Word: burnham
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...abrupt fall of the Berlin Wall thousands of miles away, the collapse suddenly confirmed what everyone in the financial world could already feel in the wind: a new era had arrived. After a desperate three-day search for cash in which it was spurned by its bankers, Drexel Burnham Lambert Group filed bankruptcy papers an hour before midnight last Tuesday...
...rating began sliding, and its banks cut off credit two weeks ago. The parent company, starved for cash, began to siphon money from the investment firm's coffers until Government regulators halted that maneuver. After a frantic search for a bank bailout or a merger partner, directors of Drexel Burnham Lambert Group agreed to put the company into bankruptcy proceedings...
With justification. Burnham, a veteran investigative reporter and author (The Rise of the Computer State), suggests that the IRS frequently uses its extraordinary powers of coercion in a presumptuous and reckless manner. He illustrates the charge with numerous cases, a few obviously selected for comic relief: the New York teenager, for example, who questioned the constitutionality of the income tax in a letter published in the Buffalo Courier-Express. Suspecting criminal noncompliance, 15 agents tailed the boy for four days, discovering that he talked to his mailman, ate pizza and read pornographic magazines. True, he never filed a tax form...
That the IRS is another flawed bureaucracy is no surprise. When accountants find time for lunch they speak of little else. Whiffs of scandal occasionally become gusts, like a former IRS assistant commissioner who could not adequately explain why he charged the agency for airfare to visit his girlfriend. Burnham's audit includes abuses and inefficiencies that date back more than 50 years. Recent probes by the General Accounting Office have discovered broad areas of error and mismanagement. A study covering 1987, notes Burnham, concluded that the IRS failed to keep orderly accounts of its $1 trillion annual collections...
There are worse transgressions. Burnham cites cases of illegal IRS wiretapping, a bias against liberals and a frequent blind eye turned to its own regulations. Two years ago, the House Commerce, Consumer and Monetary Affairs subcommittee convened hearings on IRS procedures. Two weeks ago, the service announced a new ethics plan...