April 5, 1994, Tuesday, Final Edition

SECTION: Part A; COMMENTARY; Pg. A15

LENGTH: 935 words

HEADLINE: Seeking equal rules for the taxpayers

BYLINE: Jim Bovard

BODY:
This April 15, hard-working Americans will once again be forced to run a
gauntlet of IRS regulations, penalties and bureaucratic incompetence.
Unfortunately, the federal government follows diametrically opposed practices
depending on whether it is taking or giving. Welfare recipients today often
have a stronger legal right to their welfare benefit than workers have to their
bank accounts. Sen. David Pryor, Arkansas Democrat, is proposing legislation
to remedy this imbalance by sharply increasing taxpayer's rights in dealing with
the Internal Revenue Service.
The Washington Times, April 5, 1994

Welfare recipients are entitled to a fair hearing before the government can
terminate their benefits, thanks to a 1970 Supreme Court decision. On the other
hand, the IRS can impose a lien on an individual's property with little or no
evidence of a person's wrongdoing. In a welfare termination hearing, the
welfare recipient is presumed deserving of continued handouts unless the
government shows evidence that the person should not be on the dole. But in the
U.S. Tax Court a worker is presumed guilty of receiving any unreported income
the IRS alleges he received - even if the IRS has no evidence for its
accusations.

In 1988, Congress enacted the Computer Matching and Privacy Protection Act
to require states to independently verify all computer-generated information
before acting to suspend, reduce or revoke federal benefit payments. But no
such restriction limits the IRS. Money magazine reported that IRS mails more
than 5 million incorrect or unjustified tax penalty notices to citizens and
businesses each year. The IRS fails to correct its computer data bases partly
because the IRS benefits from its errors, since many intimidated citizens pay
the government's unjustified demands without protest.

It is inconceivable that a federal social program would promulgate
retroactive regulations and then force welfare recipients to pay back a portion
of the benefits they had received during the previous years. Yet as part of
The Washington Times, April 5, 1994

the 1993 tax-increase legislation, the Clinton administration imposed almost $9
billion in retroactive taxes - even raising the estate taxes on people who had
already died. The IRS itself has issued numerous retroactive tax regulations.
Mr. Pryor's bill would end the IRS's power to retroactively impose taxes; the
IRS staunchly opposes the proposal.

If welfare recipients have a dispute with a welfare agency, they can often
avail themselves of federally funded Legal Service Corp. attorneys willing to
take their case for free (or, more accurately, at taxpayer expense). But the IRS
routinely refuses to reimburse a private citizen's attorney fees even in cases
in which courts find the IRS had no justification for its attack on a taxpayer's
paycheck or banking account.

There is rarely as much attention given to enforcing work requirements on
able-bodied welfare recipients as there is to enforcing tax obligations on
workers. The government, through payroll withholding, effectively imposes a
prior lien on the incomes of workers. But study after study shows that workfare
programs for welfare recipients are largely symbolic gestures to placate
political criticism of welfare programs. Congress with great fanfare enacted a
workfare-job training requirement for welfare recipients in 1988 - yet 80
percent of the women required to participate are not in training or work
programs.
The Washington Times, April 5, 1994

While the IRS often takes extremely restrictive views on permitting
taxpayers to deduct legitimate business expenses (such as for home offices),
some welfare agencies show an open disdain for assuring that applicants do not
receive unjustified benefits. A California grand jury concluded in 1992 that
the San Diego County Department of Social Services had an "institutionalized
bias against fraud prevention."

Tax forms have become far more complex in recent years, forcing the average
American family to spend more hours than ever before struggling to calculate
their debt to the government. In contrast, Congress in 1989 prohibited school
systems from requiring both parents to submit their Social Security numbers when
requesting free school lunches for their children. Congress wanted to lighten
the paperwork burden on parents, even though the Agriculture Department
inspector general has reported that as many as 30 percent of the recipients of
free and reduced-price lunches were ineligible.

It is a crime that taxpayers are effectively treated like beggars when they
only seek simple fairness from the government tax collectors. Mr. Pryor's bill
to expand taxpayers' rights is a good place to begin to rebalance the rights of
taxpayers and welfare recipients. Just because someone is guilty of earning a
paycheck does not mean that he should be denied due process from the U.S.
government.
The Washington Times, April 5, 1994

James Bovard is a free lance writer and author of "The Fair Trade Fraud"
(St. Martin's Press, 1991).