Tax Analysts Blog

IRS Bashing Can Be Fun But Also Expensive

Posted on Jun 4, 2013

Beating up on the IRS is lots of fun, and in recent weeks, it’s been a bipartisan pastime. In fact, the agency itself has gotten into the act. "Like so many, the IRS community is shocked and appalled at the use of political labels inside one part of the organization,” acting commissioner Danny Werfel told Congress recently. The agency’s missteps are “an affront to the mission of the IRS and their solemn duty as civil servants to fairly administer our tax laws."

Before anyone gets their righteous indignation out of joint, let me engage in a little of my own IRS bashing. There is no question that the agency has done some bad things lately, especially with regard to exempt organizations. (The pseudo scandals over expensive meetings and lame videos are small potatoes.) Agency apologists have been testing the waters with a variety of arguments, most of which boil down to the suggestion that conservative 501(c)(4) applicants deserved the scrutiny they got. Maybe so. But of course, the issue isn’t the scrutiny, but the profiling that triggered it, and ideological profiling is simply unacceptable.

There are still plenty of questions about the profiling that actually went on in Cincinnati. And yesterday’s testimony by Treasury inspector general Russell George left many of the important ones unanswered -- like where the idea for extra Tea Party scrutiny actually originated.

But in an effort to pry more information out of the IRS, at least one Republican lawmaker has offered up a very bad idea: cutting the agency's budget. House Appropriations Committee Chair Hal Rogers, R-Ky., put the agency on notice. "I don’t need to remind you or anybody else," he told Werfel yesterday, "that the power of the purse rests with the Congress, and we’re prepared to use that purse to get to the truth."

This is the sort of situation that just begs for a tired aphorism, so let’s go with “cutting off your nose to spite your face.” Slashing the IRS budget is self-defeating and illogical – a ridiculous response to the acknowledged failures at the agency. The answer to dysfunction is not budgetary starvation; an underfunded IRS will make more mistakes, not fewer.

Indeed, asking the IRS to do a better job with fewer resources is a sure-fire recipe for repeated failure. And maybe that's the point. After all, a failing IRS makes for good political theater.

But ultimately, no one benefits from a dysfunctional IRS, least of all taxpayers. Lawmakers would do well to remember that those taxpayers are also voters, and when election time rolls around, the IRS won't be on the ballot. Just the lawmakers who presided over its failures.

Read Comments (5)

edmund dantesJun 4, 2013

Mr. Thorndike, you are underplaying the magnitude of the problem, just as the
press has. The issues go well beyond improper profiling. They include
improper and inappropriate treatment of taxpayers after they were singled out,
treatment that has never been suffered by liberal groups. Here's recent
testimony you must have overlooked:

There are also credible allegations of several different leaks of confidential
tax information from conservative taxpayers by IRS employees, leaks that were
used by liberal media outlets in the course of the 2012 elections. Leaks that,
when proved, will be felonies.

This is a major institutional problem, this politicization of the IRS. It has
to be corrected. IRS is not cooperating--Lois Lerner has asserted a Fifth
Amendment right to not reporting to her employer on her own activities as an
employee! IRS Commissioners repeatedly lied to Congress about the existence of
the targeting, and they are not being held to account for it!

The people who committed these crimes are paid multiples of what ordinary
Americans earn. How are we supposed to feel about this? Budget starvation is a
perfectly understandable response when there is no other form of accountability
being exercised.

edmund dantesJun 5, 2013

All in all, I'm surprised that the Tax Analysts bloggers don't take this
scandal more seriously. I guess you are all Democrats. The integrity and
professionalism of the IRS has been severely damaged, and that won't be easy to
repair. More money for IRS is absolutely not the answer. A wholesale
housecleaning is a better place to start.

For a sense of how the general public feels about this, try this link:

Nixon knew he was finished when the crowds started laughing at Carson's jokes
about him.

amt buffJun 5, 2013

The Count of Monte Cristo is correct, but it's also correct that cutting the
IRS' budget would be counterproductive. If we can't fix the IRS while fully
funding it, reducing funding will not help.

edmund dantesJun 5, 2013

Given the continued IRS stonewalling, amt buff, how else might we get their
attention? They are digging in, waiting for the storm to blow over, throwing
sand in the air as a diversion. Many voters are thinking, "What else did you
expect after you put a known tax cheat in charge of the Treasury?" Not a
healthy situation.

The Ohio IRS agents are telling their side, and they don't want to be the fall
guys. They got their marching orders from DC, and DC ain't talking. The only
language the bureaucrats understand is budgets. They just might start to
cooperate if they sincerely believe they have no other choice, because they'll
be defunded. They already have demonstrated a complete lack of ethics and
personal integrity.

Could defunding IRS lead to temporarily lower tax revenue? Sure. But that
would be a small price to pay for the restoration of integrity to the IRS, and
the certainty that it will never be used for political purposes again.

Nixon was impeached to trying the politicize the IRS, but in those days the
Service had enough professionalism to turn him down flat. Obviously not the
case today.

Von GneisenauJun 10, 2013

As slash of funding would help - it would help b/c it would pressure on
management to get rid of the ridiculous UNION contracts the IRS has in place.
Then, they would be forced to cut salaries and cut jobs. The IRS, like much of
the DC bureaucracy has become a full employment reservoir for the unemployable
- not an efficient government agency. Slashing staff by 60-80% and getting rid
of corporate tax gimmicks would produce a slew of revenue at a much lower

I would like to see the IRS produce a collections per IRS employee chart in
real dollars from the beginning. A typical measure of profitability in a
normal organization.

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