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TOP JOBS

Most American taxpayers likely give little thought to who heads the Internal Revenue Service but, for a significant number who experience tax problems the attitude set by the top official is highly important.

So the U.S. Senate approval of Douglas Shulman as President Bush’s appointee to take the reins at the Internal Revenue Service earlier this year is drawing attention and analysis. Shulman replaces Mark Everson, who stepped down last year.

Everson served in the post five years after reportedly being hired to “put the teeth back into the IRS,” wrote Dan Pilla, a nationally known tax litigation consultant and author, in an article for Budget & Tax News. He did that in what Pilla referred to as “The Darth Vader approach to tax collection.”

An examination of Shulman’s background and record provides hope for more evenhanded treatment in handling outstanding tax problems, Pilla suggests.

Cited as an important element of Shulman’s resume is his service on the National Commission for Restructuring the IRS. Formed in 1997 as a result of mounting pressure on Congress to deal with growing IRS abuses and the fallout of an impossibly complex tax system, Shulman was senior policy adviser for the group and later its chief of staff.

That experience should bring a fresh perspective to the IRS at a time the agency has been returning to heavy-handed tactics remindful of the kind that caused Congress to establish the commission. In his role with the commission, Shulman was directly involved in some of the most significant pro-citizen changes to the tax system in 80 years, Pilla pointed out.

On that list are: Establishment of the collection due process appeal rights; expansion of innocent spouse relief; imposition of the so-called “10 deadly sins,” the prohibited acts that could lead to the firing of an IRS employee; and removal of the Office of the Taxpayer Advocate from enforcement management chains of command.

Asked whether his administration would emphasize taxpayer service or law enforcement, Shulman said at Senate hearings, “to be forced to choose between the two is a false choice. In order to execute its mission, the IRS must do both.”

“For taxpayers who pay their taxes willingly and on time, which is the great majority of Americans,” he added, “there must be clear guidance, accessible education and outstanding service. Our aim should be to make it as easy as possible for them to pay the correct amount of taxes in the most efficient and least burdensome manner possible.”

But he cautioned, “For taxpayers who intentionally evade paying their taxes, there must be rigorous enforcement programs,” adding, “Whether serving taxpayers or reinforcing the law, it is absolutely essential that Americans believe the IRS is fair and that it respects the rights of all taxpayers.”

Pilla said these statements draw a stark contrast between Shulman and former IRS Commissioner Margaret Richardson on the subject of the continuing friction between taxpayer service and enforcement of tax laws, adding, “Richardson was the IRS head during the 1990s when the IRS was by all accounts out of control.”

Shulman’s confirmation likely doesn’t mean a return to the days of the “kinder and gentler” IRS, Pilla observed. He suggest he falls into more of a middle ground between Richardson and Charles O. Rossotti, who served five years beginning in 1997 and implemented the changes brought by the Restructuring Act.

The new commissioner’s experience with the Restructuring Commission is rated a positive because it provides him with an awareness of the far-reaching damage caused by out-of-control tax collectors.

That background provides hope for more emphasis on evenhanded treatment in the resolution of outstanding tax problems, and could ease the “just squeeze them harder” mindset.