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Eliminate, Don’t Reform, the IRS

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Yet again a taxpayer “bill of rights” has been enacted into law. And so, after all the recent revelations of Internal Revenue Service abuse, we can all now be confident the tax collector will respect the rights and dignity of every American.

Right. And pigs have started flying.

We’ve been here before. This is the third so-called bill of rights for taxpayers passed in recent years. Doesn’t that strike you as strange? Do you think they got it right this time?

At first glance, the law might look like it will afford some protection for taxpayers. It will create a nine-member board to oversee operations, six of whose members will be from the private sector. The law will also shift the burden of proof from the taxpayer to the IRS in court cases. Currently, the taxpayer is guilty until he proves himself innocent. Other provisions will let citizens harmed by IRS negligence sue for damages and relieve taxpayers of liabilities of former spouses. Homes can no longer be seized without a court order. Some penalties will be reduced and IRS deadlines tightened.

But in the world of legislation, especially IRS “reform” legislation, things, as W.S. Gilbert wrote, “are seldom what they seem.”

The oversight board and the shift in the burden of proof “are said to be the silver bullets that will end IRS abuse,” writes Daniel J. Pilla, one of the great IRS watchers. “They are more likely to be blank cartridges.”

Pilla writes that the oversight board is not what we have been led to believe it is. To judge by the news summaries, you’d think that this board of overseers will be able to come to the rescue of battered citizens. But that’s not the case. The new body will be involved in planning for the future and in overseeing the IRS budget and commissioner. “In other words,” writes Pilla, “the Board will function as a forum for thinking about the overall direction of the IRS.” It won’t have the power to prevent agents from treating taxpayers like child molesters. Pilla notes that the board is specifically denied authority over the agency’s law-enforcement apparatus. Don’t expect it to rectify the abuses associated with audits and other activities designed to wring more revenue of Americans. Pilla says the board could not avert the tyrannical conduct citizens reported at Senate Finance Committee hearings.

And what of the burden of proof? A clue to the bogus nature of the “reform” lies in the bill’s command that Americans keep records and cooperate with the IRS during investigations. In other words, the IRS may have the nominal burden of proof, but you must furnish the records it will use against you. But there’s even less to this provision than meets the eye. The burden is shifted only in court proceedings. “The problem,” Pilla writes, “is that 97 percent of everything the IRS does involves no ‘court proceeding.'” Most of the problems that citizens have with the IRS occur outside of the court. They involve, Pilla says, “its powers of lien, levy, and seizure.” In other words, the shift in the burden will make no difference to most taxpayers who are hounded by the IRS.

Even in court, there is hardly real relief forthcoming. To shift the burden to the government, a taxpayer will have to make a “reasonable” case that the IRS position is defective. In other words, the citizen has the burden of showing that the burden should be shifted! Some protection.

Bills of rights have never restrained the IRS. In a sense, it’s not the agency’s fault. The fault lies with Congress, which has charged the IRS with extracting more than a trillion dollars from the hide of the American people. There’s no way to do that while being nice. No amount of legislation will make the agency a “service provider.” Taxpayers cannot be its customers.

There is one way-and only one way-to respect taxpayer rights: Repeal all income taxes, abolish the IRS, and repeal the outrageous spending that requires them.

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    Sheldon Richman is vice president of The Future of Freedom Foundation and editor of FFF's monthly journal, Future of Freedom. For 15 years he was editor of The Freeman, published by the Foundation for Economic Education in Irvington, New York. He is the author of FFF's award-winning book Separating School & State: How to Liberate America's Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and Tethered Citizens: Time to Repeal the Welfare State. Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: "I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank... . I also think that Mr. Richman is right to fear that state education undermines personal responsibility..." Sheldon's articles on economic policy, education, civil liberties, American history, foreign policy, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, The American Conservative, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the The Concise Encyclopedia of Economics. A former newspaper reporter and senior editor at the Cato Institute and the Institute for Humane Studies, Sheldon is a graduate of Temple University in Philadelphia. He blogs at Free Association. Send him e-mail.