IRS responsibilities today revolve not only around tax collecting, but also include policing social and economic policies with limited resources. The passage of the health care bill add exponentially to an already packed list of administering homebuyer credits, economic stimulus disbursements, and work pay credits, among others, he noted. You can listen to a podcast of the interview with [former IRS Commissioner Mortimer Caplin] here.
“It tends to move the IRS from its basic responsibilities, which is to help raise the revenue of this country,” he said. “IRS personnel are people with accounting, economic and investigative abilities. The new programs require them to carry out other functions for which they’re not qualified.”
For example, he noted, “Even the Earned Income Tax Credit could have been handled by Health and Human Services. What has happened is that there are a tremendous amount of fraud and deficiencies associated with the program. This has produced a great loss of revenue, because the Service has to focus attention on the wrong returns. Rather than looking at high-income returns, with, say, foreign investments, they have to examine the EITC. Their mission has been watered down.”