When Tony Infanti and Phil Hackney approached Les and me about partnering between Procedurally Taxing and the Pittsburgh Tax Review for an edition on tax procedure, we decided fairly quickly to focus on the 25th Anniversary of the Restructuring and Reform Act of 1998 (RRA 98). As we talked about people who were involved in RRA 98 in a significant way and who are still involved in tax procedure, I thought it would be interesting to have them write about their personal experiences. Instead, we got something better, these individuals reflected on the legislation from a policy perspective with their deep knowledge of both tax procedure and the history of what happened in 1998 and the years leading up to the legislation.
I wrote an article about Section 1203 of the legislation which bothers me because it was a very personal slap at the employees of the IRS and not really at the people who shape the tax laws and policies that seemed to aggravate Congress. IRS employees are probably the most rule following group of federal employees around. If the policy makers can craft the right rules, the IRS employees will follow those rules – for better or worse. You can see a discussion of my article here.
In addition to writing a policy article, I took the opportunity to write about my personal experiences during the period immediately before and after RRA 98 as an attorney in IRS Chief Counsel’s Office. My post today highlights those experiences.
One of the highlights for me of my experiences during the RRA 98 period and one I do not write about in the article was the opportunity to occupy the office of the former Chief Judge of the Tax Court. Many readers may not realize that for a long period of its history which will be highlighted next year as it celebrates 100 years, the IRS national office headquarters at 1111 Constitution Avenue served also as the location of the Tax Court. When Congress elevated the Tax Court to an Article I Court in 1969, the Court felt a need to physically divorce itself from the IRS in order to demonstrate its independence. That separation resulted in the construction of the current Tax Court building in the Judiciary Square section of Washington, DC a few years later.
During the time the Tax Court was co-located with the IRS, it occupied much of the second floor of the building at 1111 Constitution Avenue and the Chief Judge had an office at the corner of 12th and Constitution immediately below the office of the Commissioner. The offices of the Chief Judge and the Commissioner are quite large and come with their own private half bath. Both offices have nice views of the Washington Monument and other buildings on the National Mall. I occupied the office during the fall of 1998 while I was on assignment as the head of the General Litigation Division. It was, by far, the best office I ever occupied.
That office was one of the “rooms” where RRA 98 happened for me. In a short article in the Pittsburgh Tax Review, I recount four episodes from that period that were particularly memorable. I will briefly mention them in this post. Read them in greater detail here.
Senate Testimony
Senator Roth and the Senate Finance staff chose 10 IRS collection cases that appeared abusive and subpoenaed the IRS employees to come to the Senate and testify about those cases before Senate staffers who were looking to pick cases for testimony before the Finance Committee. The first case up before the staffers was a case from Virginia where I was the District Counsel back in the days when the IRS operated geographically with districts around the country. The District Director asked me to look into the case to determine if the IRS had done something wrong and later asked me to accompany the four employees from the district on their trip to the Hill.
Working with my colleagues in the Richmond office, John McDougal and Chris Sterner, I didn’t find anything wrong with the way the IRS had handled the case. Ultimately, I think the Senate staffers agreed but going to the Senate and representing clients at the preliminary hearing was a memorable experience. It certainly heightened my interest in all that was to follow in this legislation.
The Call from the Chief Counsel
As the legislative process heated up it became clear that the collection practices of the IRS were at the heart of the concerns on Capital Hill. One day I received a call from the Chief Counsel, Stuart Brown, asking me to draft proposed legislation that would improve the collection provisions of the code without crippling the ability of the IRS to collect. Chris Sterner and I spent a frantic few days drafting 25 proposed changes to the code six of which made it into the legislation. None of our proposed changes were earth shattering but the process was quite memorable.
The Case with Nina Olson
Most of you know Nina as the long serving National Taxpayer Advocate but before she assumed that role she founded and ran the Community Tax Law Project (CTLP) in Richmond. She started CTLP not long after I became the District Counsel in Richmond. My office and I worked with her on many cases as CTLP represented low income taxpayers in Virginia. One of the cases resulted in an offer in compromise, but Nina did not like my view of how much a taxpayer should pay in order to receive a compromise. After we resolved the case, she testified before Congress about how unfair the compromise provisions were to low income taxpayers and persuaded Congress to change the law to eliminate the IRS’s ability to reject an offer solely on the basis of the amount of the offer, a provision that is found in Section 7122(d)(3)(A).
The Aftermath of RRA 98
Following the passage of RRA 98, it was clear that the IRS needed to publish a significant amount of guidance. Much of that guidance needed to be written about the collection provisions of the code. The new Collection Due Process (CDP) provision was the law that created the largest change in the way the IRS operated. (As part of this series, stay tuned for additional blog posts from Les and Bryan Camp that offer differing perspectives on the value of CDP). Writing the regulations for this somewhat radical change to the collection provisions of the code, created the biggest challenge.
I had the opportunity to go from Richmond to DC to temporarily occupy the position at the head of the General Litigation Division. I worked with the attorneys in that division to write the CDP and other regulations working during a very compressed time period. During this time I occupied the office I described above. Because of the long hours worked to get out these regulations I became more familiar with that office than I might have preferred.
Conclusion
A quarter century later the time surrounding the passage of RRA 98 still stands out to me as a critical period of my legal career. The laws passed during that legislation provided some good and some less good changes to the way the tax system operates. The articles in the recently published edition of the Pittsburgh Tax Review give you an opportunity to reflect on those laws and for any readers old enough to have practiced before RRA 98 to remember the way it was.