DATE: Wednesday, October 22, 1997           TAG: 9710220493

SECTION: FRONT                   PAGE: A5   EDITION: FINAL 

SOURCE: ASSOCIATED PRESS

DATELINE: WASHINGTON                        LENGTH:   58 lines

NOMINEE FOR IRS DIRECTOR MUST COMMIT TO REFORM

A centerpiece of the Clinton administration's plan to revamp the IRS is the selection of a Virginia technology executive to straighten up the agency's computer and customer service problems.

For all of his qualifications, Charles O. Rossotti's first task will be to convince Senate Republicans at his confirmation hearing this week that he is serious about delivering the far-reaching reforms.

``Let me be very clear: Mr. Rossotti's confirmation by the Finance Committee will happen only with a powerful and undiluted commitment to reform,'' committee Chairman William V. Roth Jr., R-Del., said over the weekend.

Rossotti, chairman of American Management Systems Inc. in Fairfax, could bring a definite change in style and management to the Internal Revenue Service. At Senate hearings last month, the agency was accused of abusive treatment of taxpayers while seeking retribution against whistle-blowers.

Rossotti's company has a reputation for a far different corporate culture. For the fourth year in a row, Working Mother magazine this year cited American Management Systems as one of the nation's 100 best companies for working mothers.

Colleagues praise Rossotti as insightful and personable, with his company possessing a record of dealing with complicated technology projects at IBM, the National Football League and the California Franchise Tax Board.

The White House departed from the practice of selecting a tax lawyer to head the IRS, saying a skilled manager with experience in complex technology issues will be better suited to modernize the IRS and regain the confidence of taxpayers.

``I would think his big contribution would be to rationalize the technology the IRS uses, to make sure the government gets its money's worth,'' said Cato Carpenter of the Baltimore-based investment firm Alex Brown & Sons that follows Rossotti's company.

The 56-year-old New York City native founded American Management Systems in 1970 and saw it grow quickly into an international business and technology consulting firm. He launched the business after a stint in the Nixon Defense Department, where he was one of the fabled ``whiz kids'' under then-Defense Secretary Robert McNamara.

The company has 7,000 employees worldwide and 1996 revenue of $812 million. That may seem big, but American Management Systems is dwarfed by the 102,000 IRS workers who collect $1.5 trillion in taxes.

``He had a knack, or simply good instincts, to know what direction the company ought to go,'' said Carpenter.

Rossotti continued making the rounds through the Senate on Tuesday, visiting with Sen. Bob Kerrey, D-Neb., a member of the Finance Committee. With his confirmation hearing scheduled for Thursday, Rossotti declined to discuss his career or plans for the IRS with a reporter.

Rossotti has profited handsomely from his company's growth. He owns 1.39 million shares of American Management Systems, according to company documents, a stake worth about $27.8 million at the stock's current price. ILLUSTRATION: Charles O. Rossotti

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