Recommendation #16:

    Congress should require that an Office of Ombudsman be
maintained within the IRS, and should provide that the Ombudsman be
appointed by the President for a four-year term.

    The Ombudsman should have the right to intervene in any
enforcement proceeding or activity when a taxpayer has made a
petition to the Ombudsman that at least one of the following
conditions exist:

    * There has been an improper or possibly illegal assessment.

    * There has been an assessment made without the knowledge of the
      taxpayer and without benefit of the taxpayer's appeal rights.

    * There has been an action in violation either of the statutory
      procedures of the Tax Code, the policies or regulations of the
      IRS, or the procedural requirements specified in the Internal
      Revenue Manual.

Reasons for Change:

There already is an Ombudsman, who is on the Commissioner's immediate staff. The Ombudsman "administers the Problem Resolution Program nationwide, represents taxpayer's interests and concerns within the decision-making process, reviews IRS policies and procedures for possible adverse effects on taxpayers, proposes ideas on tax administration to benefit taxpayers and represents taxpayer's views in the design of tax forms and instructions." (Commissioner's Annual Report, 1981.)

The Taxpayer Ombudsman position was established pursuant to Executive Order 12160 of September 26,1979, ("Providing for Enhancement and Coordination of Federal Consumer Programs") in order to strengthen and enhance the already existing Problem Resolution Program, established in 1977.

The Ombudsman should be a political appointee and not a career IRS employee. As a political appointee the Ombudsman would be free to be a true taxpayer advocate without worry for his career aspirations within the IRS. He would not have to worry about how other IRS managers feel about his input into their areas of responsibility. Also, a political appointee would come to the job independent of the restrictive mission-oriented mentality that besets so many career executives. Not being engraved with IRS philosophy and methods of operation, he should be more perceptive to the needs of taxpayers and more receptive to changing the old ways of doing things. A four year term would enable each new administration to replace the Ombudsman according to its needs.

The IRS has expressed some concern about the Ombudsman being a political appointee. Commissioner Egger has testified that such independent power "would not provide a balance between protecting the government's and taxpayers' interests and would open up dangerous potential for political abuse of the tax system." It is questionable that those arguments really hold water. After all, the Commissioner is a political appointee. I'm convinced that there is room in the IRS for another political appointee. (The Commissioner is presently the only political appointee in the entire agency.)