Tax Analysts Blog

The Beatings Will Continue Until Morale Improves

Posted on Sep 14, 2016

The U.S. Congress operates under two sets of rules, one for the House of Representatives and another for the Senate. The rules in the House are essentially designed to enable the majority party (now the Republicans) to pass legislation at will. On the other hand, the rules in the Senate are designed to enable the minority party (now the Democrats) to block legislation at will. If people wanted to design a government in which the representatives were powerless to act absent bipartisan agreement, these rules would fulfill their wildest dreams.

Because the House majority can generally pass legislation at will – without regard to whether that legislation will ever become law – the matters that come up for a vote on the House floor generally reflect the priorities of the House leadership. This largely explains why the House has engaged in the quixotic act of voting more than 50 times to repeal some or all of the Affordable Care Act.

But the matters that reach the House floor do not always reflect the leaders’ priorities. A subset of House Republicans often disagrees with the priorities of their leaders. And the rules allow them to force a floor vote. Their most recent override of leadership’s priorities involves bringing to the House floor a resolution to impeach John Koskinen, who has served as commissioner of internal revenue for the past 33 months – perhaps the longest 33 months of his life. And here I side with leadership.

Koskinen was brought in to help the IRS recover from a 2013 scandal over its handling of applications for tax-exempt status by both right- and left-leaning groups. He took charge of the agency, bringing a can-do attitude and expertise from his experience in private industry. He cleaned house in the offending office and changed the way the IRS processes applications for tax exemption.

Koskinen’s problem was that he took office before congressional Republicans had extracted their pound of flesh from the agency that everyone loves to hate. Having decided upfront that the Obama administration had used the IRS to target its political opponents – a conclusion, unlike President Nixon’s well-documented enemies list, wholly unsupported by the evidence – Republicans began investigations to prove their predetermined conclusion. When they found no proof, they attacked Koskinen for failing to produce evidence confirming their view of what happened.

And it wasn’t just Koskinen. Viewing his alleged non-responsiveness as indicative of the agency’s overall unwillingness to perform sufficient penance for the sins committed by a few employees in one small corner of the agency, Congress placed a tourniquet on the IRS budget. And when that failed to elicit the desired outcome – whatever that might be – Congress tightened the tourniquet.

Here’s the problem: In an effort to punish the IRS institutionally, Congress has punished 90,000-plus dedicated employees who did nothing wrong, along with millions of American taxpayers. The best and brightest IRS employees are leaving – and they are not being replaced. Constituents endure unbearable wait times to get IRS assistance and receive poor service when they manage to reach a human being.

What is Congress’s goal? If it expects to improve taxpayer service by starving the IRS budget, impeaching its leader, and berating its employees, Congress will be disappointed. The longer the beatings continue, the harder it will be for the IRS to attract great – or even competent – leaders and employees, and the longer it will take for Americans actually to receive the service they deserve from the IRS.  

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Read Comments (16)

Mike55Sep 14, 2016

Thought provoking stuff, thanks for posting it. A few reactions:

#1 - I 100% agree with you that the House has done a very poor job handling the IRS budget situation. My gripes are somewhat different than yours, but we get to the same place so no need to belabor the fine details.

#2 - I 100% agree with you that the House attacks on Koskinen were/are politically motivated. I happen to think Koskinen brought much of that upon himself by being less deferential to the House than was appropriate, but again we ultimately get to the same place, so no need for me to quibble with every point.

#3 - Here's where we disagree: I do think Koskinen should be impeached for the perjury charge (the other charges are silly political fodder, and thus unworthy of discussion). Remember, the House's role is not to decide if Koskinen actually committed perjury, it's to decide whether there's enough evidence for the Senate to hold a trial. I happen to think there is: Koskinen made a false statement under oath (not disputed), the explanation for how it happened was less than convincing (subjective), and the false statement at issue was about something very important (undisputable) and was made to Koskinen's advantage (undisputable). If this were a normal perjury case without the huge political backdrop, I think the elements above would be enough to bring back a grand jury indictment. So why should it be any different here..... just because the underlying motives of the accusers are political? I don't think there's a "political witch hunt" defense to perjury, so Koskinen ought to be impeached and have to defend himself at trial.

Justice TwoSep 15, 2016

Facing a public health crisis with zika, and having to pass a continuing resolution in the next two weeks, as well as dealing with other issues in a jam-packed pre-election season that offers little time for floor debates and voting on important matters, the House is wrong to shove the impeachment to the head of the queue. The vote today reflects the members' priorities more than anything else. And those priorities are completely out of whack with what they should be -- that is, if they are in DC to actually run the government.

