Key House Members Question IRS Plan for Sharp Cut in Estate and Gift Tax Attorneys

Press Release July 28, 2006

Washington, D.C.—Key members of Congress have joined a growing chorus of questions and criticism over an Internal Revenue Service (IRS) plan to cut by half its number of estate and gift tax attorneys who are, by the agency’s own admission, the most productive tax law enforcement officers at the IRS. They have expressed their concerns in writing to IRS Commissioner Mark Everson.

President Colleen M. Kelley of the National Treasury Employees Union (NTEU) welcomed the support in the fight against this unwise, unnecessary action by the IRS of senior members of the House Ways and Means Committee—Rep. John Lewis (D-Ga.) and Rep. Earl Pomeroy (D-N.D.). Rep. Steven Rothman (D-N.J.), a member of the House Appropriations Committee, which has jurisdiction over the IRS, is the force behind a second letter signed by 22 other members of the House.

The IRS plan, which drew immediate and sharply critical reactions from President Kelley and Rep. Rothman, was the subject of a major article in last Sunday’s New York Times, followed by a Thursday editorial critical of the plan.

“Given the size of the multi-billion-dollar tax gap and the amount of money estate and gift tax attorneys generate for the Treasury, it doesn’t make any sense” for the IRS to reduce the staff in this function, Kelley said.

Reps. Lewis and Pomeroy noted in their letter that even under possible legislation impacting the estate tax, larger estates will remain subject to the tax. “Clearly, these estates, because of their size and complexity, require greater amounts of audit resources.”

They requested a variety of information from Commissioner Everson, including the allocation of audit resources to various categories of estates by dollar amount; the impact the proposed reduction in audit staff will have on audits of previously-filed returns; and estimates of the amount of additional taxes expected to be generated by such audits along with comparisons of that figure to prior years.

The information, they said, “would assist us all in understanding the IRS’s plan and determining whether a reduction in IRS staffing is appropriate.” Given the amount of the tax gap and the importance of everyone paying his or her share of taxes, they said, “we believe the IRS should continue its aggressive presence in the estate and gift tax area.”

Rep. Rothman, meanwhile, referred to the Times’ story in his letter to the commissioner, noting that he and a number of his colleagues “have serious concerns about this significant shift in tax collection policy.” He asked that the agency immediately delay the decision until Congress has adequate time to review the plan.

The New Jersey congressman also asked for specific information, including clarification about “the exact workload of these auditors, the distribution of cases by the amount of taxable estate value, and how their possible elimination will affect tax collection for this division of the IRS.”

The Times Sunday article quoted a senior IRS official as saying that the agency’s estate and gift tax employees find an average of $2,200 in taxes owed to the government for each hour they work.

NTEU is the largest independent federal union, representing some 150,000 federal workers in 30 agencies and departments, including 94,000 in the IRS.

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