critics came down very hard and said the IRS was an agency out of control," Rossotti said. "I don't think that's true. A more accurate description is that it is really an agency out of date."

In the past year, the IRS focused on two immediate priorities: fixing the Year 2000 problem and becoming a more customer-focused agency. Rossotti said the agency has budgeted nearly $1 billion to fix the Year 2000 problem and expects to have completed renovation by January to reserve the remainder of the year for testing.

Rossotti discussed the agency's attempts to deliver visible, immediate service improvements to taxpayers, highlighting such initiatives as a strengthened taxpayer advocate position, improved telephone customer service, and extended office hours.

Some of Rossotti's more candid comments occurred during the presentation's question-and-answer session. Responding to an audience member who asked how the IRS can help achieve more clearly written tax rules and improve its relations with Congress, the commissioner quipped, "Not all problems have solutions."

He clarified this response by stressing that even though the IRS does not draft regulations there is at least a partial solution since the agency now collaborates more closely with the Treasury Department. He added that the taxpayer advocate will now systematically obtain feedback on the types of problems facing taxpayers and report back to Congress. This is the first time the IRS is capturing information in this manner, and Rossotti said he hopes that it will improve the IRS's interaction with Congress on proposed changes to the tax code. *