Mike55Sep 15, 2016

This of course being the classic "don't you have better things to do?" defense. If it doesn't work to get people out of traffic tickets, it probably ought to fail when applied to perjury as well.

Also, wasn't today's compromise about delaying any House impeachment vote until after the election? I'm not really sure what it is that you want the House Judiciary Committee to do about Zika and the items listed.....

Justice TwoSep 15, 2016

For a House that "works" 3 days a week, priorities matter. The traffic ticket analogy is completely inapposite.

And obviously I wrote the piece before the compromise. Please note that I expressed support for leadership in not bringing this up now.

Mike55Sep 16, 2016

"And obviously I wrote the piece before the compromise."

I was not alluding to the article itself, but rather your response to my comment. That seemed to include a reference the compromise, so I assumed (mistakenly?) that you wrote it after hearing the news.

As for the substance..... I get that priorities matter and the House is busy. That's not my point. It's that the House prioritizing poorly, or chasing Koskinen for the wrong reasons, does not in turn mean that the underlying impeachment action is unwarranted. Koskinen's false statement does not suddenly become true just because the accusers happen to be bad people. Nor does the importance/relevance of the charge become lessened if the accusers are bad people.

Sometimes people do the right thing for the wrong reasons. I think that's happening around the Koskinen impeachment right now (at least with respect to the one perjury charge).

Edmund DantesSep 15, 2016

"He cleaned house in the offending office "

How did Koskinen do that? Who went to jail for the obvious criminality at the IRS? Did anyone lose their job, other than the last IRS Commissioner, who was obviously in way over his head. So far as I know, a few people such as Lois Lerner, who should have been prosecuted, were allowed to retire earlier than they planned, with full pensions. That is not a house cleaning. What about the hundreds of IRS personnel that knew what was going on and kept silent? No consequences for them? IRS still has not acted on many conservative 501(c)(3) applications. They have not changed their ways, except for trying to be more discreet and leaving fewer paper trails.

Destruction of evidence that Congress has demanded doesn't strike you as improper? Certainly I agree with Mike 55 on his perjury point, but I don't agree that the rest is pure politics. The IRS continues to stonewall this investigation to this day! How exactly is Congress supposed to get some cooperation? The tourniquet has been a blunt instrument, but they tried every other alternative first and got nowhere.

When Nixon tried to weaponize the IRS, he was properly rebuffed. Now we have a fully weaponized tax collector, and it is aimed directly at conservatives. This is very bad for tax collections, and it is bad for politics. Don't act surprised when one consequence is the popularity of a Donald Trump. What else can you expect when Washington won't discipline its own?

One important question remains. Did Obama order the weaponization of the IRS? That would be the best case, but there is so far no evidence for it. So then it's the worst case, IRS is so infested with liberal ideologues that they undertook the illegal campaign against conservatives on their own initiative.

In that case, impeaching Koskinen, while appropriate, is insufficient. The entire edifice of the IRS should be torn down, replaced and restaffed with new people and new mandate for the agency to never enter politics again. With explicit punishments and no Fifth Amendment defense for agents who go rogue.

If we are not willing to do that, then yes, please let the beatings go on. I don't care one bit about IRS morale, they have proved over and over that they don't care about mine.

JusticeTwoSep 16, 2016

This is the problem --- the matter has been politicized so much that the agency is paralyzed. An independent investigation found no criminal activity. Those who opine on these matters without evidence as to precisely what employees should go to jail and on what evidence are part of the problem. As for "stonewalling," 99.9% of IRS employees had nothing whatsoever to do with this. Yet they and millions of Americans are being penalized. What IS the end game, and what constructive suggestions (short of fire everyone -- and replace them with whom?) have the House members offered to rebuild the IRS? None, short of requiring people to confess to crimes they did not commit. Impeaching Koskinen does not make the situation any better.

Mike55Sep 16, 2016

"Certainly I agree with Mike 55 on his perjury point, but I don't agree that the rest is pure politics. The IRS continues to stonewall this investigation to this day! How exactly is Congress supposed to get some cooperation?"

My answer to this is that Congress might NOT be able to get cooperation. The correct reaction to that outcome is for Congress to pass new oversight laws that will prevent similar tactics from working in the future. I know a lot of people will find this response unappealing,* but my own ideology is that the ends rarely justify the means.

Impeachment needs to involve at least a misdemeanor level crime. Perjury is a felony and has been used as an impeachment grounds before, so clearly that charge works and ought to be pursued. Stonewalling on the other hand is not a crime until you take it so far that you're found in contempt. No one thinks Koskinen's stonewalling to date is sufficient to sustain a contempt charge, at least not yet. The House of course knows this, hence my accusation the other charges are just politics.

