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ATTACHMENT D.-CONGRESSIONAL REQUEST AND REPLY DATA 1—Continued

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Subject: Refund Section Calendar Year 1998 Operations Report

This is a report on the more significant developments in this Office during the past calendar year.

SUMMARY

Volume.-Refund Cases 602 reports were received during the year. The total dollar amount of refunds was $6,101,259,628.

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1 Includes 8 post review deficiency cases for 1994, 12 for 1995, 16 for 1996 and 4 for 1997. Post Review. The Service reports 64 large deficiency cases to us annually for post review. Four of these cases generated concerns this year.

Other Action.-(1) We transmitted for consideration of legislative action 10 issues that arose in various cases.

(2) We transmitted 2 memoranda suggesting corrections were needed in computer programs to ensure correct reporting of tax liability.

Exhibits and Appendices provide detailed information on most of the foregoing. Errors identified by us in 1997 and prior years, and agreed to by the Service in 1997 produced a net reduction in refunds of $14.3 million. The average annual reduction for the last 7 years is $9.8 million. Such corrections also reduced ATNOLCF's, $355.9 million, AMFTC's $23 million, and regular tax FTC's $8.5 million. In addition, one region informed us of savings in excess of $20 million from corrections made before cases were submitted to us, that resulted from memoranda we had written in earlier cases.

We hope that in spite of our decreased staffing we are satisfactorily accomplishing our assigned portion of the Committee's mission and meeting your expectations. We look forward to a productive, challenging year.

EXHIBIT I-REPORTS TO JC AS REQUIRED BY IRS CODE SECTION 6405

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EXHIBIT I-REPORTS TO JC AS REQUIRED BY IRS CODE SECTION 6405-Continued

[Calendar year 1997]

August

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November

December

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EXHIBIT II-JOINT COMMITTEE CASES RECEIVED IN BY TYPES OF TAXPAYER AND SOURCE-1997

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EXHIBIT III-JOINT COMMITTEE MONTHLY RECEIPTS-REFUND REPORTS FROM EXAMINATION AND

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EXHIBIT IV. 1997 JOINT COMMITTEE ON TAXATION CONCERNS ON REFUND REPORTS FROM IRS

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EXHIBIT IV.-1997 JOINT COMMITTEE ON TAXATION CONCERNS1 ON REFUND REPORTS FROM

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1 Number of Concerns does not include 4 on deficiency cases and 1 on a Justice case.

Senator BENNETT. Thank you, Mr. Chairman. We are appreciative of your efforts to be fiscally responsible and hold down your expenses, and this committee is particularly appreciative of your focusing on our request of last year dealing with requests for estimates from those who are not members of either the Ways and Means Committee or the Finance Committee.

We had something of a wrangle in the subcommittee with your predecessor over this issue, and I at least know of Lindy Paull's background and great talent. I think you have made a very wise choice

Senator ROTH. Thank you. I think so, too.

Senator BENNETT [continuing]. In putting Ms. Paull in this assignment.

I will note the percentage, at least, of response to requests for estimates has gone up from the 104th Congress to the 105th Congress on the part of members of the tax-writing committees. It has unfortunately gone down with respect to other members, and that was the source of the concern we had last year.

You undoubtedly read the language that we put in the conference report. The conferees expect the Joint Committee to be both responsive and timely in its responses to Members of Congress who do not serve on the revenue committees. It is the intent of the conferees to carefully monitor the responsiveness of the Joint Committee to determine if statutory language will be required next year. The wrangle was, are we going to force the committee to accept additional FTE's with the understanding that they would be dedicated solely to responding to Members of Congress who are not members of the tax-writing committees?

Your predecessor said, give us 1 year to prove ourselves, and interestingly they did not say, give us the additional people. They were willing to give up the additional people in order to avoid the restrictive language.

