Reid speaks out against IRS abuses, questionable actions

Thursday, Sept. 25, 1997 | 10:19 a.m.

Sen. Harry Reid, D-Nev., weighed in today during the Senate Finance Committee hearings on IRS abuses, calling the agency "damaged beyond repair."

Reid, who sponsored legislation creating the Taxpayers Bill of Rights in 1988, submitted written testimony attacking the nation's income tax system.

"It is a flawed system which is broken, and I believe we need to start seriously exploring a new way to collect taxes," Reid said. "We have a system which rewards the lazy and hurts those who work. Our tax code is so complex that we have built up an entire cottage industry of financial planners to decipher it for us each year."

"Let's not be afraid to consider scrapping what we have in favor of something which will work for all of us," he said.

Reid described the IRS as a "huge, powerful bureaucracy with enormous control over American lives."

His Taxpayers Bill of Rights put citizens on more equal footing with the IRS, he said.

The bill guarantees taxpayers the right to have an attorney represent them before the IRS, requires the agency to explain to citizens their rights, forbids the IRS from using quotas for audits or property seizures and allows taxpayers to recover damages caused by the agency.

Reid pointed to several examples of IRS abuses in Nevada over the years.

"But perhaps one of the most outrageous IRS abuses I ever witnessed was the failed IRS sting operation known in Las Vegas as Project Layoff," Reid said.

Reid was instrumental in pushing congressional hearings in 1991 on the sting, which accepted millions of dollars in wagers between 1984 and 1985, but ended up costing taxpayers $600,000.

Project Layoff's failings were first disclosed in a series of SUN stories.

"Thousands of dollars went unaccounted for and the IRS attempted to cover up its mistakes and lie to investigating authorities," Reid said. "It was a classic example of how not to run an investigation, and the IRS' credibility was seriously impaired."

Reid added: "The door remains open for future improvements at the IRS, and I count on receiving ideas and suggestions from this committee to help make this agency more accountable to tax-paying Americans."