FROM THE OFFICE OF PUBLIC AFFAIRS

It is a pleasure to join you today and say a few words about the 1999 tax filing season, which begins today. As taxpayers prepare their taxes this year, I believe they will find an improved IRS, one that is more customer friendly, better equipped to answer questions, and with more opportunities to utilize technology when filing.

Beginning about three years ago, the Administration began a highly intensified process of reform at the IRS. We recognized that there were very substantial problems at the IRS that would not be solved quickly, and we have devoted a great deal of time and resources to moving forward on those problems. Since then, we have made real progress in using technology more effectively, which was the first matter we addressed, doing more to guarantee fair treatment of taxpayers, and improving customer service.

For example, during the 1998 filing season, the IRS answered over 37 million taxpayer phone calls and there were 40 million fewer busy signals. A surge in e-filing brought the total number of individual returns filed electronically since the program began in 1986 to over 100 million returns. Last November, we celebrated the first anniversary of the very successful "Problem Solving Days, when taxpayers can sit down and meet face to face with an IRS representative to help resolve a particular problem. Approximately 32,000 taxpayers have taken advantage of this innovative program with even more taxpayers expected to participate in 1999.

We now have 24 hour a day/seven day a week phone service, and have expanded service at over 170 sites leading up to April 15th. And this summer, the Administration worked with Congress to pass a major bill which marks a significant step forward in reform at the IRS.

However, there is still an enormous amount to do. The problems at the IRS developed over years, even decades, and it will take time to fix them. There are no quick fixes or easy solutions, but dramatic change is an absolute necessity. And I want to tell you that we are committed to accomplishing that goal.

In addition to the changes we have made at the IRS, this year taxpayers can look forward to a number of new tax breaks that will make it easier to raise a child, get an education, or secure health insurance. Taxpayers may claim a tax credit of up to $400 for each eligible dependent under the age of 17. There are new Hope post-secondary education and lifetime learning credits. And self employed individuals may deduct up to 45 percent of their health insurance premiums.

Let me close with one more thought. No one likes to pay taxes, yet one of the things that has been lost in the debate around the IRS over the last few years is the critical function that the IRS performs. The IRS collects 95 percent of the federal government's revenue -- revenue that funds essential activities of government that contribute enormously to the well-being of the American people, from the nation's defense, to social security, to college loans. And by enforcing the tax laws, they make the tax system fairer. Those who pay their fair share shouldn't have to bear the burden of those who avoid paying their taxes.

Let me also say a word about Charles Rossotti. He came to the IRS a little over a year ago, bringing his experience as a CEO of a large public company to bear on the problems at the IRS. In that short time, he has really done a tremendous job in leading the IRS on the path of reform. President Clinton, the Vice President, Commissioner Rossotti all have demonstrated a tremendous commitment to reform at the IRS, and we at Treasury and the IRS are committed to doing everything possible to continue on the reform path and create the kind of IRS Americans deserve and need. Thank you very much.