Internal Revenue Service Policy Statement P-l-l defines the mission of the IRS as follows:

"The mission of the Service is to encourage and achieve the highest possible degree of voluntary compliance with the tax laws and regulations and to conduct itself so as to warrant the highest degree of public confidence in its integrity and efficiency. The service should advise the public of its rights and responsibilities, determine the extent of compliance and the causes of non-compliance, and do all things needed for proper administration and enforcement of the tax laws."

In order to fulfill this mission, the service must establish programs and facilities for receiving and processing returns, for collecting all taxes due, for auditing, for detecting fraud and delinquency, for hearing and adjudicating appeals, for providing taxpayer assistance and information, for recruiting persons with professional outlook and maximizing their ability to perform through training in both the ethical and professional aspects of their jobs, for developing evaluation methods designed to measure these aspects, for the uniform interpretation and application of the tax laws, for the preparation of regulations and tax guide materials, for clarification and simplication of tax rules, for maintaining the integrity of the Service and its efficient operation, and for performing such other duties as may be required by laws and regulations.

The key phrase in that policy statement is "the mission of the IRS is to encourage and achieve the highest possible degree of voluntary compliance." The heart of the voluntary compliance system is the self assessment mechanism whereby taxpayers report to the IRS what their taxable income is and compute their tax liability themselves. The responsibility for promoting voluntary compliance lies mainly in IRS's taxpayer assistance programs, but the IRS fully recognizes that the prospect of enforcement is the main reason for voluntary compliance. While some prefer to use the word "fear" in describing IRS's tactics in encouraging voluntary compliance, the IRS prefers to say they are instilling "respect for the system."

ENFORCEMENT OPERATIONS

IRS's enforcement operations are divided into three areas: collecting delinquent taxes, auditing tax returns, and conducting investigations of possible criminal violations of the tax laws.

The audit enforcement program is IRS's most visible activity. Most taxpayers are wary of being audited and of the possible consequences that may arise as a result. A number of books have been written on the audit process, which have succeeded in frightening taxpayers even more. The media has done an even better job of dramatizing the evils of an IRS audit, making an IRS audit society's most "dreaded exercise in fist-clenching, teeth-grinding, and ulcer-wrenching agony."

Most taxpayers are even more afraid of IRS's criminal enforcement powers. The reputation of the agency as a "tough" prosecutor goes back to the days when the IRS was the only government agency that could stop Al Capone. That one incident left such an indelible impression on so many people, it is ironic that our country's most notorious gangster is probably responsible for the tax compliance of such a large number of people.

Many people have begun to realize, though, that the IRS is not the "tough enforcer" it once was. In the past 10 years the activities of the IRS have come under closer public scrutiny than ever before. With this scrutiny has come a public awareness that the IRS does not have complete control of the tax system, and that very few who cheat are ever caught, and even fewer are ever prosecuted.

In 1981 taxpayers filed over 93 million individual income tax returns. Yet only 1.644 million tax returns were audited (a rate of only 1.76%), and only 1,978 criminal investigations were recommended for prosecution (a rate of only .002% of all individual income tax returns filed). In one year this means that less than two taxpayers out of a hundred will be audited and less than two taxpayers out of 100,000 will be prosecuted for tax fraud.

The Collection Division of the IRS probably generates more bad press than the other two enforcement divisions, but is most likely the least identifiable of the three divisions. This is because the media has a tendency to refer to all IRS enforcement employees as "agents." Few taxpayers know that the "agent" who conducts the audit is not the same one who seizes property or investigates for fraud. In fact, it is the "revenue agent" who conducts audits, the quot;special agent" who investigates fraud cases, and the "revenue officer" who has the authority to make seizures. Each enforcement person works for a separate division within the Service, and each division has its own set of responsibilities and powers, which are not interchangeable or overlapping.

During 1981 the IRS disposed of 2.2 million delinquent accounts and collected $5.9 billion in overdue taxes. Of that sum, $2.2 billion was collected in response to computer notices sent to taxpayers' and $3.4 billion was collected on delinquent returns involving the $1.8 billion in additional assessments. IRS enforcement statistics showed that in 1981 the Collection Division served 740,103 Notices of Levy, tiled 502,894 Notices of Federal Tax Liens, and conducted 8,848 property seizures.

These statistics show that the Collection Division actually has more public contact than the Audit Division, even though there are over 18,00() revenue agents and tax auditors and only 5,500 revenue officers. (This will increase to 8,500 by the end of Fiscal Year 1984.)

PROPERTY SEIZURES

Revenue officers are the only employees who have the authority to make seizures. Under the provisions of the tax code, they can attach almost an entire paycheck, wipe out a bank account, and seize almost anything that has value, from stereos, autos, and homes to machinery, equipment, and food. Under some provisions, such as when collection of the tax is deemed to be in jeopardy, they can demand immediate payment, and if not made, proceed to seize without restraint. In the case of perishable items like food, they can sell the assets as quickly as they seized them. By law then, they have the right to "swoop" down on a taxpayer, practically at will, and seize (or levy) and sell almost anything of value.

Most of the horror stories arise from the process of collecting delinquent taxes. A seizure is not a pleasant experience for a taxpayer and is usually not enjoyed by the revenue officers, though some do seem to relish exercising their legal muscles. Levy of a paycheck or bank account rarely involves a personal confrontation at the moment of seizure. This is because the IRS is not required to personally serve the levy forms on the taxpayer's employer or bank. Instead they are usually sent through the mail. But whenever personal tangible property is seized, like an automobile, house, or business, there is usually direct contact between the revenue of- ficer and the taxpayer. This confrontation is usually tense and somewhat aggravated by the nervousness of the revenue officer, (particularly if he is inexperienced) and the fear and anger of the taxpayer.

Delinquent taxes usually fall into two categories: income taxes and withholding taxes. Income tax delinquencies are unpaid individual income taxes due on Forms 1040 and 1040A. Very few small corporations pay income taxes, and revenue officers rarely have to collect delinquent corporate income taxes. Delinquent withholding taxes are those income and Social Security taxes withheld from employees by an employer and not paid over to the IRS. The IRS pursues delinquent withholding taxes far more vigorously than they do delinquent income taxes.

IRS statistics show that 25% of delinquent taxpayers at any one time have been delinquent before (repeaters). Revenue officers incur a lot of frustration in dealing with repeaters, because many of them have learned how the Collection Division operates, what kind of authority and power they have, and how to frustrate IRS attempts to collect from them. Combined with the stress of managerial pressure to close cases and build statistics, this frustration causes some revenue officers to become somewhat negligent in the way they treat their taxpayers, resulting in violations of IRS policies and procedures, as well as civil liberties.