Don Nickles

Mr. NICKLES

Mr. NICKLES. Just for the Senators' information, now the Senate just had a vote on limiting legal fees. That probably is not the only vote that we are going to have on that issue. And the Senator managing the bill, I compliment him for doing a very good job. I might mention, some of us also have statements we would like to make on the bill. We have been on the bill now for a day. This is a very extensive, expensive bill. Some of us wish to speak on the bill. We wish to tell our constituents what is in this bill, maybe why we have some concerns, maybe so we might be able to influence people on how various amendments might go. But I just tell my friend and colleague from Arizona, certainly the idea of going back and forth on amendments is acceptable, I think, for all Senators certainly on this side. But in all likelihood, there will be additional amendments dealing with the issue we just debated.

Mr. NICKLES. Will the Senator yield?

Mr. NICKLES. I announce that the Senator from New Hampshire (Mr. Smith) is necessarily absent.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from New York (Mr. D'Amato) and the Senator from North Carolinaa (Mr. Faircloth) are necessarily absent.

Mr. NICKLES. I announce that the Senator from North Carolina (Mr. Faircloth) is necessarily absent.

Mr. NICKLES. I announce that the Senator from North Carolina (Mr. Faircloth), is necessarily absent.

Mr. NICKLES. I announce that the Senator from North Carolina (Mr. Faircloth) is necessarily absent.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from New Hampshire (Mr. Gregg) is necessarily absent.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Oklahoma (Mr. Inhofe) is necessarily absent.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from South Carolina (Mr. Thurmond), is necessarily absent. I further announce that, if present and voting, the Senator from South Carolina (Mr. Thurmond), would vote yea.

Mr. NICKLES. I announce that the Senator from South Carolina (Mr. Thurmond) is necessarily absent. I further announce that, if present and voting, the Senator from South Carolina (Mr. Thurmond) would vote yea.

