The National Commission on Restructuring the Internal Revenue Service (the "Commission") was established to review the practices of the IRS and to make recommendations for modernizing and improving its efficiency and taxpayer services. The Commission report was issued on June 25, 1997, and contained recommendations relating to executive branch governance and management of the IRS, Congressional oversight of the IRS, personnel flexibilities, customer service and compliance, technology modernization, electronic filing, tax law simplification, taxpayer rights and financial accountability.

S. 1096 (the "Internal Revenue Service Restructuring and Reform Act of 1997"), introduced on July 30, 1997, by Senators Kerrey and Grassley, generally followed the Commission's recommendations. A similar bill, H.R. 2676, was passed by the House on November 5, 1997.