JCX-61-98-Description Of Tax Technical Corrections In The "Taxpayer Relief Act of 1998". Scheduled for Markup by the House Committee on Ways and Means on September 17, 1998. September 15, 1998

JCX-62-98-Estimated Budget Effects Of The "Taxpayer Relief Act Of 1998”. September 15, 1998

JCX-63-98-Distributional Effects Of The "Taxpayer Relief Act Of 1998". September 15, 1998

JCX-64-98-Description Of An Amendment In The Nature Of A Substitute To The Provisions Contained In H.R. 4579, The "Taxpayer Relief Act Of 1998". Scheduled for a Markup by the House committee on Ways and Means on September 17, 1998. September 17, 1998

JCX-65-98-Estimated Budget Effects Of An Amendment In The Nature Of A Substitute To H.R. 4579, The "Taxpayer Relief Act Of 1998". September 17, 1998 JCX-66-98-Description Of Provisions In H.R. 4738. Scheduled for Markup Before the House Committee on Ways and Means on October 9, 1998. October 9, 1998 JCX-67-98-Description Of Tax Technical Corrections Contained In H.R. 4738. Scheduled for Markup Before the House Committee on Ways and Means on October 9, 1998. October 9, 1998

JCX-68-98R-Estimated Revenue Effects Of H.R. 4738. Scheduled for Markup by the Committee on Ways and Means on October 9, 1998. October 9, 1998

JCX-69-98-Description Of An Amendment In The Nature Of A Substitute To The Provisions In H.R. 4738. Scheduled for a Markup by the House Committee on Ways and Means on October 9, 1998. October 9, 1998

JCX-70R-98-Description Of Provisions In S. 2622, The Tax Relief Extension Act Of 1998. October 10, 1998

JCX-71-98R-Estimated Revenue Effects Of S. 2622, The "Tax Relief Extension Act of 1998". October 10, 1998

JCX-72-98-Estimated Budget Effects Of H.R. 4738, As Passed By The House Of Representatives On October 12, 1998. October 13, 1998

JCX-73-98-Estimated Budget Effects Of Tax And Trade Provisions Of H.R. 4328, The "Omnibus Consolidated And Emergency Supplemental Appropriations Act, 1999". October 20, 1998

JCX-74-98 Summary Of Expiring Tax And Trade Provisions And Other Revenue Provisions Contained In H.R. 4328, The Omnibus Consolidated And Emergency Supplemental Appropriations Act, 1999. October 20, 1998

JCX-75-98 Summary Of Revenue Provisions Contained In Legislation Enacted During The 105th Congress. November 19, 1998.

1985

ATTACHMENT C.-Joint Committee on Taxation revenue estimate requests
Calendar year

No. of requests

348

To: Chief of Staff, Joint Committee on Taxation
From: Senior Refund Counsel

Subject: Refund Section-Operations Report January 1-September 30, 19981
This is a report on the more significant developments in this Office during this
period.

SUMMARY

Volume.-Refund Cases-439 reports were received during this period. The total dollar amount of refunds was $4,836,746,304.

1Includes 12 post review deficiency cases for 1995, 16 for 1996, 4 for 1997, and 3 for 1998. Post Review. The Service reports 64 large deficiency cases to us on an annual basis. During this reporting period, we received 44 of these cases and wrote 3 con

cerns.

Other Action. (1) We transmitted for consideration of legislative action 7 issues that arose in various cases.

(2) We transmitted memoranda suggesting the Service reconsider its position in two areas, and one memorandum alerting them to an issue of industry importance. Exhibits and Appendices provide detailed information on most of the foregoing. Errors identified by us in 1998 and prior years, and settled in 1998 produced a net reduction in refunds of $20.4 million. The average annual reduction for the last 8 years is $11.1 million. Such corrections also reduced ATNOLCF's, $46 million, AMFTC's $9 million, and regular tax credits $4.5 million. In addition, one joint committee reporter informed us of savings of $600,000 from corrections made before the case was submitted to us, that resulted from memoranda we had written in an earlier case.

1Pursuant to our discussions, our report will now be on a fiscal year ended September 30. This transition period will be a short nine-month period.

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

[From January 1, 1998 through September 30, 1998]

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

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

EXHIBIT IV.-1998 JOINT COMMITTEE ON TAXATION CONCERNS ON REFUND REPORTS FROM IRS 1

EXHIBIT IV.-1998 JOINT COMMITTEE ON TAXATION CONCERNS ON REFUND REPORTS FROM

Senator BENNETT. Thank you very much.

