Clinton curbs tax agency power

President Bill Clinton yesterday announced plans to 'reinvent' the tax agency and rein in overzealous revenue collectors. As Mary Dejevsky reports, he was trying to quell a growing public outcry against the most feared and detested institution in the United States.

This was one of the very few occasions in Bill Clinton's presidency when he was late - and he knew it. Normally a consummate judge of the popular mood, he had spent the past two weeks seeming to protect the Internal revenue Service (IRS) from charges that it was callous, malicious and out of control. Yesterday, he said he was introducing a package of 200 measures to make the IRS more accountable and responsive to taxpayers' complaints.

The measures include the abolition of targets for the amount of tax to be collected by individual IRS offices, an extension of payment deadlines for people with health problems, the formation of local appeals boards, and a new board of trustees with a private sector majority to "ensure service every bit as good as in the private sector".

Mr Clinton said, somewhat defensively, that he believed this was "the right way" to reform the agency, his only allusion to calls for the abolition of the IRS following revelations of abuses at recent congressional hearings. The three-day hearings had produced a torrent of bitter complaints from small businesses and families about what they saw as vindictive and even unlawful treatment by the IRS.

The IRS is one of the few institutions in the United States which can cow the most rights-conscious Americans. Those testifying at the hearings spoke of an agency with "unbridled power" that behaved as "judge, jury and executioner". Some broke down as they told of families ruined by "the one court in the land where you are guilty until proven innocent".

While acknowledging the justice of many complaints, Mr Clinton had initially defended the overall integrity of the service - a move that allowed exultant Republicans to call for the wholesale overhaul, if not abolition, of the IRS and the present tax code.

The changes announced by Mr Clinton yesterday - for a modest reform of the status quo coupled with enhanced taxpayers' rights - were dismissed by Republicans as inadequate.