TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Sunday, December 31, 2017

The IRS Scandal, Day 1697: Budgetary Evisceration After Tea Party Targeting Allegations Has Left The IRS Incapable Of Implementing The New Tax Law

IRS Logo 2New York Times editorial, Don’t Cheer as the I.R.S. Grows Weaker:

[A]s it prepares to implement the most sweeping tax overhaul in 30 years, the I.R.S. is perhaps weaker than it has ever been. In 1986, the last time Congress passed major changes in the tax code, it included a budget increase for the agency, allowing it to hire 2,100 more employees to carry out the changes. Earlier this year, as the agency struggled to do its job with a decimated staff, a shrinking budget and decrepit computers, its commissioner pleaded with Congress to at least give it time to prepare for the big tax overhaul Republicans wanted.

That didn’t happen. Instead, Republicans rushed hastily written legislation larded with amendments through both chambers. Even before this hash hit their desks, I.R.S. officials were warning about the potential for a catastrophic breakdown that could imperil our tax system. Then, at its busiest time of year, the agency was given a week before the tax law goes into effect to translate hundreds of pages of conflicting provisions, potential loopholes and unintended consequences into coherent guidance for taxpayers. ...

Americans should reserve their rage for Republicans, who have spent years targeting the I.R.S. for political gain. Since 2010, Congress has cut the agency’s budget by nearly $1 billion, or 18 percent, adjusted for inflation, as the I.R.S. processes about 10 million more tax returns. Its work force has been whacked by 21,000, or nearly one-quarter; taxpayers who need help — often individuals preparing their own returns — have a hard time getting anyone to answer the phone. ...

There is no permanent commissioner leading the I.R.S. Its last one, John Koskinen, left in November at the expiration of his term. Mr. Koskinen had spent a big chunk of his time on Capitol Hill, being lambasted by Republicans over allegations that the Obama-era I.R.S. unfairly targeted conservative political groups seeking tax-exempt status. A report released in October by the Treasury Department’s inspector general found that the I.R.S. had also scoured left-leaning groups’ applications for tax-exempt status as part of its effort to identify groups focused on politics, not “social welfare,” as the rules for tax-exempt status require.

The agency apologized for its improper audits, and a Justice Department investigation found mismanagement but no evidence of a crime. Though the audits occurred before Mr. Koskinen came aboard, Republicans clamored for him to be impeached, an action not taken against an administration official besides the president since the 1870s. The dumb and unsuccessful effort was led by legislators like Jason Chaffetz, then a Republican congressman from Utah, who view the I.R.S. as symbolic of “big government” and think that killing it outright might be a good idea. ...

Pounding a perennial punching bag like the I.R.S. scores easy political points among Americans who associate the agency with an unpleasant April deadline. We get it. But if the agency that collects more than 90 percent of the government’s money stumbles, all Americans pay, and they can look to Congress, not just the I.R.S., in assigning the blame.

(Hat Tip: Bill Turnier.)

https://taxprof.typepad.com/taxprof_blog/2017/12/the-irs-scandal-day-1697-budgetary-evisceration-after-allegations-of-tea-party-targeting-has-left-th.html

IRS News, IRS Scandal, Tax | Permalink

Comments

The IRS losing funding is a great thing. Better yet 20% paycuts for all those goldbricking, no integrity government employees. As they said in the USSR, since they pretend to work we should pretend to pay them

Posted by: wesmouch | Dec 31, 2017 1:19:12 AM

"No evidence of a crime". Yes the IRS destroyed (lost) evidence under subpoena. Lerner took the fifth.

Posted by: wesmouch | Dec 31, 2017 1:20:49 AM

"But if the agency that collects more than 90% of the government’s money stumbles..."

Actually, it collects about 85% of all federal taxes owed, even in the good times when the IRS next was feathered. The tax gap, which the IRS calculates itself, has been unchanged since 2001, around 85%.

So I'll translate this story: "After being found guilty of viewpoint discrimination, which is unconstitutional, in the court of public opinion, the IRS went back to basics and is now pleading poverty."

I'm all broken up...

Posted by: MM | Dec 31, 2017 1:17:09 PM

The IRS will just have to make do with less. Next time they think about targeting conservatives, maybe they will think twice.

Posted by: Randall Finley | Dec 31, 2017 4:12:58 PM

Perhaps the IRS could just do its basic job and not hand out bonuses to people who hound and harass in a partisan manner? Heck, they might even get an increase next year.

Posted by: JorgXMcKie | Dec 31, 2017 4:14:08 PM

Paul, you've been on top of the IRS scandal since the beginning. Could you please address the claim that, since the IRS blocked both right-leaning and left-leaning groups, there's no real scandal—just poor judgment?

