While IRS offered to furnish us with copies of these files without prior inspection, the price tag attached at 10¢ a page could run a thousand dollars or more a price tag we obviously can't afford. As to why we can't see the original files in the office where they are maintained? The only explanation we received was that the people there didn't want us in their office. Just looking is expensive.-A similar experience occurred with our request to see up-to-date lists of manual directives issued by the IRS. After lengthy correspondence we were refused authorization to examine either the "control data sheets" or "the updated list of current manual supplements" even though we offered to examine them in Washington, D.C., during lunch hour in the office they were located. Again IRS said they could make us copies, but the price tag at 10¢ a page would run $200 for the control data sheets and an additional $15 for the updated listings. "Too broad to be considered."-IRS's latest ploy in this game has been to simply decline to reply to our requests on the grounds the request is "too broad to be considered." This has been the history of our requests dating back to September of 1973 to examine current indexes to national office reports. Each national report in a series is assigned a permanent sequential number, and we have been able to establish from IRS that there are at least three separate files in existence indexing these reports: (a) A file containing Form 2951's (a requisition or "report clearance" form), (b) a card file of status cards (one card per report), and (c) an informal card file used to assign a number to each report. But we are told first by Disclosure Chief Charles Gibb and then by Assistant Commissioner John Hanlon that our request to see the file containing Form 2951's, or to see either of the remaining two files "is too broad to be considered." We are told that if we will only specify a specific report number, they will "consider"-note they don't say grant-a request to see the corresponding Form 2951 or control card, but it is of course the report numbers we want to learn by examining the card or form files. We have appealed to the Commissioner but if experience is any guide he may not respond since IRS doesn't consider a refusal to consider a request as a denial open to review by the Commissioner. Where in open defiance of the Freedom of Information Act, the IRS mania for secrecy is so deeply instilled in its officials that citizens cannot obtain access to simple indexes surely something needs to be done. WHAT HAS IRS TO HIDE? The evils of IRS secrecy extend beyond considerations of abstract principles, beyond the mere fact of their breaking the FOI law. The evils of IRS secrecy extend to their impact on the everyday life of each of us. No agency has more power over our everyday lives, yet no agency is more secretive about how it conducts our affairs. We would like to illustrate the importance of public disclosure about the internal dealings of our tax agency by reviewing a number of IRS internal documents-documents which IRS sought and seeks to withhold from us because of the serious questions they raise about the manner in which IRS administers our tax laws. Secrecy coverup for tax administration failures The stamp of secrecy is presently being used by the IRS to cover up serious failings in our tax administration system. For nearly a decade the blanket of secrecy has been thrown over the results of a multi-million dollar series of scientific studies conducted by the IRS on how well our tax administration system is working because the results found indicate problems so serious that IRS fears to reveal them would undermine taxpayer confidence in the IRS and in our tax system. According to documents we have obtained again marked "For Official IRS Use Only," preliminary estimates from the most recent study under IRS's Taxpayer Compliance Measurement Program of a scientific sample of returns filed by individuals in 1972 indicate that had all returns filed been audited last year, almost half (or 48 percent) would have failed to satisfy IRS agents. The range of disagreement between how IRS and the average taxpayer would calculate his tax is far from small. Indeed, the average disagreement IRS figures indicate would involve almost a 50 percent increase in tax over that already paid-or about 23 billion additional in taxes from individuals. These same internal IRS statistics indicate that while the range of difference between IRS and the average taxpayer is vast, the more important question of who is right-the taxpayer or the IRS agent-has no simple answer. The range of differences among IRS's own agents was nearly as great as between the taxpayer and the IRS itself. Sharp differences reflect differing IRS standards.-While we have only one federal tax law, the standards adopted by IRS districts across the country in applying that law vary sharply. Even on fairly simple returns, IRS findings showed the differences among IRS agents in different districts profoundly disturbing. For example, were IRS agents to audit all individuals reporting between $10,000 and $50,000 income chiefly from wages and salaries (excluding those receiving business or professional income), the percentage of returns that would be approved as filed varied from 77 percent recorded by IRS agents assigned to the Providence, West Virginia district to only 20 percent reported by agents assigned to the Buffalo, New York area. There was no pattern by type of district (rural, metropolitan) or region. In California agents in the San Francisco district passed 53 percent of all returns while those in the adjacent Los Angeles district found only 26 percent up to standard. Such differences add up to large differences between taxes IRS requests after audit from citizens of similar circumstances in the two areas. As Figure 1 and Table 1 graphically indicate such disparities as that found between the San Francisco and Los Angeles areas were common. While agents in Hartford, Connecticut, passed 50 percent of returns in the $10,000-$50,000 bracket, across the border in New York IRS agents OK'd only 33 percent in the Manhattan district, 29 percent in the Albany district, and only 20 percent in the Buffalo district. Wyoming revenue agents reported finding errors on all but 20 percent of the returns they examined in this income bracket, neighboring Montana agents found no errors on 65 percent of their returns. Again these differences mean that taxpayers are asked to pay differing amounts of tax depending upon where they happen to reside with the average tax adjustment IRS asks amounting to a 50 percent increase in tax, such differences are hardly inconsequential to the taxpayers involved. Major overhaul called for?-However one examines these IRS findings, a major revamping of our tax administration system seems called for. TABLE 1.