REALIZING AN OBSERVING HOW UPSET THE DEMOCRATIC LEADER WAS WHEN
           CLOTURE WAS FILED LAST NIGHT, I CHECKED WITH THE DESK AS TO
           EXACTLY HOW MANY AMENDMENTS HAD BEEN FILED TO THE PRODUCT
           LIABILITY BILL BY OUR DEMOCRATIC COLLEAGUES. TO MY DISMAY
           EARLIER ONLY TWO HAD BEEN FILED, BUT STILL A VERY SMALL NUMBER,
           ONLY 21 DEMOCRATIC AMENDMENTS HAVE BEEN FILED, AND IT'S ALMOST
           
           1:00 P.M., THE DD LINE TIME. THE DEMOCRATIC LEADER STATED LAST
           EVENING THAT MANY MEMBERS ON HIS SIDE OF THE AISLE HAVE
           AMENDMENTS THEY WISH TO OFFER TO THIS BILL. HE ALSO STATED THAT

           "IT'S THE RIGHT OF ALL SENATORS TO FULFILL THE FUNCTIONS OF
           THEIR RESPONSIBILITIES TO OFFER AMENDMENTS." WELL, YOU KNOW,
           WHERE ARE THE AMENDMENTS?
           AND WHY HAVE MEMBERS ON THE DEMOCRATIC SIDE OF THE AISLE CHOSEN
           NOT TO FILE AMENDMENTS WITHIN THE TIME FRAME THAT'S OUTLINED
           UNDER RULE 22?
           COULD IT BE THAT OUR COLLEAGUES HAD NEVER BEEN PREPARED TO
           EXERCISE THEIR RIGHT TO OFFER AMENDMENTS WHEN IT COMES TO THE
           LEGISLATION?
           INSTEAD HAVE OUR COLLEAGUES ON THE OTHER SIDE OF THE AISLE JUST
           DECIDED THEY'D VOTE AGAINST CLOTURE WITH THE INTENTION OF NEVER

           ATTEMPTING TO OFFER AMENDMENTS THAT WOULD HAVE BEEN INTENDED,
           I'M SURE, TO IMPROVE THE BILL, AS SENATOR DASCHLE SUGGESTED?
           SINCE THERE HAVE ONLY BEEN 2 IS AMENDMENTS OFFERED, IT SEEMS TO
           ME THAT MAYBE OUR DEMOCRATIC COLLEAGUES ARE NOT SERIOUS ABOUT
           ADDRESSING THIS IMPORTANT ISSUE, WHICH IS, BY THE WAY, A BILL
           THAT HAS BEEN LABORIOUSLY WORKED OUT. IT IS A COMPROMISE BILL.
           SENATOR GORTON OF WASHINGTON AND SENATOR ROCKEFELLER OF WEST
           VIRGINIA HAVE SPENT HOURS, DAYS, MONTHS WORKING ON THIS, AND

           THIS LEGISLATION HAS BEEN APPROVED BY THE ADMINISTRATION, BY
           THE WHITE HOUSE. THEY'VE INDICATED THEY WOULD SIGN IT. SO WHY
           IN THE WORLD WOULD THERE NOT BE A SERIOUS ATTEMPT HERE TO PASS
           THIS LEGISLATION?
           BUT HAVING SAID ALL THAT, I'M PREPARED TO OFFER A CONSENT
           AGREEMENT THAT WOULD EXTEND THE FILING TIME FOR FIRST-DEGREE
           AMENDMENTS UNTIL
           
           5:00 P.M. THIS AFTERNOON IF THAT WOULD HELP TO ACCOMMODATE OUR
           COLLEAGUES ON THE DEMOCRATIC SIDE OR FOR THAT MATTER ON THE
           ROONE SIDE. THEREFORE, I DO NOW ASK UNANIMOUS CONSENT THAT
           NOTWITHSTANDING RULE 22, THE FILING DEADLINE FOR THE
           FIRST-DEGREE AMENDMENTS WITH RESPECT TO THE PRODUCT LIABILITY

           BILL BE EXTENDED
           
           UNTIL 5:00 P.M. THIS AFTERNOON.
           

           THE PRESIDING OFFICER: IS THERE OBJECTION?
           
