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13
Connecticut CPA
g
March/April 2017
paid advertisement
By Lauren M. McNair, Esq. and Eric L. Green, Esq., Green & Sklarz LLC
On July 22, 1998, former President Bill
Clinton signed into law the Reform Act
as a response to the overwhelming
dissatisfaction with the IRS expressed
by the American taxpayer. Represent-
ing the largest overhaul of the IRS
since the 1950s,
3
the Reform Act re-
quired the IRS to change its organiza-
tional culture, modernize, and improve
taxpayer protections rights. With a
new focus toward taxpayer service,
the Reform Act was intended to make
the IRS more user-friendly and to pro-
vide a greater degree of accountability
to taxpayers.
The transformation required changes
to almost every aspect of the organiza-
tion. First, the IRS reorganized from a
geographically based organization to a
customer-based organizational struc-
ture with four operating divisions: (1)
Wage and Investment, (2) Small Busi-
ness and Self-Employed, (3) Large and
Mid-Size Business, and (4) Tax Exempt
and Government Entities.
4
Second, the IRS developed a new
mission statement embodying its en-
hanced focus on taxpayer service,
with accompanying new measures of
organizational performance including
business results, customer satisfac-
tion, and employee satisfaction.
5
Additionally, new safeguards were
implemented to make certain that en-
forcement statistics were no longer re-
lied on as a basis for employee evalu-
ations. Finally, the IRS made progress
toward modernization by providing
expanded electronic filing, developing
a website with information directed to-
ward taxpayer assistance, and install-
ing a telephone routing system to an-
swer taxpayers in a more effective and
efficient manner.
6
Arguably, the most important changes
affected by the Reform Act concerned
heightened protections for taxpay-
ers. Included among these taxpayer
protections was a shift of the burden
of proof in a tax dispute from the tax-
payer to the IRS,
7
the creation of an
IRS Oversight Board,
8
the formation
of the Treasury Inspector General for
Tax Administration (TIGTA), and an en-
hancement of taxpayers' rights to sue
the government for civil damages.
9
Perhaps the greatest tool provided to
the taxpayer through the Reform Act,
though, was the creation of Collection
Due Process (CDP) hearings.
10
CDP
hearings provide taxpayers with an
independent review by the IRS Office
of Appeals (Appeals) regarding certain
proposed collection actions by the
IRS and were created to ensure that
taxpayers are aware of their rights re-
garding liens and levies. It also allows
taxpayers access to the United States
Tax Court if a taxpayer believes the IRS
abused its discretion in not providing
the taxpayer a collection alternative.
3
Treasury Inspector General for Tax Administration
Report, The Internal Revenue Service Restructuring
and Reform Act of 1998 Was Substantially
Implemented but Challenges Remain, Ref. No.
2010-IE-R002, March 1, 2010.
4
Id.
5
Id.
6
Id.
7
See Reform Act, supra note 4, at 3001, 112
Stat. 726.
8
Id. at 1101, 112 Stat. 691.
9
Id. at 3101, 3102, 112 Stat. 727, 730 (1998).
10
Id. at 3401, 112 Stat. 685, 746 (1998).
u