Sunday, May 05, 2019

Can the IRS be Saved?

Paragraph we never expected to read in the newspaper:
One 2020 candidate already has a bold proposal to resuscitate the I.R.S. It’s a plan to pump tens of billions into the agency, enough to fund a second army of agents. That candidate’s name is Donald Trump.
In political folklore Republicans are known for disliking federal taxes and fiercely disliking paying taxes, so the future of the president's budget proposal is anyone's guess.

Still, this op-ed by two Politico reporters reminds us that the IRS is an endangered bureaucracy, underfunded and understaffed. Notably lacking: hundreds of highly-trained auditors needed to go toe-to-toe with aggressive tax planners.

Will the IRS receive the many billions needed to restore the agency to fighting trim? Probably not, unless the president is tired of being the only high-income celebrity under constant audit.


Jim Gust said...

That's a terrible article, but par for the course for the "new" New York Times.

The simple fact is that the IRS has plenty of money, what they lack is proper priorities and decent leadership. More money does not change that.

Here's the key fact that the Times did not see fit to print. The IRS was weaponized against political conservatives. The aim was to hamstring grass roots opposition to Obama and the Democrats. That effort succeeded. Belatedly, the IRS was caught, but no one was punished. The necessary housecleaning to weed out corruption never happened. Sure, the conservative groups had their attorney's fees paid in an IRS settlement, but their moment for political influence and stopping Obamacare passed. The bad guys won.

Budget cuts were the appropriate response to this abuse of the IRS and the open abuse of taxpayers. They should probably have cut much more, until the IRS got serious about reformation. They still have not. Once politicized, the IRS will now be very difficult to salvage. I have no sympathy for them in their contests with the tax planners. The cases coming before the Tax Court show a real talent deficiency at today's IRS, where Political Correctness appears to have triumphed over sound tax administration.

JLM said...

Politically-active conservative groups surely outnumbered their liberal counterparts, but according to Treasury's IG, the IRS mistreated both. sides. I don't feel sorry for any of them. Make billionaires play politics in the open; don't let them hide behind tax-exempt "social welfare" groups.

Jim Gust said...

I agree with you, but for a different reason. "Social welfare" groups should not be tax exempt at all.

Liberals have had very large politically active tax exempt groups for years--the Sierra Club comes to mind--and there was never any investigation of them. It only became an issue when conservatives tried to get in on the game.

The investigations were intended to shut down the Tea Parties, and they worked. That is corruption. The direction was never pinned on Obama, which is actually worse--IRS employees took it upon themselves to do what they thought he wanted. They were never punished for their political interference.

Yeah, the IRS claimed that liberal groups were targeted also, but the evidence of that was very thin. The cases reported in Tax Notes showed some very serious wrongdoing against conservatives, nothing remotely comparable against liberals. The IRS was putting completely inappropriate questions to conservative groups, and delaying action on their applications years longer than the liberals. No liberal groups were actually hindered from their political actions, even if some were lightly scrutinized.

I still have zero sympathy for the IRS. The Commissioners who presided over this corruption were never held to account. They have all the money they need.

Jim Gust said...

As I think about it, the question is not "can the IRS be saved?" it is "should the IRS be saved?" the political rot runs deep, so deep that reformation is likely impossible. an entirely new tax collecting agency that has nonpartisanship as a core value may be the only way to get there.

Koskinin was a high caliber stonewall artist, frustrating Congressional investigation at every turn. now they seem to have lost interest, even though the fundamental problems remain unaddressed.

That NYTimes article is essentially just a rewrite of IRS PR begging for more money, without any plan for how it will be put to better use.