           

           MR. BAUCUS: RESERVING THE RIGHT TO OBJECT, MR. PRESIDENT, I'VE
           CONSULTED WITH MY DEMOCRATIC COLLEAGUES AND KNOWING THAT THIS
           REQUEST WOULD COME UP AND IT IS OUR BELIEF THAT THE CONSENT
           SHOULD NOT BE GRANTED. ACCORDINGLY, I OBJECT.
           

           THE PRESIDING OFFICER: OBJECTION IS HEARD.
           

           MR. LOTT: I YIELD THE FLOOR, MR. PRESIDENT. MR. BAUCUS: MR.
           PRESIDENT?
           
           

           THE PRESIDING OFFICER: THE SENATOR FROM MONTANA.
           

           MR. BAUCUS: MR. PRESIDENT, I'D LUKE TO SPEAK A LITTLE BIT ABOUT
           THE CONFERENCE REPORT THAT'S BEFORE US, THE I.R.S RESTRUCTURING
           BILL. TODAY THE SENATE REACHES AN END OF A JOURNEY THAT HAS
           BEEN TWO LONG YEARS IN THE MAKING. IT'S ACTUALLY A JOURNEY THAT
           BEGAN A COUPLE OF YEARS AGO WHEN THE NATIONAL COMMISSION ON
           RESTRUCTURING THE I.R.S. WAS CHARGED WITH INVESTIGATING THE
           I.R.S.'S REPEATED FAILURE TO MODERNIZE ITS COMPUTER SYSTEMS.

           MANY STORIES OF THE I.R.S. COMPUTER SYSTEM FALLING DOWN,
           CRASHING, THE STEMS NOT MESHING AND ESSENTIALLY THE COMMISSION
           FELT THAT IT WAS THEIR CHARGE TO TRY TO FIND THE ANSWERS TO ALL
           THESE PROBLEMS. IT BECAME VERY CLEAR, MR. PRESIDENT, AS THE
           COMMISSION BEGAN TRYING TO FIND A SOLUTION TO THE COMMUTER
           PROBLEM, THAT IT WAS JUST TOUCHING E TIP OF THE ICEBERG, THAT
           THERE ARE A LOT MORE PROBLEMS IN THE I.R.S. THAT HAD TON
           ADDRESSED; NAMELY, THE ABUSE OF TOO MANY AGENTS, TOO MANY ROGUE

           AGENTS, THE INSENSITIVITY TOO OFTEN OF THE COMMISSION -- EXCUSE
           ME, TOO OFTEN OF THE I.R.S. EMPLOYEES TOWARDS TAXPAYERS, THAT
           FRANKLY LED THE COMMISSION TO DIG MUCH MORE DEEPLY INTO
           PROBLEMS FACING THE I.R.S. ACCORDINGLY, THE COMMISSION
           PROCEEDED TO LOOK AT OTHER AREAS, IN ADDITION TO THE COMPUTERS.
           THE COMMISSION PROBED VARIOUS PROBLEMS THAT THE TAXPAYERS FACED
           IN OUR COUNTRY AND UNDER THE LEADERSHIP OF SENATORS KERRY AND

           GRASSLEY AND REPRESENTATIVES PORTMAN AND COIN IN THE HOUR, THE
           COMIRX I THINK, PRODUCED A SERIES OF GOOD RECOMMENDATIONS THAT
           HAVE BECOME THE FOUNDATION OF THE BILL BEFORE US. AGAIN, ITS --
           ITS EIGHT THE RESTRUCTURING COMMISSION THAT SPENT A LOT OF TIME
           LOOKING AT PROBLEMS AND PRESENTED THE RECOMMENDATIONS TO THE
           CONGRESS. THE BILL BEFORE THE CONGRESS TODAY IS THE
           MANIFESTATION, ITS HE A THE OUTGROWTH OF THOSE RECOMMENDATIONS
           BY THE COMMISSION. IN ADDITION, MR. PRESIDENT, UNDER THE
           LEADERSHIP OF OUR CHAIRMAN, THE FINANCE COMMITTEE, BILL ROTH,

