The Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. No. 105-206, 112 Stat. 685 (July 22, 1998), resulted from hearings held by the United States Congress in 1996 and 1997. The Act included numerous amendments to the Internal Revenue Code of 1986.

In the hearings, auditors of the Internal Revenue Service (IRS) testified that their managers used quotas (Quotas are rife throughout the IRS, being thought necessary, to keep non-work motivated people working hard). The auditors testified that when they did not "produce" a certain number of taxpayers cheating/per day, every day, the auditors were given low ratings on their yearly reviews. Ratings are from 1-5, 5 being the best. IRS workers not getting a 4 or 5 cannot obtain better positions or go into management, because yearly ratings are given so much weight in job competition that, as a practical matter, only 4s or 5s can move up. 3 rateds ("average") are rarely able to move past the first job they were hired into, no matter their competency or training. Year end bonus monies are only given to 4 & 5 rateds . Moreover, employees rated 1 or 2 are "counseled" by their managers, including being fired if they continue being 1 or 2. The auditors' response was to "game" the system to meet their quotas, arbitrarily assessing additional taxes to honest taxpayers who did not actually owe anything. Congress responded with a Code of Conduct for the IRS. For auditors and the Criminal Investigation division, quotas were abolished (managers in these two sections must sign yearly statements certifying that they are not, by overt or implicit or any other means, imposing quotas on their analysts. Quotas were, however, retained in many other tax pipeline divisions.

Internal Revenue Service