Statement of Commissioner George Newstrom

 

I welcome the opportunity to comment on the final report of the National Commission on Restructuring the Internal Revenue Service.

It has been an honor to serve as a member of the Commission, and I strongly support most of the findings and recommendations included in the report. Unfortunately, there is one recommendation in the Governance Section to which I take strong exception, and this has prevented me from being able to sign the document. As a result, I would like to take this opportunity to express both my concern with regard to this recommendation and my support for the remainder.

 

Concerns Regarding the Recommendation to Create an Independent Board

I am unable to support this recommendation because, after more than two decades of building partnerships between public and private sector organizations, I am committed to maintaining a clear distinction between the policy making functions of government and the use of private sector contractors to make government operations more effective.

I know that the Commissioners who support this recommendation intend that the board have no role in policy making. However, it is difficult for me to understand how a body that hires the executive officers of an organization, sets their compensation, approves their budget proposals, and interacts on a regular basis with members of Congress can refrain from influencing policy. Tax policy and tax law enforcement are among the oldest and most critical functions of government. I do not believe that a board controlled by private sector members should have control over those responsible for the implementation of tax law.

I know that the IRS and Treasury must work to win the confidence of members of Congress and the American people. The Treasury Department has taken a critical step forward in proposing a new governance structure for the IRS and recommending the nomination of an IRS Commissioner with strong management experience. The IRS has redefined its core competencies and developed a plan that looks to the private sector for information technology resources that it cannot create in house. It is time to leverage these accomplishments and give them time to work.

Congress has the budget authority to hold Treasury and the IRS accountable for delivering on their plans. I believe that this is a more productive route than inserting the private sector into the governance process. It is critical to preserve the distinction between what the private sector can accomplish and those responsibilities that are an integral and inseparable part of government.

 

Importance of Implementing Other Findings and Recommendations

The Commission has developed a broad range of recommendations that, taken together, will strengthen the management of the Internal Revenue Service, give the IRS the ability to respond effectively to taxpayers, and increase compliance.

I commend my colleagues for their work on management and budget, workforce and culture, customer service, and compliance issues. I appreciate their concerns regarding simplification, taxpayer rights, and financial management. There are many things in these sections that I wholeheartedly endorse.

The modernization section includes recommendations that are critical to the ability of the IRS to function successfully in the twenty-first century. I was pleased to have the opportunity to work on the sections dealing with century date change, the integration of technology with strategic objectives, intellectual capital, and electronic filing. I believe that these recommendations go to the heart of building an IRS that can respond quickly and accurately to taxpayer needs and provide the quality of tax collection that is essential to a voluntary compliance system.

Finally, I appreciate the hard work and professionalism of the Commission staff without whom this report would not have been possible.

 

George Newstrom