The IRS Hearings: a Political Fund-Raising Event for 1998?

This week's hearings pack plenty of drama, but impact on policy is another matter.

It is congressional theater at its best - or worst, depending on your perspective.

In the Senate's wood-paneled central hearing room, the bright TV lights illuminate Sen. William Roth (R) of Delaware. As the cameras roll, the Finance Committee chairman dramatically points to a blowup of an anonymous note sent by an Internal Revenue Service employee to a tax attorney.

"You and Your Clients are Next," the note threatens. "You are currently under Investigation and I'm waiting for the day your name is in the paper."

Senator Roth demands to know if the suspected note-writer is still employed at IRS and dealing with taxpayers. A Treasury Department inspector admits the suspect is still on the job and calls for a fuller investigation.

It's a scene staged to impress the public and media. The goal of these hearings on IRS abuse isn't fact-gathering, or even to educate senators about the problem.

"Roth is seeking attention, not information," says Jack Pitney, a political scientist at Claremont-McKenna College in Claremont, Calif. "The value of a hearing is that it provides a striking visual for the television cameras. It really is political theater."

Congressional hearings can be a way of highlighting problems and building support for legislation. But they don't always produce the desired drama - as in the case of Tennessee Sen. Fred Thompson's campaign-finance hearings. "They are fundamentally to publicize an issue that's near and dear to the chairman's heart," says Marshall Wittmann, director of congressional relations for the conservative Heritage Foundation, a Washington think tank. "The chairman is the producer, the members of the committee are the key actors and actresses. A good hearing will have a plot, and will have an ending that will result in legislation."

Political acting

"In controversial issues, where the members' opinions are already clearly formed, hearings are more about pressuring political actors along preferred lines or blocking things that you don't want done," says Christopher Foreman Jr., a senior fellow at the centrist Brookings Institution.

In this case the politics could not be clearer. Roth's first set of IRS hearings last fall struck a chord with a public that tends to view the tax agency as a neighborhood bully. The House responded by passing tough new IRS-reform legislation.

The IRS hearings went so well that Roth held another set to highlight abuses of "innocent spouses," usually women whose ex-husbands have left them holding the tax-bill bag. Soon after, the committee overwhelmingly passed a measure with greater taxpayer protections - and thus greater cost - than the House bill.

Senate majority leader Trent Lott (R) of Mississippi says he'll bring that proposal to the floor next week. These hearings are meant to provide a push ensuring that the Senate will pass the measure by a veto-proof margin.

Making money

Meanwhile, Republicans in both houses have used the issue as a fund-raising rallying cry. The Associated Press reports that the National Republican Senatorial Committee, for example, sent out about 350,000 anti-IRS letters in August and received $1.7 million in individual contributions over the following two months.

The staging is not lost on committee Democrats, themselves old hands at the hearings game.

"I do not believe these hearings are balanced," charges Sen. Max Baucus (D) of Montana. "How can we spend four days talking about a handful of cases that the IRS might or might not have mishandled, yet not spend a minute talking about how some Americans are flouting the tax laws?"

An effective hearing - the rare one that makes the evening network news - carries a punch no administration can ignore. After last fall's Roth inquiry, then-acting IRS Commissioner Michael Dolan swiftly issued a series of internal reforms. This week, as the Senate committee delved into wrongdoing by the IRS's Criminal Investigation Division, new IRS Commissioner Charles Rossotti announced a series of reforms, including an independent review of the CID, to be headed by William Webster, a former FBI and CIA director.

This week's hearings heard charges that the CID employs investigative techniques developed for use against violent criminals - including raids with automatic weapons - against taxpayers who are not violent.

Robert Davis, a Dallas lawyer, told of a client who was roused from her bath by 10 IRS agents with a search warrant who held her in her bedroom for eight hours while they searched her house. Later, she learned the only reason for the search was to appraise the furniture for an investigation of her father, which was eventually dropped.

Treasury inspectors testified that senior IRS executives are disciplined more leniently than subordinates. While most agree the IRS is ripe for reform, some say Congress bears a large share of the blame for constantly tinkering with a complex tax code.

Sen. Bob Kerrey (D) of Nebraska says these hearings are "very effective.... Nobody emotes better than a member of Congress when they're dealing with somebody who's been abused by the IRS."

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