           WITH HIS VERY EXTENSIVE HEARINGS, WE'RE ABLE TO DRAW OUT MANY
           MORE ABUSES, MANY MORE PROBLEMS THAT OUR AMERICAN PEOPLE WERE
           FACING WITH THE I.R.S., AND AS A CONSEQUENCE, I THINK WE HAVE A
           BETTER BILL, WE'RE ABLE TO FINE-TUNE SOME OF THOSE
           RESTRUCTURING COMMISSION RECOMMENDATIONS, AND IN FACT WE'RE
           ABLE TO ADD A FEW MORE. SO, ALTOGETHER, I DO THINK IT'S A
           COMBINATION OF A VERY GOOD EFFORT ON BOTH THE PART OF THE
           COMMISSION AND THE CONGRESS. AND I THINK, MR. PRESIDENT, THAT

           THE RESULT IS GOING TO TURN OUT TO BE QUITE GOOD FOR THE
           AMERICAN PEOPLE. NOT PERFECT, BUT CERTAINLY AN IMPROVEMENT.
           JUSTICE JOHN MARSHAL SAID THE POWER TO TAX INVOLVES THE POWER
           TO DESTROY. WE ALL KNOW THE COROLLARY. THAT IS, THE POWER OF
           THE TAX COLLECTOR MUST BE VERY CAREFULLY BALANCED BECAUSE THE
           TAX COLLECTOR HIM OR HERSELF HAS INORDINANT POWER WHEN HE OR
           SHE TRIES TO COLLECT TAXES. ANY TAX COLLECTING AGENCY MUST BE
           STRONG MUFF TO MAKE SURE THAT EVERYONE IS PAYING HIS OR HER

           FAIR SHARE OF TAXES, BUT NOT SO POWERFUL AS TO TRAMPLE THE
           RIGHTS OF ORDINARY TIZENS. IT BECAME QUITE CLEAR THROUGH THE
           TESTIMONY OF WITNESSS BEFORE OUR COMMITTEE AND COMMENTS FROM
           OUR CONSTITUENTS AT HOME THAT THE I.R.S. HAD LOST THAT BALANCE
           OVER THE YEARS. LET ME GIVE YOU ONE EXAMPLE. THIS IS A PLEA FOR
           HELP FROM A CONSTITUENT OF MINE IN MONTANA. "THE PROBLEM
           STARTED WITH THE I.R.S. AND ME IN 1997. JOHN" -- THAT'S NOT

           THIS PERSON'S REAL NAME -- AND I" -- AND I IS JOHN'S WIFE --
           "HAD JUST BOUGHT A HOUSE. I WAS A SEMESTER AWAY FROM GRADUATING
           FROM COLLEGE AND WE THOUGHT THAT THE FAILED BUSINESS THAT WE
           HAD WAS BEHIND US. THE LAST WEEK IN JULY 1997, I RETURNED HOME
           AFTER A DAVE WORKING AT MY PART-TIME JOB TO FIND A NASTY NOTE
           ON MY FRONT DOOR FROM AN AGENT STATING HE HAD 'TRACKED US DOWN,
           AND EXPECT ADD PHONE CALL OR ELSE ACTION WOULD BE TAKEN.'"
           "WELL, I PROMPTLY CALLED HIM TO FIND OUT WHAT'S GOING ON. HE
           WAS VERY RUDE, RELUCTANT TO GIVE ME ANY INFORMATION, SAYING

           THAT HE COULDN'T TALK TO ME, WANT TO TALK TO ME BECAUSE HE
           WASN'T TALKING TO MY HUSBAND. THE LONG AND SHORT OF IT IS" --
           AND I'M PAIR FRAIGS THE LETTER HER. HE BEGAN TALKING TO ME IN A
           VERY DEGRADING MANNER. HE SAID HE EXPECT TO GET TAXES IN FULL
           AND SAID IT IN A VERY RUDE WAY. I ASKED HIM TO EXPLAIN. HE
           TREATED ME LIKE A CRIMINAL WHO WAS RUNNING AWAY FROM THE I.R.S.
           BASICALLY, THE AGENT IN THIS CASE PUT A LOON ON EVERYTHING THIS

