Former U.S. Senator William V. Roth Jr., a fighter for tax cuts and IRS reformer during his five terms in Congress and creator of the popular retirement account that bears his name, died on December 13. He was 82.
“Bill Roth was the epitome of public service in Delaware,” said Governor Ruth Ann Minner in a statement issued the day of Roth’s death. “His many years serving the people of Delaware earned him a place in their hearts that few politicians reach. Senator Roth’s work in the areas of reducing taxes, balancing the federal budget, reforming government, leading foreign relations, and preserving the environment are well-known.”
“It’s a sad day for Delaware,” said U.S. Senator Joseph Biden (D-Delaware). “This was one of the truly great figures in Delaware politics.”
Roth, a Republican, co-authored the 1981 Kemp-Roth tax cuts, but he was best known as the creator of the Roth Individual Retirement Account, or Roth IRA.
In 1983, as chairman of the Senate Governmental Affairs Committee, he helped to expose wasteful defense spending, drawing attention to overpriced spare parts by decorating a Christmas tree with screws, nuts, and wrenches. The total price tag was $101,000. “It costs us $110 to buy the same parts at local hardware stores and supply houses,” Roth said at the time.
Roth Remembered for Exposing IRS
IRS expert Dan Pilla recalled Roth’s efforts to expose abuse at the Internal Revenue Service.
“The date was September 23, 1997. The United States Senate stood on the threshold of what would become three days of explosive testimony regarding the IRS, its attitudes and its often-abusive practices. In his opening remarks that morning, the late Senator William Roth, then the sitting chairman of the powerful Senate Finance Committee, provided a hint of the story that was about to unfold. It was the story of an agency with ‘extraordinary powers,’ one that had, frankly, gone out of control,” remembered Pilla.
According to Pilla, Roth said at that time, “Over the course of the next three days we are going to see a picture of a troubled agency, one that is losing the confidence of the American people, and one that all too frequently acts as if it were above the law. This is unacceptable.”
Given the strength of Roth’s leadership on the Finance Committee, “the IRS soon found itself in the hot seat,” noted Pilla. Committee members grilled high-ranking IRS officials on wide-ranging allegations of official misconduct, disregard of its own rules and procedures, even maleficence toward citizens.
“Rarely have Americans been so captivated by the goings-on in Washington,” noted Pilla. “The nation watched with a great sense of satisfaction as the tables were finally turned on the IRS. Rather than the IRS causing fear and consternation in the lives of honest citizens, the agency found itself choking down the bitter taste of its own medicine.
“Never before had a sitting member of Congress shown the courage to bite the hand that feeds it,” said Pilla. “After all, if not for the IRS, Congress would have no way to collect the hundreds of billions it spends so freely every year. And it is that very reason that for decades Congress left the IRS alone, viewing the agency as providing the only true ‘return on investment’ of any government organization or program.”
Added Pilla, “The IRS was brazen and growing more so each year. Taxpayers were crying out for relief and there was a loud and growing movement to abolish the IRS and the income tax entirely. Something had to be done.”
The abuse hearings led to historic legislation. The Internal Revenue Service Restructuring and Reform Act, passed on July 22, 1998, spelled out significant changes to the IRS and the way it does business. According to Pilla,
- The agency was reorganized into units that would focus only on select, pre-defined groups of taxpayers. This way, the employees of a given unit could be better educated on the nature of the businesses and citizens who comprised the group the employees were to handle.
- Congress added the “ten deadly sins” to the law. This is the list of actions that will lead to the termination of an IRS employee who commits one. Such actions include the violation of taxpayers’ rights and the harassment of taxpayers.
- More independence and authority was granted the office of the Taxpayer Advocate. This is the official with the authority to stop the IRS from taking any action that causes a serious hardship to the citizen.
- Important appeals rights were added to the law so that collection actions, such as wage levies, tax liens, and bank levies, could be challenged, and collection alternatives could be proposed before the IRS pulled the trigger on these potentially damaging steps.
- Sweeping changes were made to the so-called “innocent spouse” laws so that more people could get relief from joint tax debts with a present or former spouse, if such debt was attributable to the other spouse.
“Roth’s retirement from the Senate removed from Congress one of the precious few IRS watchdogs,” said Pilla. “And because of its insatiable lust for other people’s money,” Congress is now about the business of dismantling many of the protections that were ushered in by the Restructuring Act.
“I see the IRS steadily returning to the kind of agency it was prior to the time when Chairman Roth declared that its actions were unacceptable,” noted Pilla. “Unfortunately, Chairman Roth is no longer in the Senate to halt the trend.”
John Skorburg is managing editor of Budget & Tax News. His email address is [email protected].