September 23, 1997

September 23, 1997 | Testimony on Taxes

A Summary of the Second Day's Proceedings

The second phase of the hearings featured several taxpayers who testified about their experiences with the Internal Revenue Service. This stage of the hearings was designed to focus on the Service's customer service. As the testimony demonstrated, the IRS is in need of serious reform if it is to return to original its mission of serving the American taxpayer.

Among the witnesses was Monsignor Lawrence Ballweg, a Roman Catholic priest form New York. After the death of his mother in 1988, Monsignor Ballweg became the trustee of an estate his mother had left in trust. Monsignor Ballweg was responsible for distributing the assets from this trust to a variety of charities. In the course of his service as trustee, he encountered a bureaucracy that constantly demanded additional adjustments and clarifications on one returns while at the same time ignoring his requests for copies of the very records he was being asked to adjust and clarify. Instead of providing the taxpayer with the information that was necessary to fulfill the agency's own request, the IRS instead threatened to seize his assets, including his bank account, to satisfy a supposedly unsatisfied judgement of $18,000. Only after his case was featured on CNN did a representative from the IRS call Monsignor Ballweg, provide him with a copy of his report, and inform him what changes were necessary to adjust his return. A short time later, the IRS informed him that he did not owe any tax.

The Monsignor's sense of utter frustration was echoed by Mrs. Katherine Lund. Mrs. Lund detailed her involvement with the Internal Revenue Service which spanned fourteen years. Following a divorce in 1983, the IRS examined Mrs. Lund's return and determined she owed an additional $7,000. Since all the notices went to her ex-husband, she was unaware that she owed any additional tax for over a year. When she did become aware of this assessment, Mrs. Lund contacted the service and was informed that she owed them $16,000 immediately. What unfolded over the next fourteen years illustrates the systemic mismanagement and lack of coordination within the IRS. After settling with the IRS on $2,709 for back taxes, Mrs. Lund attempted to pay it. Amazingly, the Service refused to accept her payments for since it claimed it did not yet have an account set up to receive her check. Over the next fourteen years, the IRS drove Mrs. Lund to bankruptcy, permanently destroyed her credit, and left her personal life in ruins.

These examples and many others illustrate that the IRS is an agency that has lost its bearings. It is mismanaged, inefficient, and generally unaccountable to the American taxpayer. The next phase of these hearings will highlight IRS whistle blowers who will testify about problems with the corporate culture of the Service.

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