As I say, statistically the responsiveness has gone down. I think the one area that is statistically the largest decline is the House non-Ways and Means Committee Democrats which went from 62 percent replies in the 104th Congress down to 55 percent in the 105th, and others, although the number is very low, 80 percent reply in the 104th has gone down to 62 percent in the 105th.

The Senate non-Finance Committee Republicans are the second group that has had the biggest decline, from 68 percent in the 104th down to roughly 60 percent in the 105th.

I am willing to accept your assurances of focus on this issue, again as an expression of my confidence in Ms. Paull and her background and history in working with Members of the Senate, but we will, true to the comment in the conference report, continue to monitor this very closely because it is a matter that we have heard

from other Members of Congress about, and we would be derelict in our duties if we did not stay on top of it.

Senator Dorgan, do you have any questions?

Senator DORGAN. Mr. Chairman, I think the budget request is very reasonable and it reflects some real prudence here. I served on the House Ways and Means Committee for 10 years, so I know a fair amount about the service given Members, especially tax committee members, by the Joint Committee on Taxation, and I also know that there is a fair part of the year when they work literally day and night, and they do not have a huge staff, but they put in about as many hours as anybody on Capitol Hill during certain periods, and I have always deeply appreciated the sacrifice and the effort they make.

I think the expression that we made last year as a subcommittee was very important, however. I discovered that there are several stages of responses. Chairmen of the House Ways and Means Committee and the Finance Committee always get immediate responses.

Members of the tax-writing committees get pretty good responses, and other Members had a little more difficult time, and I think all we were trying to say was that Members not able to serve on the tax-writing committees also need that service, and I think what we did last year and your response to that has been helpful and thoughtful, and we very much appreciate it.

Senator ROTH. Mr. Chairman and Senator Dorgan, I appreciate what you are saying and fully agree as to the importance that everybody have access. I have some of the same experiences sometimes with CBO, so I know of what you speak.

Senator BENNETT. You want us to pass that on to CBO when they appear for their appropriation?

Senator ROTH. You might give them a nudge.

But let me say that Senator Dorgan is 100 percent correct when he talks about the workload on these people. First of all, I think we are very fortunate in being able to maintain the quality personnel that we have and the fact that they work day and night at times I think is not understood or appreciated on the part of many, so I would just like the record to reflect that we are fortunate in having a group of economists, accountants, and lawyers that do great work, and we will certainly try to watch this and make sure that there is fair access to everybody.

Obviously, when there is a markup and some of those situations, a priority is established, but if you have any problems during the year I would hope both of you gentlemen would call it to either Lindy or my attention.

Senator DORGAN. Could I ask one additional question?

Senator BENNETT. Surely.

Senator DORGAN. This is one of the areas in which institutional knowledge I think is critical. To the extent that you have people on your staff who are permanent and have been there a long while and understand not only what happened last year but 5 years ago and 20 years ago in some of these difficult tax issues is very important, and we are going to have testimony a little later this morning by the Congressional Research Service in which they are concerned

about the retirements that will occur, and what it will take away from their agency in terms of institutional knowledge.

Have you taken a look at your staff? Is your circumstance such that you have a pretty good feeling about the continuation of institutional knowledge, given the permanent staff you have?

Ms. PAULL. We have quite a few members of our staff who have been on the staff for at least a decade and then we have a mix of people. We have a few senior people who have been on even longer than that, so we do have really good institutional knowledge, a very high quality professional staff, and we will try to maintain that.

Senator DORGAN. Thank you very much.

Senator ROTH. I asked Lindy to introduce some of our top people who we have here.

Ms. PAULL. We have some of our top people here. Mary Schmitt, who is in charge of all our legal staff, and Bernie Schmitt, who is in charge of our economic and revenue-estimating function, and Michael Boren, who is our top administrator.

Senator BENNETT. Thank you very much. Very good. Thank you, Mr. Chairman. We appreciate your efforts and congratulate you again on your choice of a chief of staff.

Senator ROTH. I appreciate that. Thank you.
Senator BENNETT. Thank you very much.

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