treatment impossible in so short a time. My statement is based upon my twin obligations as a Member of Congress to represent and protect the people of my State and to work for the best interest of all America, and also as chairman of the Association of Concerned Taxpayers, a grassroots organization dedicated to reform of the collection practices of the IRS.

My reasons for being here began in 1976 with the unacceptable IRS behavior in arbitrarily extracting capital gains taxes from Federal reimbursements to flood victims of the $400 million Teton Dam disaster in Idaho. I guess I am a little like Mr. Young, the interest in IRS problems comes from problems in my own district. This scene set in motion a torrent of events almost too shocking to believe. My ad hoc inquiries uncovered IRS hit lists, snooping and spying operations, political retaliatory audits and investigations coupled with election year leaks to the press, arbitrary assessments and seizures for punitive rather than tax collection purposes, and a fully planned operation to conduct an armed door-todoor shakedown of one of my small cities.

Needless to say, as my inquiry progressed, it came to have consequences of its own, political retaliation against a nosey Congressman. Inaccurate tax information from my personal files was illegally given by IRS officials to my political opposition in the final days of the 1976 general election-a fact confirmed later by an IRS officer who voluntarily confessed his part in the activities and by other IRS employees shocked at the blatant activities of certain IRS administrators in attempting to rig the outcome of the Federal election.

Further inquiry into complaints of IRS abuses continued to produce shocking results-it was really happening, and on a wholesale basis, and in all areas of the Nation. Until I began to receive largescale complaints and admissions by IRS agents themselves and the multiplying testimony of constituents and friends across the Nation whom I had known all of my adult life, I too had shrugged off complaints against the IRS as unrelated and unintentional mistakes or as the natural resentment of people to paying taxes.

In fact, for many years I resisted any idea that the IRS would be systematically involved in a mass intimidation program of the American public. But now the complaints are too numerous, too credible, too well documented to continue to accept the word of IRS witnesses who have for decades been parading to Capitol Hill to simply lie to this committee and others-to tell all who would listen that the complaints of IRS abuses were those of disgruntled malcontents, and lately to try to sell the idea that everyone who complained was a "tax protester."

Unfortunately until now, the IRS has succeeded in turning the chorus of complaints into a reason for ever-tightening statutes and regulations, and more enforcement agents, thereby heaping more abuse on the already outraged taxpayer.

Now let me make a few points about this IRS technique of categorically damning any taxpayer who complains. First, and most important, any protest at all in the area of tax collection must be viewed with the greatest care-especially since those who voice it know in advance that the IRS is notorious for punishing those who raise their voices in complaint.

When a citizen complains about the Service, he knows that he does it under the expectation that he will pay the price to the IRS. Yet despite that, the volume of protest has risen to a crescendo. A common characteristic of the mail I receive in protest of IRS behavior is that many of the writers who indignantly pass on their horror stories express fear of retaliation and ask for anonymity. Others announce that they know the cost of defying the IRS "code of omerta" and speak anyway.

The volume and intensity of these complaints bespeak a situation which simply cannot any longer be shrugged off.

Now, there is a second point which must be made clear at the outset. Many of these complaints are made by people who do in fact fail to pay income taxes. As a lawmaker, I certainly do not condone lawbreaking and nonpayment of taxes. Every citizen should bear his fair share of the cost of Government. But I do say that tax protest and even tax evasion, as well as any other apparent violation of the law, does not remove from people their right to fairness and the procedural due process of law.

However, the philosophical protester and the taxpaying complainer with a legitimate problem are not getting that fairness or due process-and, in fact, they are generally considered as tax evaders and enemies of the IRS with guilt and punishment predetermined and enforced by the IRS itself.

The rapidly increasing number of complaints must raise a question in our minds. Twenty, or even ten, years ago, such a volume of complaint would have been unthinkable. Could they be sending us a warning that the American people are no longer willing to tolerate abuse from the tax collector? Have the yoke of excessive taxation and wasteful spending, and the whip of brutal collection practices at last become too much for them to tolerate? The numbers say yes.

The IRS tells you that the number of tax resisters is increasing yearly and that, given only more oppressive laws and more men to track down these terrible people, they can solve the problem. A moment's reflection will tell you that such a claim is nonsense-yet we in the Congress have continued to blindly listen to the IRS and ignore the people.

