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U.S. GOVERNMENT PRINTING OFFICE

42-846

WASHINGTON : 1974

COMMITTEE ON THE JUDICIARY

JAMES O. EASTLAND, Mississippi, Chairman

JOHN L. MCCLELLAN, Arkansas
SAM J. ERVIN, JR., North Carolina
PHILIP A. HART, Michigan
EDWARD M. KENNEDY, Massachusetts
BIRCH BAYH, Indiana
QUENTIN N. BURDICK, North Dakota
ROBERT C. BYRD, West Virginia
JOHN V. TUNNEY, California

ROMAN L. HRUSKA, Nebraska
HIRAM L. FONG, Hawaii
HUGH SCOTT, Pennsylvania
STROM THURMOND, South Carolina
MARLOW W. COOK, Kentucky
CHARLES MCC. MATHIAS, JR., Maryland
ROBERT P. GRIFFIN, Michigan
EDWARD J. GURNEY, Florida

SUBCOMMITTEE ADMINISTRATIVE PRACTICE AND PROCEDURE

EDWARD M. KENNEDY, Massachusetts, Chairman PHILIP A, HART, Michigan

STROM THURMOND, South Carolina BIRCH BAYH, Indiana

CHARLES MCC. MATHIAS, JR., Maryland QUENTIN N. BURDICK, North Dakota EDWARD J. GURNEY, Florida JOHN V. TUNNEY, California

THOMAS M. SUSMAN, Chief Counsel

ANN L. PHILLIPPI, Staff Assistant
JANET F. ALBERGHINI, Staff Assistant

CONTENTS

Hearings held on:

April 1, 1974.

July 31, 1974.--

Testimony of:

Alexander, Donald L., Commissioner, Internal Revenue Service. Ac-

companied by: Meade Whitaker, Chief Counsel ; Lawrence B. Gibbs,

Assistant Commissioner (Technical); Anita F. Alpern, Deputy As-

sistant Commissioner (Planning and Research); Charles A. Gibb,

Chief, Disclosure Staff, Office of Assistant Commissioner (Compli-

ance) ; Harold T. Flanagan, Director, Disclosure Division Office of

Chief Counsel; and Burke W. Willsey, Assistant to the Commis-

sioner

Caplin, Mortimer, former Commissioner of Internal Revenue Service,

Washington, D.C..

Field, Thomas, executive director, Tax Analysts and Advocates, Wash-

ington, D.C--

Long, Mr. and Mrs. Philip, Bellevue, Wash---

Exhibits:

Special Service staff activities, IRS Manual supplement -

Letter from Arthur J. Maren, publisher of Freedom to Senator

Edward M. Kennedy, March 25, 1974 (Enclosure: Release of IRS

and other telephone directories to the public, IRS Manual supple-

ment)

Letter from Lawrence E. Wilber, contributing editor of Freedom to

Senator Edward M. Kennedy, March 29, 1974.--

List of outstanding Freedom of Information Act requests to the IRS

from Mr. and Mrs. Long--

Material on practice by executive branch of examing individual tax

returns, Congressional Record, April 16, 1970-----

IRS information notice on disclosure of tax returns and tax informa-

tion to members of the White House staff._-.

IRS breakdown of White House tax check requests_

IRS Manual, provisions on special tax check report_

IRS Manual refund procedures---

IRS rules for processing of special cases.-

IRS Manual announcing suspension of the sensitive case program--.

Correspondence relating to IRS suspension of previous sensitive case

reporting from Donald C. Alexander to Senator Edward M. Ken-

nedy, November 13, 1974.-

IRS policy concerning prospective disclosure of tax rulings, news re-

lease (August 9, 1974) -

Current status of release of Internal Revenue Manual..

IRS Manual transmittal.

Correspondence relating to use of “Official Use Only” classification

from Donald C. Alexander to Senator Edward M. Kennedy, October

2, 1974 (Enclosure: IRS Manual transmittal).

Statistics of income series.--

IRS supplementary information on Irish and Brandon cases_

Correspondence relating to reduction in charges for copies of docu-

ments from Donald C. Alexander to Senator Edward M. Kennedy,

October 23, 1974 (Enclosure: News release, October 15, 1974)--

Correspondence relating to freedom of information requests from

Donald C. Alexander to Senator Edward M. Kennedy, July 29, 174.-

(II)

Page

181

APPENDIXES
I, Jutrual Revenue Service regulations, guidelines, mannal, and policy

statements concerning freedom of information.
II, Juternal Revenue Service instructions and guidelines relating to free

dow of information reading room.... III, Jurnal Bavenue Service Chief Counsel's classification of records

under the Freedom of Information Act, June 30, 1967-IV. kmse of Commissioner Alexander to questions of Senator Kennedy

(Jan. 17, 1975)-

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FREEDOM OF INFORMATION: IRS

MONDAY, APRIL 1, 1974

U.S. SENATE,
SUBCOMMITTEE ON ADMINISTRATIVE PRACTICE AND
PROCEDURE OF THE COMMITTEE ON THE JUDICIARY,

Washington, D.C. The subcommittee met, pursuant to notice, at 10 a.m., in room 2228, Dirksen Office Building, Senator Edward M. Kennedy, chairman of the subcommittee, presiding.

Present: Senators Kennedy (presiding) and Thurmond.

Also present: Thomas M. Šusman, counsel and Ann Phillippi, staff assistant.

Senator KENNEDY. The committee will come to order.

Every American used to believe in the old adage that no matter who you were or who you knew, only two things in life were inevitable death and taxes. Many are no longer so sure about taxes. They are now convinced that a few=individuals with rich and powerful friends and corporations who buy political clout with campaign contributionshave found a way to escape the April 15 reaper.

Certainly it is true that the compliance of Americans with their tax laws has always been the envy of the free world. It is equally true that the reason they comply is because they believe that our system of taxation is founded upon fair, uniform and even-handed enforcement of the law.

Yet when we fill out our form 1040 this year, it is hard not to think of individuals earning hundreds of thousands of dollars who escape Federal tax liability completely; of oil companies with soaring profits who pay only 6 percent of their income in taxes, while workers pay more than triple that amount; and of a vast number of corporations who obtain special treatment under the tax laws.

We also think about White House plans to use tax audits to harass political enemies; of White House plans to obtain embarrassing personal information from tax files; of White House plans to revoke tax exemptions for public interest organizations; and of White House plans to secure special treatment for friends. And we think about the allegations that the President himself may have avoided paying his lawful share of his own tax bill.

Our system of self-assessment, backed by the full weight of the law whenever necessary, has produced a greater degree of voluntary compliance than the tax system of any other free people. But it is little wonder these days that, when Archie Bunker's daughter catches him cheating on his tax return, he replies, "I'm just, what do you call it, exercising my loopholes, that's all. Like the big guys.” Last year a Harris poll found 60 percent of those surveyed in sympathy with

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