Roscoe L. Egger

"We could do more audits than anybody ever did before and set some kind of record. But the question is, Have we lived up to our obligation to the public to be effective? Effective means not only did we do the job, but did we do it well, seeing to it that the taxpayer was treated fairly?"

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If you think tax instructions can be confusing try locating a room at 1111 Constitution Ave. NW Washington D.C. At that appropriately digitalized address sprawls the national headquarters of the United States Internal Revenue Service -- an entire city block's worth of chiseled stone that, with its purposeless columns, confounding corridors, and tedious fenestration, seems to be the architectural equivalent of filling out a Form 1040.

Inside, behind a modest desk on the third floor, sits one of the more awesome presences in the capital -- you know, what's-his-name, the head of the IRS. Although his signature has adorned the front page of tax instruction booklets for the past three years (just below the pitch for voluntary contributions to help defray the national debt), few citizens have the remotest idea who he is or where he came from. Then again, it may be that few want to. As the saying goes, what you don't know can't hurt you.

But if he doesn't turn heads with the regularity of, say, Paul Newman, the atmosphere can be equally charged when his identity is made known to others, inevitably triggering a kind of nervous laughter. He takes it all in stride.

"At most, it provides me with a little bit of enjoyment from time to time," he acknowledges. "But it does tend to remind you that people look upon the individuals of the IRS as identified with tax collection."

That incontrovertible fact notwithstanding, Roscoe L. Egger Jr. does not come across in person as the National Ogre. For one thing, he strikes a tidy, slight figure whose unprepossessing demeanor exudes only the best of will. For another, neither he nor his 90,000 or so subordinates is officially out to "get" anybody -- provided, of course, that the individual or business in question has dutifully filed, accurately accounted for, and timely parted with his, her, or its annual tithe.

As it happens, that is an increasingly significant proviso: Perhaps more than any recent tax commissioner, the 63-year-old Egger is bent not so much on reinterpreting statutes as on bringing shirkers to task, and doing it equitably.

Of course, as Egger appreciates, no one likes to pay taxes. "They never have throughout all of history, and while they do it willingly -- that is most of them -- I suppose it is never pleasant to part with what you've worked for and earned." Pleasant or not, an additional 4,800 citizens are targeted to be sharing that experience this year. In one of his most controversial acts to date, Egger has authorized the IRS to obtain mailing lists of high-income individuals from private vendors, in an effort to track down tax evaders.

To some, the move smacks of invasion of privacy, but Egger strongly disagrees. "The New York Times and others ran articles indicating there's something sinister about what we're doing here. Good heavens, all we're doing is something we could do ourselves, except we can buy it cheaper on the commercial market. The compilations are done from telephone books, auto registration lists, city directories, and various other public sources. It's really a research effort. The information we get has to do with a name and address, the number of people in the household, the age of the head of the household, estimated income level, and one or two other minor things . . . Our purpose is not to identify returns for examination . . . but merely to identify possible individuals who should have filed a tax return and did not. It's strictly a nonfiler program, nothing more."

As for those who file inaccurate returns, Egger is content to go after them with the traditional weapon of the audit. He is pleased to report that since his appointment in 1981, IRS examiners have slashed the "no-change" rate -- the proportion of audited returns that are ultimately accepted as originally filed -- nearly in half, from about 43% to a current 22%. "In other words, we're doing a better job of selecting returns," Egger concludes. "And we'll keep right on bringing that percentage down."

Also down during Egger's tenure has been the raw number of returns selected for examination, currently 1.6 million a year. "We could do more audits than anybody ever did before and set some kind of record," notes the commissioner. "But the question is, Have we lived up to our obligation to the public to be effective? Effective means not only did we do the job, but did we do it well, seeing to it that the taxpayer was treated fairly?"

In selecting returns for audit, the agency's 28,000-person examination division relies heavily on what Egger calls "very sophisticated formulas" for scoring certain line items from each return. When the result is abnormal, the return is subject to the dreaded examination, and the unlucky taxpayer is advised to, as Egger says, "put your things together, and we'll talk about it."

To most citizens, such an invitation is about as welcome as a course of periodontal surgery. If it is any consolation, Egger himself has been on the receiving end of these invitations with a regularity that would be the despair of most others. "Few people in the country have had as many examinations as I have, certainly in the last several years," he reflects with equanimity. And, although he admits to having been apprehensive the first time, he has stood up well under his pace-setting ordeal. "I have not had any difficult experiences."

Now for the bad news: The commissioner thinks more returns should be examined. "The purpose of a tax audit," he points out, "is not just to catch somebody who may have understated his income, but to monitor the system. It is to see how different features of the law play out in their applications. When we capture that kind of information, we then make recommendations through the Treasury to Congress to simplify or eliminate some of the problems we find. So it is important to conduct audits on returns even though there is no reason to believe that there is anything untoward about them."

Lest anyone figure the odds may be changing in his or her favor, however, Egger adds that "we still target our examinations to those returns where we believe there is a high likelihood of some kind of adjustment."

The targeting of examinations has, in fact, been a touchy subject over the years. One suspicion that has made some taxpayers uneasy is that the IRS goes after prominent or rich people, using them as examples for the rest of the flock. Egger insists there is no truth to the allegations. "We do not make return selections on that basis. But if we read in the newspaper where somebody has embezzled a lot of money, or if other information that is out of the ordinary comes to the attention of our field people, the district office might be prompted to pull that return and have a look at it."

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