The IRS is like the man whose large car was hopelessly mired in a ditch and he was found by a passerby to have yoked a small dog to the front of the car. When he was asked how he could expect a tiny dog to pull that huge car out of the ditch, the owner's response was, "Don't worry. I've got a long whip." It is absurd, but that is what is going on.

Other numbers give us the real dimensions of the problems. IRS tells us that the so-called underground economy is running at $180 to $200 billion a year, depending on which ax-grinding speculator is testifying. An economist at the University of Wisconsin puts the figure at $500 billion and recently an economist at a leading eastern university puts the untaxed economy at a trillion dollars. What is clear is that the sum is staggering and that no one knows for sure how large it really is.

Members of the committee, in the past 2 years, I wrote a book, basically simply telling the worst of the horror stories which could be verified by one Congressman with the limited staff at his dispos

al. The abuses I include in that book horrified me. Yet I watched the IRS tell the Congress that whatever truth there was to these taxpayer narrations was irrelevant because the IRS had since recognized that such practices were not right and that they had cleaned their own house and such things could not and would not happen again.

But the complaints kept rolling in and time after time I found that in this as in so many other matters, the IRS was committing objective perjury.

One example will make my point. In 1977 there was a great furor of indignation when reports of an incident in my colleague Congressman Don Young's State of Alaska made the national press. A young and pregnant woman who had locked herself in her car had been subjected to assault by the collection agents of IRS who smashed the side window of the car, showering her with glass and dragged her through that broken window. Pictures of the agents using clubs on the car were widely circulated. The IRS could not deny the incident, so the Congress was told that this was an isolated incident and that the manual had been revised to forbid such conduct in the future.

But such acts of violence did not stop there. In 1981, during a strike by a score of armed IRS agents in Craig, Colo., a small town. in the northwest corner of the State, a young lady drove into town from her home in the outlying suburbs. When she stopped on a narrow side street, she was dragged from her car by IRS agents, who without showing any authority of any kind, drove off with the car, leaving her stranded. To make the parallel complete, she too, was several months pregnant.

The incidents are strikingly similar and, coupled with other similar parallelisms, certainly raise questions about the good faith of IRS officials whose statements clearly fail to square with the facts. For years the IRS has conducted activities contrary to what it tells Congress and an example I have just cited is only a hint of the cloud of misrepresentation with which the IRS surrounds itself. This was further borne out recently when the IRS asked for an increase in its budget in order to hire 7,000 more collection agents. Such generosity was to be rewarded, we are told by IRS Commissioner Egger, with a flow of between $78 and $90 billion from recoveries from dishonest taxpayers.

We were also advised from the same source that the entire underground economy was only $200 billion and would produce only $30 billion in unpaid taxes. I urge the members of the committee to apply the same standards of commonsense to such allegations as we normally apply to all other matters.

It is in some measure as a response to the heavyhanded approach of the IRS that the underground economy exists at all. The facts clearly demonstrate that continuously applying more coercive force in our voluntary personal income tax system has only served to worsen the problems of hidden cash economics, tax resistance, and the decline of public confidence in the Government of the United States in this and other areas.

This is alarmingly demonstrated by recent figures contending that uncollected annual U.S. Government revenues from the underground economy have moved in recent years from $30 billion to

$95 billion, with an expected $150 billion by 1985-a trend which has to engender some concern that the current method of assessing and collecting income taxes is collapsing.

It is in the context of the false political assumption, that the public's adverse response to the amount and manner of collection of taxes is a peripheral issue, that I must strongly state my belief that the abuse of the taxpayer by the IRS and the formulas of apportioning the burden of taxation are indeed central to the problems of financial solvency of the Federal Government.

Even the IRS cannot repeal the law of diminishing returns. The greater the coercion, the more the people are withdrawing into the unrecorded segment of the economy.

LIMITATIONS ON WITNESSES

Mr. Chairman, I hope by now this committee is convinced that there is a grave problem in the methods used by the IRS in collecting the taxes imposed by the Congress-methods which pose a real danger to the free society we have enjoyed until now. I am convinced, based upon my own research and upon the flood of complaint mail which I have been receiving for the past 2 years since people across the Nation became aware of my probe into IRS abuses, that the gravity of the problem is accelerating and that the reaction to increased IRS pressure has been and continues to be an expanding resistance by citizens to the methods used by the tax collector.