So, the budget does not include the $200,000 and three additional FTE's. Would you ask us to do that? That is not a lot of money.

Senator ROTH. I think my personal answer, Mr. Chairman, would be yes. I think that there is great merit in making a careful examination of the Internal Revenue Code. It would be a very, very considerable undertaking on the part of the Joint Committee, but I will have to tell you, the more I have looked into the IRS, the Tax Code, the complexity, the fact that different experts come out with different answers, it is critically important that we move ahead with reform.

Senator BENNETT. Well, I recall during the health care debate in the 103rd Congress I quoted James Madison on the floor when he said, laws must be understandable, and made the point that the 1,300 pages that were offered to us as the health care law were absolutely impenetrable. The then chairman of the Finance Committee, Senator Moynihan, took the floor and said, we have long since gone beyond the time when laws were understandable. Consider the Internal Revenue Code, which no one understands and which is three or four times as voluminous as the piece of legislation that the Senator from Utah is complaining about.

I think if we can resolve it for $200,000, we probably should do it.

Senator ROTH. I would be very supportive of that approach.

Senator BENNETT. I have to ask the standard question. You have a lot of hardware and software, a significant equipment budget, are your systems Y2K compliant? Have you dealt with that challenge? Ms. PAULL. Yes, our systems are. We currently produce lots of tables that include the year 2000 and beyond, and so we have already had a check-out and we are in good shape.

Senator BENNETT. I wish I could say that was the case for everyone who comes before us.

Senator ROTH. I think that is where our risk is, Mr. Chairman, when we do work with outside organizations whether or not they have made the necessary changes.

Senator BENNETT. All right. Senator Feinstein, I have no further questions.

Senator FEINSTEIN. Just one, if I may, Mr. Chairman.
Senator BENNETT. Sure.

Senator FEINSTEIN. Senator, just one quick question on the additional

Senator ROTH. Make it easy. [Laughter.]

Senator FEINSTEIN (continuing). On the additional FTE's. In your remarks, you mentioned three missions. One is the complexity analysis of the revenue provisions. I trust that means recommenda

tions for simplification of the Tax Code. The second is the annual report in connection with the hearings of the six congressional committees, and the third is the present law protections relating to disclosure and tax reform information.

Are those the three areas, or is there more for these people to do?

Senator ROTH. There is more. For example, a study is being taken and is to be available I think in July on penalties and interest. I think this is a critically important study because the number of penalties and interest are a major concern of mine, particularly in light of the complexity and lack of understanding of the Tax Code. People can work in good faith and try to do what is right or they may have made an honest mistake, and yet they are subject to significant penalties, as well as interest. I think this is a matter that cries for further study. There may be other matters.

SIMPLIFICATION OF THE TAX CODE

Senator FEINSTEIN. Is there now no kind of oversight, review process in the sense of recommendations for change?

Ms. PAULL. Well, part of the Joint Committee's mission is to look at the Tax Code and make recommendations on how to simplify the Code. We have a project going on right now and we have done several projects in the past to make some recommendations on simplification.

But the additional appropriations would be to cover all of the Tax Code, not just single out areas where we think priority attention ought to be given. So, it would be a much more comprehensive effort than we do today in trying to identify the worst parts of the Tax Code and make recommendations to address that.

In addition, we did absorb in our budget some of the duties that were given to us under the IRS restructuring bill, the two studies that were mentioned, as well as the complexity analysis and the coordination of the joint hearings. So, it is really this big effort, looking through the entire Tax Code and making a recommendation, that would really be a much larger undertaking than we could absorb in our budget today.

Senator FEINSTEIN. You are asking for this up to the year 2003, or this is a permanent addition?

Ms. PAULL. The comprehensive report is once every Congress. What we are asking for is an annual appropriation of $200,000 and three FTE's to devote those resources to that once-a-Congress report.

Senator FEINSTEIN. On an ongoing basis.

Ms. PAULL. That is correct.

Senator FEINSTEIN. Thank you very much.

Senator BENNETT. Let me revisit that. Is there any similar effort going forward in the Library of Congress Congressional Research Service?

Ms. PAULL. I am not aware of that, but the IRS restructuring bill does ask the IRS to perform a similar function on an annual basis. Their first report will be due March of the year 2000.

Senator ROTH. I think there is great merit in duplication. Senator BENNETT. I see a group of experts with different patrons