—If all tax returns of individuals with $10,000-50,000 income were audited only the following percentage would meet with IRS's approval Source: Taxapayer compliance measurement program, phase III, cycle 4 (based upon a scientific sample of returns audited during fiscal 1973). If, on the one hand, we assume that IRS agents even with their conflicting answers figured the right amount of tax in reporting what amounts to half the returns filed by individuals incorrect and a 23 billion dollar revenue, gap then it seems clear that our present tax system is not working. Either because of ignorance of the law or the law's complexities except in a small proportion of cases IRS found tax fraud was not responsible even the most conscientious and well-intentioned taxpayer even with the aid of experienced tax accounts can't make out his tax return "correctly" and have better than a 50-50 chance of having it pass inspection at audit time. Such a conclusion would point to the need of a serious overhaul of taxpayer education and assistance programs conducted by IRS, and indeed an overhaul of the complexity in the tax laws. Yet, on the other hand, if we focus our attention on the disparity among IRS agents' findings, the conclusion we apparently must draw is that IRS's own audit program must be revamped for there is hardly any fairness in an audit program whose claims for added taxes from individual audited taxpayers are so tenuous that even IRS's own agents cannot agree among themselves. Such a system works a special hardship on the small taxpayer and businessman who have neither the resources nor the expertise to challenge IRS findings and therefore end up paying whether or not they in fact owe the additional tax. Secrecy in this instance has been used by the IRS to shield itself from criticism-yet it is the taxpayer and the tax system which has suffered as a result. For these IRS figures however interpreted seem to indicate that nothing short of a major overhaul is required. Such action however is blocked until the detailed findings from these studies are released and IRS is still adamant about withholding them not only from the public but from Congress and Congress's investigative arm, the General Accounting Office. Use of IRS seizures varies widely Not only has secrecy been used by the Internal Revenue Service to hide scientific findings showing gross inconsistencies in the standards IRS auditors apply, it is also being presently used to deny us access to similar information documenting tremendous differences in the use of levies and seizures by IRS collection officers across the country. While IRS is now refusing the release to us its statistics on the frequency of levies and seizures last year, earlier data we previously obtained for fiscal 1972 indicate that almost a million levies and seizures a year are conducted by IRS collection officers and the relative frequency of use varies enormously by what district in the country the collection officers come from. By way of background it is important to note that the IRS has been granted the legal authority to administratively seize almost any taxpayer's assetsone's bank account, salary check, home, car or business. Under the almost blanket grant of power by Congress, such seizures can take place without any effective notice to the taxpayer and without IRS even having to prove that the taxpayer indeed owes more tax. Few items are legally exempt from levy. It is IRS's practice, for example, to seize an entire paycheck and bank account of a taxpayer leaving he and his family without funds to pay for even basic necessities. To a small businessman, a threatened seizure may mean the loss of his business and his very means of livelihood. The IRS says, however, that even with nearly a million levies and seizures a year, that such extreme steps are only used as a last resort. Indeed, the collection officer has been granted the discretionary authority to allow a taxpayer to postpone payment, to work out a part payment or time payment plan, or to write off the account in full because of hardship. However, what must be emphasized is that the taxpayer has no rights to these alternative methods of payment. They are left solely at the discretion of IRS and the IRS revenue man assigned the case. How even handed is this discretionary authority applied? What emerges from IRS's own operating statistics is that whether or not your salary check or bank account, business, home or car, is grabbed by IRS should IRS contend you have fallen behind in your tax payments depends upon where you live and what collection officer is assigned your case. Variations in the reliance placed upon seizures by IRS collection districts are shown in Figure 2 and Table 2. IRS collection officers, for example, working out of the Albany, New York, district employ seizure methods on approximately 60 percent of the delinquent accounts they handle, while over in neighboring Buffalo, collection officers were successful in making similar collections while relying upon seizures or levies in only 28 percent-a ratio half as great. Similar differentials exists in all parts of the country. Collection officers in Little Rock, Arkansas, relied upon levies and seizures only 20 percent of the time, while collection officers assigned to work out of the Greensboro, North Carolina office used seizures 46 percent of the time. Out west seizures by Honolulu IRS personnel ran at a rate of around 21 percent, while in Phoenix. Arizona, the figure rose to 2 percent and in Anchorage, Alaska, reach 47 percent. To a family or businessman who have been subjected to the hardships imposed by an IRS seizures of their assets, these figures are much more than cold statistics. It seems grossly unfair for IRS to allow such seemingly inexplicable variations to exist on the one hand, and then attempt to hide them under the rug by refusing to release more recent and detailed statistics to the public. Cursory audits of some? IRS is also using secrecy as a convenient excuse to withhold basic policy decisions it has made concerning the future allocation of money and manpower among various competing functions in its operations, along with withholding the facts upon which these decisions have been made. With the public barred from knowledge of the policy decisions, as well as from the facts upon which these policies are predicated, no one can effectively question the agency's priorities. The IRS has adopted what it refers to as its "Long Range Plan" which sets forth its adopted goals, priorities and projected manpower allocations for the upcoming five years. Our requests to look at any portion of this or related docu- Yet data we obtained finally only through court order raise important ques- While the statistics showed that larger corporations have, on average, a higher |