*One mitigating point though: a Senate perjury trial would likely produce a lot of the documents the House feels are being held back.

JusticeTwoSep 16, 2016

One more point: A consistent theme in your posts is blaming the IRS for the sins of Congress. This situation is no different. It is Congress, not the IRS, that has placed politics firmly within the tax code. The code (enacted by Congress, not the IRS) prohibits tax-exempts from intervening in elections, and supporting or opposing candidates for office. And of course the IRS is tasked with interpreting and enforcing the will of Congress. In my view, this prohibition is appropriate, as American taxpayers should not be forced to have their tax dollars subsidize political campaigns.

As for tearing the place down, the overwhelming majority of IRS employees have nothing whatsoever to do with politics. They are dedicated, hard working civil servants who process tax returns, collect taxes due, conduct audits, and investigate tax crimes. Talk about throwing the baby out with the bath water.

Mike55Sep 16, 2016

I don't think you understand why folks are so outraged. It's not because political groups were targeted generally, it's because one specific political group was singled out. There was no "black list" for left-leaning non-profits, nor was there ever a black list for traditional right-leaning non-profits. It was instead those associated with the "Tea Party" movement who were singled out for special IRS attention.

It's hard to make up ground against/within the well established DNC and RNC machines, so any proverbial straw can break the camel's back. A lot of people in the Tea Party think the IRS targeting was their straw. One day they were defeating Republican party leaders in primaries (i.e., Cantor), the next they couldn't even keep their candidates on the main stage during the presidential primary debates. I might not agree with the Tea Party movement, but can certainly understand why they are so upset with the IRS.

Last point Stuart: while I might strongly disagree with your perspective on most things, I do very much appreciate you engaging in the comments. There's no point in voicing an opinion if you aren't willing to defend it, so great job on that front. Also, it makes Tax Notes a lot more fun. Keep it up!

Interested PartySep 16, 2016

I agree with many of the points you make in the article, but you appear to say that there was no political bias by the IRS. That is not supported if you look at the facts of the case. The Inspector General's report showed that 100% of groups that had "Tea Party", "Patriot" or "9/12" in their title were subjected to additional scrutiny. Liberals claimed that the name progressive was also targeted. The IG report showed that 30% of groups with "Progressive" in their name received extra scrutiny, but not as severe as the conservative leaning groups.

A status report from mid 2013 showed that 7 groups with progressive in their name had received additional scrutiny, but all had been approved. Out of more than 100 conservative leaning groups, 46% were approved. Also, progressive groups could be approved by front line employees, but tea party groups could not be approved without the okay from upper management.

I agree with you that the vast majority of IRS employees did not have anything to do with this scandal but are suffering because of budget cuts to the agency. From the emails that were recovered it is evident that several top level IRS officials participated in or knew of this scandal. Let's get rid of them to send the message that we don't tolerate government agencies being used to harass political opponents. Then let's restore funding to the IRS so they can do their job.

Interested PartySep 16, 2016

I enjoyed your post and agree with some of your points. One thing that I believe has already been mentioned is that there is no evidence that I am aware of to tie President Obama to this scandal, but there is ample evidence to show a political bias.

You mentioned Nixon's attempt to use the IRS to harass his enemies. There have been several books and articles detailing both parties using the IRS to attack their political opponents for decades. I for one believe it's time to put a stop to this practice.

Van Lanier, MBA, EASep 16, 2016

The idea that John Koskinen is not culpable in the IRS debacle is ridiculous. He is a life-long Democrat who was recruited to "tamp things down," after a deplorable breach of ethics by Lois Lerner and her staff, who were following orders from the Obama White House. Koskinen is no "turnaround expert." His record with Penn Central, the Teamsters, and Fannie Mae is one of failure, not success. I say this with some conviction, in that I spent 30 years as a turnaround consultant and know the difference between success and failure.

The reality is that Koskinen will be gone in a few months, and will have done his job - stalled things until Obama leaves office. Effective Lieutenant; certainly not a General.

Edmund DantesSep 19, 2016

The tenor of this conversation will change when a "patriotic" IRS employee decides to leak Trump's tax records to the press in October.

Travis RechSep 22, 2016

I'd suggest the Russians would do it, but their hacking is only to embarrass the US and to support Trump so they wouldn't do it.

Interested PartySep 26, 2016

When that "patriotic" employee leaks the records, the house will call Koskinen before them again so he can say "oops". The DOJ and FBI will both say that even though the law was violated there is no criminal intent so they will do nothing.

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