July 10,2003

Baucus Concerned By Unapproved Reorganization of the IRS

Senator Urges for Proper IRS Protocol When Creating New Posts and Hiring Senior Staff

(WASHINGTON, D.C.) U.S. Senator Max Baucus recently raised concerns over actions taken by Internal Revenue Service (IRS) Commissioner Mark W. Everson to reorganize the agency without formal IRS Oversight Board approval.

In congressional testimony on May 20, 2003, Everson announced the creation of two new Deputy Commissioner positions, the elimination of the current Deputy Commissioner position, the creation of a Chief of Staff position, as well as a hiring new personnel for the positions of Chief Information Officer and Commissioners for Large and Mid-Size Business, Small Business/Self-Employed, and Wage and Investment Divisions. None of these actions had been formally reviewed by the Board, as required by law.

On June 23, Baucus, along with Finance Committee Chairman Chuck Grassley, sent a lette rto Commissioner Everson outlining their concerns and specifically citing the IRS Restructuring and Reform Act of 1998, which "was designed to ensure that any subsequent Commissioners did not precipitously reorganize the IRS as one of their first acts upon confirmation. As such, under section 1101, a specific management responsibility of the IRS Oversight Board is to “review and approve the Commissioner’s plans for any major reorga nization of the Internal Revenue Service.”"

Commissioner Everson recently responded in a letter to Baucus that he "did not regard the creation of the two Deputy Commissioner positions, and the appointment of individuals to those positions cited in your letter, as a major reorganization requiring Oversight Board approval under the statute."

After reviewing the Commissioner's letter, Baucus stated that he continues to be concerned that each time a new Commissioner is appointed to the IRS too many "deck chairs are rearranged," causing operational delays and lack of consistency.

"Fundamental changes to the organization of the IRS should only be made after comprehensive review with the IRS Oversight Board, not as a result of a few phone calls," Baucus said. "The Board did not even hold a meeting to discuss this major reorganization before the Commissioner went forward with the plan. I will continue to raise my concerns with the Commissioner and the Board to ensure that the letter and spirit of the IRS Restructuring Act is followed."