IRS FLUNKS AUDIT

The Internal Revenue Service has generated more panics and cold sweats in its day than any other single source. All the IRS has to do is mention the word "audit," and even the most honest taxpayers can be overwhelmed by a sense of dread.

Surely the irony of the latest congressional audit of the vast IRS system wasn't lost on millions of taxpayers who save every scrap of paper to document their tax returns. What the Governmental Affairs Committee found was simply unbelievable -- enough that any taxpayer would be subjected to stiff penalties, heavy interest and possible prison time under similar circumstances.

For example:

-- IRS records on individual taxpayers can't be reconciled with the $1.4 trillion it collected nor the $122 billion it paid in refunds.

-- The IRS can't document amounts it says it collected in income taxes, Social Security taxes and excise taxes.

-- The is no verification for much of the $3 billion the IRS says it spent on items other than payroll.

-- The IRS can't document its $113 billion estimate of overdue taxes.

In defense of the tax agency, IRS chief financial officer Anthony Musick says there is a "detailed plan" for correcting these problems. But this isn't the first time a congressional audit has revealed such gross problems within the very agency that demands precise record keeping by millions of Americans. This is the fourth year in a row the audit has uncovered problems within the IRS amounting to millions, billions and trillions of dollars.

Most ordinary taxpayers would welcome such leniency in their own tax situations, but relief may be difficult to obtain. In Congress, there have been calls in recent months for a major overhaul of the tax system -- possibly even the elimination of the IRS. Now there are hints that an outside board might be set up by Congress to run the IRS.

Instead of creating more government, Congress would do well to give serious consideration to a simpler and less onerous tax system. Flat taxes and other plans that were floating around during the presidential primaries need not evaporate simply because the heat of debate has subsided.

Given the dismal record of the IRS in recent congressional audits, there appears to be a clear signal to clean up the mess, and it appears the IRS can't put its own house in order.