With that situation in mind, and as you know, Mr. Chairman, I have pressed this subcommittee for some time to launch an investigation and to hold hearings at which people could inform the members of their own unhappy experiences with the IRS. At the risk of appearing ungrateful for this hearing, let me again voice my view that 1-day hearings which limit witnesses to a few minutes of testimony are really not adequate to reach an understanding of the depth of popular revulsion to IRS excesses and consequently the need for limitations on the techniques of collecting taxes.

Despite clear signals from the people that the tolerance point has been reached and exceeded, the Congress continues year after year, either explicitly or by ignoring the complaints of the people, to not only countenance these excesses, but to worsen them. We need only look at the shelves of any reasonably equipped library to realize the depth of the problem.

Title 26, the Internal Revenue Code, is in three volumes in West's United States Code Annotated [USCA]. The regulations in the Code of Federal Regulations [CFR] run to 10 volumes. By contrast, the entire Criminal Code fits in only one volume and includes every crime one can commit against the United States.

Since the time of Plato, philosophers have told legislators that there are certain requirements for positive law. The first is that the source of the law must be certain. Is all this, and I say "law" that the citizen is victimized by, enacted by Congress or is it formulated by the IRS? In many cases the taxpayer rightly suspects that the Congress had nothing to do with the laws he must obey in tax matters.

11-243 0 - 83 - 2

The other crucial element of law is that it be clear, that it be easily comprehensible to the person within its jurisdiction. I certainly do not need to remind my colleagues of their comprehension of the tax law. And yet none of us would propose that our constituents are generally better informed than we on these same laws.

The combination of arbitrary law enforcement and a complexity so great that not even the tax lawyer or the accountant will guarantee that returns, prepared in good faith and with every attempt to obey the law, will pass muster with IRS can only breed contempt for the law. In fact, many people have complained to me that the tax collector has openly and brazenly stated that the tax law is just what the IRS says it is.

When the complexity of law is compounded with an arbitrary use of power, can we really be surprised that the people are finally rebelling? I cannot overemphasize the necessity for this committee to listen attentively to the complaints presented here today, and study both the oral statements and the written material submitted by desperately concerned people who could not afford to come thousands of miles for the futility of a 5 minute appearance.

However, for those who are able to testify personally, I appreciated receiving the chairman's recent letter assuring that a waiver of the rights of a witness will not be required. Certainly, it would be a bizarre miscarriage of justice to require a man to forfeit his rights to the Congress to protest the loss of those very rights to the IRS. To set the record straight, Mr. Chairman, my attack on the IRS is not motivated by vengeance for what they may have done to me, but for a fair and effective tax system which will properly fund the operations of government and still guarantee that the taxpayer is treated responsibly in collecting his equitable share of that cost.

I have on previous occasions testified before this committee with detailed complaints about illegal IRS hit lists, spy files, seizures, liens, searches, religious oppression, and armed raids. This testimony is available in your files and will not be repeated here today in the interest of time and because significant new areas of abuse have been uncovered which need to be discussed.

However, I hope this committee will review the earlier testimony which is still very valid along with the material in exhibit folders A and B which include documentation of wholesale violations of law and citizen rights by the IRS.

I must emphasize also that the violent ways of the IRS, where violence is not justified, cannot be excused by that agency as an aberrational phenomenon, because it is now happening everywhere and with increasing frequency and intensity. Death is on the doorstep of the IRS and they seem hellbent to make it happen.

From the armed raid plan on my small city of St. Anthony, Idaho, the violent ways of the IRS have dragged pregnant women from their cars in Alaska and Colorado, used 40 armed men to capture a nonviolent Amish family in Maryland, sent a team of 9 armed men to improperly seize from equipment from private property in Casper, Wyo., conducted an armed mass seizure raid on Craig, Colo., and the list goes on.

The seizure operation was so bad in Colorado that a U.S. Federal court ordered property returned, and the general abuse of citizen rights has provoked an active and ongoing investigation into IRS