Mr. NICKLES. Mr. President, I rise today in support of this legislation. I compliment Senator Roth and Senator Moynihan, for having the most significant oversight hearings that we have had in this Congress, indeed for the last several Congresses. A lot of us have said we need to do better oversight, and we talked about it but we didn't do it. This is the case where the Finance Committee had the first serious oversight of the IRS in our history. It is long overdue, and it uncovered a lot of things. It uncovered ugly examples of Government abuse of power, Government abuse of power which should never have happened, which was exposed, and I believe with this legislation, we are going to help correct it and make sure it doesn't happen again. I compliment Senator Roth and Senator Moynihan for those hearings. Those hearings were initially held in September, and then we had follow-up hearings just last month. Each additional set of hearings kept showing abuses that were even more outlandish than the ones before, culminated by the fact that one disgruntled IRS agent actually had tried to set up Senator Howard Baker, and a Congressman and a district attorney. Unbelievable; unbelievable abuse of power. I compliment our colleagues for the oversight hearings. I also compliment Senator Kerrey and Senator Grassley for their work on a commission that helped give us some material to produce good reform. We had the hearings, and we also had legislative oversight and some work done through their commission to produce recommendations for a positive legislative overhaul. I compliment both Senator Grassley and Senator Kerrey for their fine work in doing that. Also, I compliment our colleagues in the House. We had the hearings in the Senate in September, and our colleagues in the House passed IRS reform legislation on November 5. I disagree with my colleagues on the Democratic side who said, ``We should have passed the House bill.'' Senator Roth and some of us said we can do better than the House, and I think we have. The House bill was a giant step in the right direction, but we have done a lot more than the House did. The House did not have legislation to deal with innocent spouse issues, which we also had hearings on and which showed a lot of innocent spouses were abused by the IRS system. We are correcting that in this legislation. We had a hearing in Oklahoma. It was the first IRS field hearing that we have had. It was one I found very interesting. We had Oklahomans who testified about some of the problems they had. As a result of their testimony, we made this legislation better. I will give a couple of examples. We had Lisa New, who is a young lady from Guthrie, OK, testify. She was a pet groomer. She groomed pets. She was a school bus driver, and she was a single mother. She owed the IRS $4,000 in 1986. She found out about it and went to the IRS. She said, ``I owe you this money. I would like to pay it off $100 a month.'' IRS said, ``No, we want it all immediately.'' She couldn't pay it, so the IRS put a lien on her home. Her debt to the IRS, as of last month, totaled about $30,000 of interest and penalties on an original $4,000 debt back in 1986. In this legislation, we say that penalties and interest will not accrue to the deficiency if the IRS does not notify the taxpayer within 1 year. We also say the IRS will be required to adopt a liberal acceptance policy for offers in compromise. They clearly did not do that in this case. We also say liens would not be allowed if the original tax debt was less than $5,000. So we make some changes. We had another case where an individual, whom a lot of people in this room might recognize--he is somewhat of a well-known Olympic athlete coach--Steve Nunno. He was coach of the U.S. Olympic gymnastics team, coach of Shannon Miller, a great all-American coach. He had a problem with the IRS. His business grew a lot, and he was making quarterly payments for payroll taxes. Then his business grew some more. Suddenly, he was supposed to make payroll tax payments monthly. He got a little bit behind. He recognized that. He said he was willing to work it out, and he worked it out with an agent. They signed an agreement that if he makes these payments of so much per month over this period, that would be acceptable. Then the IRS changed agents. A new agent came in and said, ``No, we want to be paid immediately, and if you don't pay up immediately, we're going to put a padlock on your business and put a lien on your business.'' He was traveling in Europe with the U.S. Olympians and his team, and he had an IRS agent threatening to close down his gymnastics business. It is absolutely absurd. He borrowed the money. He was able to pay it off. We put in provisions to make sure that would not happen again. We now say that a taxpayer will be given the opportunity of a court hearing before liens, levies or seizures. He is going to have a chance to have a hearing. He is going to have an appeals process. Not a single agent is going to be able to come in and say, ``I disagree with you; if you don't pay up by''--such and such a date--``we are going to padlock your business.'' We protect that taxpayer. We say the IRS can only seize the taxpayer's business or home as a last resort. Unfortunately, we found out in Oklahoma and Arkansas as a result of our investigation that we had seizure rates in this district about eight times the national average, and we even found that there were incentives for employees to close those cases. ``We don't care if you seize the assets, close those cases,'' and people would receive financial benefits. We stopped that in this legislation. We also say that notices to taxpayers must include the name and phone number of the IRS contact. They will know somebody to call. They are not going to get the runaround and talk to 15 different agents when they are trying to deal with a case. We have that in this legislation. None of that, I might add, was in the House bill. None of it was in the House bill. I can mention a couple others. We had Dr. Jim Highfill of Ponca City testify. He is a dentist. He had IRS agents come into his office and announce that he was under investigation. We put provisions in this bill that says the IRS will be reorganized so that small businesses will only work with IRS employees specializing in small business issues. That will help solve some of these problems. We also say IRS employees who disclose taxpayer information, such as notices of summons, will be subject to termination. The IRS agents came into his office and said, ``We've got a summons for this dentist,'' in front of his patients to embarrass him, to intimidate him. We now make those agents subject to termination. We found abuse after abuse, and we found IRS agents were not terminated. I will mention that most of the 102,000 IRS agents and employees are outstanding civil servants, but some have abused their power, and they should be terminated for that abuse of power. In almost every case we listened to, they were not terminated. We also say that advice from a CPA to a taxpayer will be privileged the same as advice from a tax attorney. I could go on. We put a lot of provisions in the Senate bill that were not in the House bill. We made it better. I wouldn't say it is perfect, but I think it is a lot better. There was a reason for the Senate to be a little more deliberate. It was the Senate that had the initial hearings. The House marked up the bill, and, again, my compliments to the House. Sometimes they do things a little more quickly, but sometimes we do them a little bit better. This is a more thorough bill. This is a bill that has been researched better. We are solving more problems for taxpayers in this bill. Finally, at the hearings that we had in the last couple of weeks, we heard different cases. In Texas, there was a business that had 32 employees, and 64 IRS agents raided the business. Their intent was to intimidate and abuse their power. Or the case in Virginia Beach where an individual had a restaurant, a dozen or so IRS agents broke into his restaurant, his home, and his partner's home, broke his door down. They certainly abused their power. Agents who abuse their power should be terminated. Or for example the investigation of Senator Baker and others, that was certainly abuse power. Those people who supervised that IRS agent are also responsible, not just the bad apple in this case. He was eventually terminated because he was arrested for having cocaine in his car, not for the abuse of the investigation of a Senator, a Congressman, and a district attorney. So not only should he have been disciplined, but his supervisor who did not corral him, after some very honest and good employees said, ``Wait a minute; this investigation is going too far,'' and tried to stop it. Their supervisors did not discipline the person who was responsible. They should have been terminated. They should have felt the penalties for not reining in the IRS. The IRS has been out of control. In many, many cases they abuse their power. So this bill is going to try to rein in the IRS, make the IRS more accountable to taxpayers, make sure that they understand the ``S'' in ``Internal Revenue Service'' stands for ``service,'' that they are servants, that they work for the people, not the other way around, and that the people who are God-fearing and are willing to pay their taxes have nothing to fear of the IRS. They may have some disputes because of the complexity of the law, but if they are willing to pay their fair share of taxes, they are not trying to cheat the system, they should not fear the IRS gestapo-type tactics that we have heard about in recent weeks. So I again want to compliment Senator Roth and Senator Moynihan, Senator Grassley, Senator Kerrey, and other people, who have worked to put together, I think, a very good bill, a positive bill, one that will be of real benefit to taxpayers and one that we can say, yes, we have done something positive, and we have worked together to make it happen. I am pleased that now the President is supporting this bill. I might mention--I look at a statement from the Washington Post dated October 1, 1997. It says: President Clinton opposes legislative reform of the IRS saying, ``I believe the IRS is functioning better today than it was 5 years ago.'' He was speaking in reference to the Republican reform proposals. ``We should not politicize it and we should not do anything that will in any way call into question whether it is evenhanded or fair in the future.'' Originally, President Clinton was against this bill. Originally, Secretary Rubin was against this bill. I am glad they decided they would support the House bill. I am glad they have decided they would support the Senate bill. Both are good pieces of legislation. Both need to pass. Both need to become law. Mr. President, again, I thank the sponsors and look forward to this becoming the law of the land. I yield the floor. Mr. DODD addressed the Chair.

