Sunday, June 25, 2017

20th Anniversary IRS Restructuring Comm'n Report

In the 1990s, tax reform was about as big of a focal point as it is today.  Some of the reasons were rate reduction and international competitiveness. There were a few concerns about IRS activities, such as a technology modernization effort that cost over $2 billion with little results. A commission was created by P.L. 104-52 (11/19/95). This 17-member group was the National Commission on Restructuring the IRS, co-chaired by Senator Kerrey (D-NE) and Congressman Portman (R-OH).

The Commission's report was released on 6/25/97. Its eight sections addressed:

  1. Congressional Oversight, Executive Branch Governance, IRS Management, and Budget
  2. Workforce and Culture
  3. IRS Strategic Objectives: Customer Service, Compliance, and Efficiency Gains
  4. Modernization
  5. Electronic Filing
  6. Tax Law Simplification
  7. Taxpayer Rights
  8. Financial Accountability
The report led to the  IRS Restructuring and Reform Act of 1998 (PL 105-206 (7/22/98)).

E-filing really took off after the Act. A few other items also took place, but not everything. IRS systems are still in need of modernization and there are continuing issues with workforce (such as an aging and declining workforce) and budget deficiencies.

In 2010, TIGTA issued a report - The Internal Revenue Service Restructuring and Reform Act of 1998 Was Substantially Implemented but Challenges Remain.


In April 2017, the AICPA, along with other tax practitioner groups, released a framework for IRS reform, that ties to the 1997 report. The introduction to this report states:


"As we approach the 20th anniversary of the Report of the National Commission on Restructuring the Internal Revenue Service (“Restructuring Commission” or “commission”), we recommend that any effort to modernize the Internal Revenue Service (IRS or “Service”) and  its  technology infrastructure should build on the foundation established by the Restructuring Commission.  The similarities between  the  condition  of  the  IRS  today  and  the  circumstances  that  motivated  the creation of the Restructuring Commission are striking."

The IRS faces many challenges - dealing with a complex tax law, the public's low understanding of what they do, insufficient funding, and technology that isn't as modern as needed.

What do you think?

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