           PERSON OWNED, ALSO MADE MANY PERSONAL COMMENTS THAT OBVIOUSLY
           INVESTIGATED THE PERSONAL LIVES OF THIS TAXPAYER, AND BASICALLY
           WAS SO RUDE AND SO ARROGANT AS TO BE PERFORMING ALMOST GAS STA
           POE TACTICS AGAINST MY CONSTITUENT. MY CONSTITUENT ENDS UP, MR.
           PRESIDENT, IN HER LETTER, BY SAYING THAT VERY CLEARLY, THE
           GOVERNMENT WAS NOT WORKING FOR THE PEOPLE. RATHER, IT WAS
           WORKING AGAINST THE PEOPLE. I THINK THIS LETTER SUMS UP THE
           ISSUE IN A NUTSHELL. THAT IS, MAKE THE GOVERNMENT WORK MUCH

           MORE FOR PEOPLE NOT AGAINST THEM. THAT IS, PUT SERVICE BACK
           INTO THE INTERNAL REVENUE SERVICE INSTEAD OF BEING ARROGANT AND
           DEGRADING PEOPLE AS MUCH AS THE SERVICE HAS IN THE PAST. NOW,
           WE CERTAINLY DON'T WANT TO TIE THE I.R.S.'S HANDS SO MUCH THAT
           TAX CHEATS ARE ENCOURAGED. THE REST OF US, AS WE ALL KNOW, END
           UP PICKING UP THE TAB WHEN SOMEONE ELSE CHEATS. STAMT AT THE
           SAME TIME, WE ALSO CAN'T GIVE THE I.R.S. -- AT THE SAME TIME,
           WE ALSO CAN'T GIVE THE I.R.S. HARASSING AMERICAN CITIZENS AND
           ASSUMING EVERYONE IS GUILTY THE MINUTE THEY WALK INTO THE DOOR.

           WE HAVE TO FIND THAT BALANCE AND IT IS NOT AN EASY MATTER. I
           BELIEVE THIS LEGISLATION WILL HELP THE I.R.S. FIND ITS WAY BACK
           TO THAT BALANCE. WHAT DOES IT DO?
           IT CREATES A BOARD, MADE UP CHIEFLY OF PRIDE CITIZENS, SUBJECT
           TO THE CONFIRMATION POWERS OF THE SENATE. GIVING THE SENATE
           LOTS OF OPPORTUNITIES TO ASK LOTS OF QUESTIONS OF THESE NEW
           BOARD MEMBERS TO SEE WHETHER OR NOT THEY FILL THE BILL. THE
           BOARD WILL ALSO KEEP AN EYE ON I.R.S.'S BUDGET, REPORT
           INDEPENDENTLY TO THE CONGRESS ITS RECOMMENDATIONS ON I.R.S.

           BUDGET MATTERS, NOT HAVE TO GO THROUGH THE REGULAR GOVERNMENT
           CHANNELS. THE BOARD WILL FOCUS ON LONG-TERM GOALS. IT IS ALSO
           MAKE SURE THAT THE SERVICE STAYS ON TRACK TO MEET THESE GOALS.
           IT IS ALSO FERRET OUT PROBLEMS THAT THE I.R.S. AND HELP THE
           I.R.S. ITSELF FIND SOLUTIONS. THE BILL FURTHER CREATES MUCH
           MORE PERSONNEL FLEXIBILITY, MAKING IT MUCH EASIER FOR THE
           COMMISSIONER, NEW COMMISSIONER WHO IS FULL OF ENTHUSIASM, WANTS
           TO GET THINGS SHAPED UP, GIVING HIM A LOT MORE FLEXIBILITY TO
           REWARD EMPLOYEES WHO ARE DOING WELL. I THINK THIS FLEXIBILITY

           WILL HELP THE I.R.S. ATTRACT COMPETENT PEOPLE, PEOPLE WHO ARE
           VERY TECHNICAL, THINK COMPETENT AND MANAGEMENT EXPERTS. YOU
           KNOW, YOU GET WHAT YOU PAY FOR, MR. PRESIDENT. AND IF YOU HAVE
           -- IF YOU WANT TO GET GOOD PEOPLE, YOU HAVE TO BE ABLE TO PAY
           THEM WELL, YOU HAVE TO BE ABLE TO GIVE THEM THE WHEREWITHAL TO
           DO THE JOB RIGHT AND THERE'S NOT BEEN SUFFICIENT FLEXIBILITY TO
           THIS POINT IN THE I.R.S. THIS BILL ALSO REORGANIZES THE I.R.S.
           IN SOMEWHAT THE SAME VEIN AS MAJOR AMERICAN COMPANY I.B.M. WAS

