Internal Revenue Commissioner John Koskinen and his agency deserve better than they’ve gotten from the Republican-run Congress. The agency’s never been popular, of course, but current problems likely are largely the result of the agency’s missteps in trying to determine which nonprofit groups qualified for special tax exemption designations.
In the course of that effort, some agency workers used terms like “tea party” in sorting through the groups. An uproar from conservatives, claiming the IRS was after the tea party, ensued. The IRS was simply trying to enforce the law by indentifying groups that masquerade as tax-exempt “social welfare” organizations, but act on behalf of politicians and political campaigns.
Republicans have responded by hammering the IRS, making it harder for the agency to ensure that businesses and individuals pay their fair share. The IRS budget has been cut five years in a row. Koskinen says that, adjusted for inflation, the IRS budget hasn’t been this low since 1998. He has told employees that the agency will lose, through attrition, about 1,800 tax collectors and do more than 40,000 fewer audits this year. He’s even talking about a furlough, about shutting the agency down for a couple of days.
And the head of an independent office inside the IRS says services to taxpayers will suffer because of budget cuts. Nina E. Olson is in charge of the Taxpayer Advocate Service. The New York Times reported that Olson wrote in an annual report that the agency’s ability to assist taxpayers and answer questions has been seriously hampered by budget cutting.
Olson also wrote that “tax compliance is likely to suffer over the longer term if these problems are not quickly and decisively addressed.” In other words, people will not fill out their forms or pay their taxes correctly.
Political vindictiveness also could be expensive for all Americans. Koskinen said the loss of collectors or enforcement agents will mean that fewer collections will be made, perhaps to the tune of $2 billion
While “taking it out” on the IRS might be politically popular, it’s not smart. This, after all, is an agency whose responsibilities have grown, including a major role in administering the Affordable Care Act. It’s handling more people and more money than ever.
Know the consequences
Olson wants a taxpayers’ bill of rights to give the agency more credibility with and respect from average taxpayers. Koskinen simply would like for members of Congress to understand the consequences of their actions, of those feel-good moves like cutting the agency budget while offering their views on all its ills.
Sure, the agency made mistakes with its investigations pertaining to the tax-exempt status of some organizations, moves that appeared to be politically motivated whether they were or not. But that doesn’t justify Republicans in Congress taking the scalpel to the agency’s nose to spite the federal government’s face.
In the end, more honest taxpayers who try to do the right thing and seek help from the IRS to do it will get weary of 30-minute waits on the phone caused by staffing shortfalls. So they’ll carry on, as best they can. Meanwhile, tax cheats will rejoice in the fact that fewer “enforcers” will be on staff to come after them, and, yes, more of them will get away with picking Uncle Sam’s pocket. The N&O’s recent “Contract to cheat” series on contractors who avoid payroll taxes showed how extensive underpayment and nonpayment of taxes can be
That is the practical, not the emotional, reality that comes into play when the IRS becomes a target of self-serving politicians.
The fund for the IRS needs to be restored and then boosted. More investigators and collectors need to be hired, and the agency certainly should have enough funding to provide assistance to American taxpayers by telephone and in person. Because whether we like to admit it or not, when the IRS does its job, we are all better off.