My usual response is that just because the mesh of the net is fine enough to catch a few fish you're not going after doesn't mean that you aren't going after fish. If a left-leaning group had a name with key words like those of right-leaning groups, it might be blocked, too. But the key words themselves were chosen to block right-leaning groups preferentially and that was their effect: by far more right-leaning groups were blocked than left-leaning.

Posted by: Dave Schuler | Dec 31, 2017 4:32:29 PM

The IRS could have handled this two ways. One was to bluster and threaten and be arrogant. The second was to address the issue, embrace their role as a nonpartisan agency, and root out the partisan warriors.

They - Koskinen and Lerner et al. - chose the former, and now the IRS will be fixed from the outside. We do need a strong, functioning, nonpartisan IRS, and we will get it back, but it's a bit late for them to be complaining that we don't think of them that way yet.

They're like a small child, caught stealing and now crying that we don't trust them. They're correct.

Posted by: bobby b | Dec 31, 2017 5:26:49 PM

What a shame ! Maybe cut down on the porno viewing would help.

Posted by: Mike K | Dec 31, 2017 5:38:27 PM

They can re-assign some of the people who were assessing and collecting Obamacare penalties.

Posted by: Smitty | Dec 31, 2017 5:46:21 PM

If the author cannot be honest about the IRS targeting; why should I believe his narrative about funding problems?

Posted by: thomass | Dec 31, 2017 6:51:34 PM

Wah! When i retired from the Air Force almost two years ago, military manning on staffs not directly supporting Mideast operations was held to just 35% of their authorized manning. By comparison, the IRS is almost fully manned.

Posted by: Joe Blough | Dec 31, 2017 7:20:20 PM

apologizes do not cut it. the irs is NOT a worthy organization and has shown itself to be 100% corrupt
until lehrner and the others are prosecuted ALL employees and supporters of the irs are no better than child molesters

Posted by: Deserttrek | Dec 31, 2017 10:33:41 PM

Let them eat cake.

Posted by: 30-year Prof | Dec 31, 2017 11:03:08 PM

Simplifying the tax code should make it easier on everyone, even the IRS. If they want to play #resistance and muck up the system, that's on them.

Pounding a perennial punching bag like the I.R.S. scores easy political points among Americans who associate the agency with an unpleasant April deadline.

No, people know its congress that takes their money. There are problems with how the IRS treats people during audits and what not but most of the outrage is because the IRS was complicit in acting as a wing of the DNC and attacking their enemies with the full force of federal law.

And those old computers? That was just the excuse for all the destroyed hard drives.

There might have been a very small number of left leaning organizations that didn't get their tax exempt status but it isn't even comparable to the volume of those leaning right that were targeted. And we can't forget that some Democrat groups got preferential treatment from the IRS, like Obama's own campaign organization OFA.

We also shouldn't forget it wasn't just Tea Party groups targeted but also Pro-Life and Jewish groups. That Jewish groups who were opposed to the Iran deal were targeted is proof that this pogrom was directed by Obama himself.

Obama engaged in abuses worse than Nixon and was also anti-semitic in his targeting of victims. How could the media, who claim to be about speaking truth to power now, let this all slide?

Posted by: wodun | Dec 31, 2017 11:06:46 PM

Quote: The agency apologized for its improper audits, and a Justice Department investigation found mismanagement but no evidence of a crime.

Apologized? Politicizing the IRS and using it to go after Obama administration opponents should mean long, long, long prison sentences—as in no parole hearing for 20 years.

Short of staff? Well, you can work 80 hour weeks and get paid for 40 for all I care. You clearly have no concept of what it means to work for the government in a democratic society.

Nor apparently does the NY Times. They seemed disappointed that Obama, a Chicago machine politician, wasn't able to federalize the Chicago machine.

Posted by: Michael W. Perry | Jan 1, 2018 3:57:49 AM

bobby b. is correct. Harry Truman cleaned house when he found corruption there. Obama covered it up. Big difference.

Posted by: Smitty | Jan 1, 2018 8:40:57 AM

Thankfully the next shutdown breakpoint is January 19th. If we get a shutdown once filing opens, the people who process tax returns and tax remittances are on the “work without pay” exception list. There would be no refunds and even TAS would be gone as they only have a limited exception to secure their mail. All the staff would be forbidden by law to volunteer to work without pay.

Some excitement is coming. There are curveballs possibly in store.

Posted by: Stephen Kellat | Jan 1, 2018 2:26:16 PM