           REORGANIZEED WHEN IT YEARS AGO, I.B.M. REALIZED IT WAS FALLING
           BEHIND, IT WAS NOT SERVING CUSTOMERS, CUSTOMERS WERE NOT NUMBER
           ONE. IT MADE DRAMATIC CHANGES. IN FACT, COMMISSIONER ROSSOTTI
           WAS VERY MUCH A PART OF THOSE CHANGES AT I.B.M. AND WE ARE
           HOPEFUL THAT SOME OF THOSE SAME THINGS WILL WORK HERE. WHAT ARE SOME EXAMPLES?
           ONE IS THIS, AND IT A VERY MAJOR EXAMPLE. CURRENTLY, WHEN A
           TAXPAYER HAS A PROBLEM WITH THE I.R.S., IF IT INVOLVES SEVERAL
           DIFFERENT KINDS OF PROBLEMS -- LET'S SAY, INCOME TAX OR PAYROLL

           TAX ORX YOU KNOW, A CORPORATE TAX INVOLVED -- THE AGENT WHO
           HANDLES THE CASE TRANSFERS ALL THE FILES OVER TO THE PERSON
           RESPONSIBLE, SAY, FOR PAYROLL TAXES. AND FS A CORPORATE TAX
           MATTER, THE FILES TRANSFER OVER TO A CORPORATE TAX PERSON. IF
           IT IS SOME OTHER KIND OF TAX PROP PROBLEM, THE FILE IS THEN
           TRANSFERRED OVER TO THAT PERSON. ESSENTIALLY TRANSFERRING THE
           BUCK. WHEN AN INDIVIDUAL TAXPAYER TRIES TO FIND OUT WHAT'S
           GOING ON WITH WITH A HIS FILE, SOMETIMES THE FILE IS LOST. THE

           PERSON HE OR SHE CALLS DOESN'T KNOW THE ANSWER. HOW DO WE
           ATTEMPT TO SOLVE THAT?
           ESSENTIALLY, THE I.R.S. WILL BE DIVIDED INTO FOUR SEPARATE
           DWIGSZ. ONE IS FOR SMALL BUSINESS, ONE IS FOR LARGE
           CORPORATIONS, THE THIRD FOR TAX-EXEMPT INSTITUTIONS, AND A
           THIRD FOR INDIVIDUAL TAXPAYERS. SO THAT WHEN YOU, A TAXPAYER,
           HAVE A QUESTION BEFORE THE I.R.S., ONE PERSON IS QUHARJD YOUR
           FILE. ONE PERSON. MORE ACCOUNTABILITY. IF YOU'RE A SMALL
           BUSINESS PERSON, IT IS A SMALL BUSINESS SECTION. IF YOU'RE AN
           INDIVIDUAL TAXPAYER, IT IS THE INDIVIDUAL TAXPAYER SECTION,

           EVEN THOUGH YOU MAY HAVE QUESTIONS INVOLVING DIFFERENT PARTS OF
           THE CODE. THAT SHOULD HELP. THAT SHOULD CERTAINLY REDUCE BUCK
           PASSING. THE BILL ALSO PROVIDES IMPORTANT NEW TAXPAYER
           PROTECTIONS TO HELP PROTECT CITIZENS AGAINST ARBITRARY ACTIONS.
           THERE ARE PERSONALITY AND INTEREST PROVISIONS WHICH ARE
           SUSPENDED OR REDUCED. TOO OFTEN THE I.R.S. HAS TAKEN ADVANTAGE
           OF THE PENALTY AND THE INTEREST PROVISIONS IN THE LAW TO
           BROWBEAT TAXPAYERS MUCH TOO MUCH. A NUMBER OF DUE PROCESS
           REQUIREMENTS ARE CREATED. FOR EXAMPLE, THE LEGISLATION WOULD