Mr. NICKLES. Mr. President, I wish to thank the Chairman of the Senate Finance Committee and his staff for working closely with Senator Baucus, Senator Hutchison, and me on language in this bill to protect the trade secrets and confidential information of software publishers and their customers. The Senate IRS bill is far stronger than the House bill on these issues, and we appreciate the Chairman's efforts. To ensure fair and adequate implementation of this legislation, I would like to clarify our intent with regard to some of its provisions. First, this bill confirms that, in an IRS summons enforcement proceeding involving software, courts have the authority to issue ``any order necessary to prevent the disclosure of trade secrets and other confidential information'' with respect to software. I believe this authority is inherent in the existing powers of the judiciary in summons enforcement proceedings, and that our legislation simply reaffirms this authority with respect to the proceedings involving software. Mr. President, this clarification would make clear that the court can also issue orders to protect confidential taxpayer information associated with the software. Secondly, the legislation currently provides that ``the Secretary will make a good faith and significant effort to ascertain the correctness of an item'' prior to issuance of a summons for software source code. It is my belief that a good faith and significant effort requires that the IRS conduct a thorough review of the taxpayer's books, records, and other data, including the issuance of Information Document Requests and following-up those requests appropriately. This clarification would make certain that source code should be summoned as a last resort only.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from North Carolina (Mr. Helms) is necessarily absent.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from North Carolina (Mr. Faircloth) and the Senator from North Carolina (Mr. Helms) are necessarily absent.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Arizona (Mr. Kyl), is necessarily absent.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Arizona (Mr. Kyl) is necessarily absent.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Arizona (Mr. Kyl) is necessarily absent.

Mr. NICKLES

Mr. NICKLES. I move to lay that motion on the table. The motion to lay on the table was agreed to. Mr. DOMENICI addressed the Chair.

Mr. NICKLES. Mr. President, the amendment that I send to the desk on behalf of myself and also Senator Smith of New Hampshire basically says that under the report that is required by the resolution of ratification right now, the report says that we should have a study considering the cost of deployment of a NATO missile defense system for the region of Europe. I think, frankly, it should apply to all NATO countries. That is the essence of the amendment. This is a NATO treaty. This is a mutual defense treaty for all NATO countries. All NATO countries are saying that they will come to one another's aid for the following reasons. If we are going to have a missile defense study for Europe, it certainly should have a missile defense study for the United States and for Canada. That is the essence of my amendment. It is to make sure that we are not just having a treaty just to defend Europe but it is also to defend the United States and, of course, Canada, which I believe, as both the United States and Canada are instrumental and very important members of NATO, should not be denigrated and should not be put in a separate category or separate class. I want to compliment my colleague from North Carolina for his leadership on this issue. He has done a very good job, as has the ranking member. I will tell my colleagues. It has been I think a proud week for the Senate. We have not had a partisan vote yet. We have had a very, very significant foreign policy debate. I compliment my colleague from Virginia and my colleague from New York, Senator Moynihan, for raising some very important issues. Some people said, ``Well, the Senate hasn't considered this treaty. I will tell my colleagues, I think a lot of it has addressed this treaty pretty closely and even the committee reports. This is the committee report section. A lot of times some of us don't read those things. I happened to read this, or my staff brought it to my attention. I said, ``Wait a minute. This doesn't make sense. We are going to correct this.'' I appreciate my colleagues on the other side of the aisle for their willingness to accept this amendment. But I think we have had some good debates. I think it has been very positive for the Senate and also positive for the mutual defense of all NATO countries. I thank my colleagues. I also want to thank my colleague from New Hampshire for his leadership on this amendment as well. Mr. LEVIN addressed the Chair.

Mr. NICKLES. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. NICKLES. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Arizona (Mr. Kyl) is necessarily absent.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Missouri (Mr. Bond) is necessarily absent.

Mr. NICKLES

Mr. NICKLES. Mr. President, money is fungible. We had the law of the land under President Reagan and President Bush for 10 years, 12 years, a certain number of those years. No money should be used by these organizations if they take U.S. money to fund abortions or to lobby governments. Whether it be government money or their money, we said, ``No; if you are going to get U.S. money, you can't go in and take other money and use it to pay for abortions or lobby other countries.'' Money is fungible, so the net result is, what we are trying to say is, wait, if you are going to take U.S. taxpayer dollars, don't use money and shuffle money around in accounts and lobbying other countries to change their laws. They are representing our Government in many cases. If they are getting U.S. taxpayer money and they are lobbying and using that money to set up family planning, and they are also lobbying, a lot of other countries are going to think that is the U.S. Government or would think that is taxpayer dollars. That is a mistake. This is a reasonable compromise. I urge my colleagues to pass it.