REVIEW OF THE CIVIL PENALTY PROVISIONS CONTAINED IN THE INTERNAL REVENUE CODE HEARINGS BEFORE THE SUBCOMMITTEE ON OVERSIGHT OF THE COMMITTEE ON WAYS AND MEANS HOUSE OF REPRESENTATIVES ONE HUNDRED FIRST CONGRESS FIRST SESSION ON RECOMMENDATIONS FOR CIVIL TAX PENALTY REFORM AND H.R. 2528 TO REVISE THE CIVIL PENALTY PROVISIONS OF THE INTERNAL REVENUE CODE OF 1986 FEBRUARY 21 AND JUNE 6, 1989 Serial 101-46 Printed for the use of the Committee on Ways and Means 98-498 U.S. GOVERNMENT PRINTING OFFICE WASHINGTON: 1989 For sale by the Superintendent of Documents, Congressional Sales Office 6 148SU XL 4/02 31150-200 NULB COMMITTEE ON WAYS AND MEANS DAN ROSTENKOWSKI, Illinois, Chairman SAM M. GIBBONS, Florida CHARLES B. RANGEL, New York RICHARD A. GEPHARDT, Missouri ROBERT T. MATSUI, California BYRON L. DORGAN, North Dakota BILL ARCHER, Texas GUY VANDER JAGT, Michigan PHILIP M. CRANE, Illinois BILL FRENZEL, Minnesota DICK SCHULZE, Pennsylvania BILL GRADISON, Ohio WILLIAM M. THOMAS, California ROBERT J. LEONARD, Chief Counsel and Staff Director PHILLIP D. MOSELEY, Minority Chief of Staff SUBCOMMITTEE ON OVERSIGHT J.J. PICKLE, Texas, Chairman BERYL ANTHONY, JR., Arkansas RONNIE G. FLIPPO, Alabama BYRON L. DORGAN, North Dakota HAROLD FORD, Tennessee CHARLES B. RANGEL, New York ANDY JACOBS, JR., Indiana DICK SCHULZE, Pennsylvania CONTENTS Internal Revenue Service, Hon. Lawrence B. Gibbs, Jr., Commissioner of Internal Revenue, Michael J. Murphy, Senior Deputy Commissioner, Rich- ard Stark, Assistant to the Commissioner, and Damon O. Holmes, Assistant U.S. Tax Court, Hon. Arthur L. Nims III, Chief Judge, and Hon. Lapsley Walker Hamblen, Jr., Judge, Chairman, Legislative Committee..... Dow Chemical Co., Glenn W. White, statement Insurance Companies, Ad Hoc Group, statement. Investment Company Institute, statement and attachment... Johnson, Calvin H., University of Texas Law School, statement. Wolfman, Bernard, Harvard Law School, letter and attachments U.S. Department of the Treasury, Dana L. Trier, Tax Legislative Counsel....... Internal Revenue Service, Michael J. Murphy, Acting Commissioner of Inter- nal Revenue, and Damon O. Holmes, Taxpayer Ombudsman U.S. Tax Court, Hon. Arthur L. Nims III, Chief Judge, and Hon. Herbert L. |