           REQUIRE THE I.R.S. TO GIVE A DELINQUENT TAXPAYER 30 DAYS'
           NOTICE BEFORE REQUESTING A HEARING, AND BEFORE PROPERTY IS
           SEIZED. IN ADDITION SHALL THE I.R.S. IS REQUIRED HERE TO SEIZE
           BUSINESS PROPERTY ONLY AS A LAST RESOFERMENT THAT'S NOT ALWAYS
           BEEN THE CASE. IT FURTHER PROHIBITS THE SEIZURE OF PERSONAL
           RESIDENCE WITHOUT COURT APPROVAL, A MAJOR CHANGE. THE BILL
           FURTHER MAKES IT EASIER FOR INNOCENT SPOUSES TO GET RELIEF FROM
           TAX DETECTS THEIR GUILTY SPOUSES MAY HAVE ACCUMULATED. AND
           THERE ARE OTHER PROVISIONS. IT SHIFTS THE BURDEN OF PROOF FROM

           THE TAXPAYER TO THE I.R.S. IN COURT PROCEEDINGS SO LONG AS THE
           TAXPAYER KEEPS APPROPRIATE RECORDS AND COOPERATES WITH THE
           AGENCY. MR. PRESIDENT, I'M NOT POSITIVE THIS IS EXACTLY
           TAILORED THE WAY IT SHOULD BE. CURRENTLY IN OUR JUDICIAL SYSTEM
           THE BURDEN OF PROOF IS ON THE GOVERNMENT, WHENEVER YOU BRING AN
           ACTION AGAINST A CITIZEN. THAT'S THE WAY IT SHOULD BE. UP TO
           THIS POINT THAT'S NOT BEEN THE CASE WITH RESPECT TO OUR TAX
           LAWS. THE THEORY BEING THAT THE TAXPAYER IS THE ONE WHO KEEPS
           THE BOOKS AND RECORDS, SO THE TAXPAYER SHOULD HAVE THE

           OBLIGATION TO SHOW THAT HE OR SHE SHOULD NOT HAVE TO PAY THE
           TAXES THAT THE I.R.S. IS SEEKING. BURDEN OF PROOF STILL IS ON
           PROBABLY THE WRONG PLACE. WE'VE TRIED TO FIND THE RIGHT BALANCE
           HERE, AND I HOPE THIS PROVISION IN THIS STATUTE WORKS. TIME
           WILL ONLY TELL AND IF THERE ARE PROBLEMS, WE'LL HAVE TO
           READDRESS THEM. THE BILL FURTHER EXTENDS THE ATTORNEY-CLIENT
           PRIVILEGE TO ACCOUNTANTS AND TO OTHERS AUTHORIZED TO PRACTICE
           BEFORE THE I.R.S. I'M NOT SURE THAT -- HOW GOOD AN IDEA THIS

           IS. IT'S GOING TO MAKE IT MORE DIFFICULT FOR MAJOR ACCOUNTING
           FIRMS TO SIGN OFF AS TO THE FINANCIAL STATEMENTS OF A COMPANY
           THEY'RE AUDITING. IT MAY FEEL SOMEWHAT COMPROMISED BECAUSE OF
           THIS NEW PROVISION. I HOPE THIS WORKS. IT MAY NOT. IF NOT,
           WE'LL HAVE TO COME BACK AND REVISIT IT AS WELL. FINALLY, THE
           BILL BEFORE US TAKES A FIRST STEP TOWARDS ADDRESSING WHAT MAY
           BE THE BIGGEST CONTRIBUTOR TO TAXPAYER PROBLEMS WITH OUR X
           CODE; FAMELY, ALL OF US -- CONGRESS ITSELF. WITNESS AFTER

           WITNESS AT OUR HEARINGS COMPLAINED ABOUT THE COMPLEXITY OF THE
           CODE. THIS BILL REQUIRES THAT EVERY TAX DODE IN THE FUTURE BE
           SUBJECT TO ANALYSIS OF WHETHER IT WILL FURTHER COMPLICATE THE
{END: 1998/07/08 TIME: 13-15 , Wed.  105TH SENATE, SECOND SESSION}