Tax Analysts Blog

Slashed Budget Shows IRS's Failure to Build Political Support

Posted on Dec 16, 2014
In June House Republicans proposed funding the IRS at $10.9 billion, a cut of over $300 million from last year's budget and $1.5 billion below the president's request. At the time, the proposal was seen as a gesture to show the GOP's displeasure with the agency, and no one thought it would ever make it into law. Well, over the weekend the Democrat-controlled Senate agreed to an omnibus spending bill that included those deep reductions to IRS funding. For the last few years, the nation's tax collector has thumbed its nose at conservatives, and now the bill for that action has finally come due.

Republicans made it clear that the cuts to the IRS were in response to the agency's recent actions. The GOP has a long laundry list of complaints: the payment of IRS bonuses, the failure to accurately and timely answer questions about the exempt organization scandal, old training videos, and the cost of Obamacare implementation. With the exception of the last item, the Service has been tone-deaf in its response to Republicans. In fact, one might even call some of its vague and misleading answers outright defiance of the House majority. That's an odd strategy for an agency crying out for more resources to take.

IRS Commissioner John Koskinen has made it clear that taxpayers and practitioners will suffer just as much as IRS employees if these cuts come to pass. He and other officials have pointed to the fact that IRS telephone responsiveness might drop to 53 percent this year. Far from building support on Capitol Hill or resonating with House members, Koskinen's frequent claims of poverty seem to only provoke GOP lawmakers. "They tell me they're outraged they can only answer 53 percent of the calls; I tell them I'm outraged they just paid [millions] in bonuses to people, some of them who owe back taxes -- get your priorities right," Rep. Ander Crenshaw, R-Fla., said.

The Republican Party has had an axe to grind with the IRS for years. From the moment President Obama was elected in 2008, the GOP started crying foul on some of the agency's practices. The EO scandal seemed to confirm the party's worst fears about the IRS (and, in its more paranoid moments, the extent of White House involvement in day-to-day executive administration). Ever since then, Republicans have been eager to call out every IRS misstep, from the infamous Star Trek videos to lavish conferences. The IRS's defenders have been quick to say that Republicans have politicized the agency's budget, which will harm the tax system. To some Democrats, IRS officials, and NTEU members, the GOP has simply been shrill and vindictive, turning slight missteps into months-long scandals.

Those who criticize the GOP's handling of the various IRS scandals have a point. But lost in their reflexive defense of the Service are valid Republican complaints about the IRS's lack of transparency and responsiveness. For whatever reason, the Service decided that it wouldn't cooperate with Republicans over the scandal. Maybe it thought the GOP wouldn't be reasonable. Maybe it thought giving clear answers and admitting obvious wrongdoing would be more damaging to its prospects than being opaque and evasive. Well, it was wrong -- both in hindsight, given the budget passed over the weekend, and at the time, given the agency's duty to be nonpartisan.

From certain vantage points, it seems that the IRS doubled down on thumbing its nose at Republicans over the last two years, perhaps with the idea that Senate Democrats and the president would protect it (and anyone who says this is an unfair characterization hasn't been reading Lois Lerner's e-mails). They didn't. The IRS has no political allies. If it wants to be effective, it has to rebuild its relationship with the majority party on Capitol Hill. It needs to be more open and cooperative with Republicans, and it has to be able to convince at least the more reasonable right-of-center lawmakers that it can perform its functions as tax administrator in an unbiased manner. The agency has woefully failed at that task over the last six years and it needs to make that its top priority during the next Congress.

Read Comments (7)

amt buffDec 16, 2014

The IRS needed to show some backbone by resisting the Administration's illegal
modifications of ObamaCare. Instead the IRS meekly gave the White House every
change it wanted, with no authorization from Congress or the courts.

Why? Staff is policy. Because the IRS is full of Democrats who don't mind
bending the law when it advances their preferred policies.

The IRS will only discover its backbone when a Republican becomes president.
They will claim that they are opposing the President on principle, but their
partisan track record will prove that claim false.

Perhaps the only solution is affirmative action hiring of Republicans for top
management jobs at the IRS. Otherwise it's hard to see how the personality of
the IRS will ever change.

edmund dantesDec 16, 2014

IRS needs to be de-weaponized. Deliberately using IRS for partisan purposes
has destroyed trust in the tax collector, and rightly so. That can only be
remedied with a thorough house cleaning. Lois Lerner is not just a bad apple,
she's the tip of an iceberg.

TIGTA has identified 2,500 email communications in which White House staffers
asked the IRS for taxpayer info. That was most likely illegal, in the vast
majority of cases, but we won't know for sure until we see the emails. IRS is
now stonewalling, refusing to release any of these emails. I have no doubt
that the emails would confirm the Republicans' wildest conspiracy theories,
which is why they have to be buried.

Nonpartisan TaxProfBlog is up to Day 586 of the IRS Scandal. Remarkable.
Tinkering around the edges isn't going to cure this problem. I suspect that
before this is over, a mild budget cut will be the least of the worries at IRS.

Monte JackelDec 16, 2014

Jeremy. Even in a perfect environment where the IRS was not at political
loggerheads with the Republicans, the agency would still suffer, I think, in
terms of being effective due to the culture inside the organization and the
manner in which positions are both budgeted and filled by OMB and the IRS. When
money is plentiful, it seems that the agency does not spend it wisely and the
agency is also constrained in terms of who it can hire because of the amount it
can pay to acquire needed people. And those who continue to work at the agency
find it "very hard to get themselves fired" due to the protections of the NTEU
and others. It has always seemed clear to me that the agency, even if properly
funded, needs to get two things done to be efficient: (1) Get budgeted to hire
highly skilled folks from outside the agency and pay them something remotely
competitive with the going rate in the outside world, and also get budgeted to
promote those inside the agency who are deserving of promotion; and (2) get the
ability to fire those who are not doing their job without "going through hell"
with the union folks. Without those two things, all the money in the world will
not make that place operate efficiently, at least as far as I see things.

Bubba ShawnDec 16, 2014

No politician loses elections by beating up on the IRS.

The FY 2106 and beyond federal budgets will see even more cuts to the IRS
operations budgets.

Linda ValliereDec 23, 2014

Simply stated, Party politics should NEVER have a place in an agency that is
charged with enforcing the country's federal tax laws.

Tax PayerDec 31, 2014

"[T]axpayers and practitioners will suffer just as much as IRS employees if
these cuts come to pass."
I do not understand how the cuts would cause IRS employees to suffer. Aren't
they still going to get their raises? Isn't each employee still going to do
the same amount of work? Won't the job losses mostly be handled by attrition?

Taxman HogJan 8, 2015

The taxpayers and all compliant citizens are going to suffer for years to come,
with the IRS not having the capacity to properly enforce the law's means those
willing to comply will pay more to cover to lost collections occurring every
day. Limiting the number of revenue agents, collections officers, customer
service rep's, correspondence examiners means much less work getting done, the
statutes of limitation on exams is only 3 years, on collections it's 10 years,
all criminal and non-criminal cases are not going to be attended to as they
should be. Billions of dollars are expiring every day due to Congressional
Negligence. I propose Congress' pay be pro-rated according to their timely
productivity!! Let's see, in 7 years they've had what 1 or 2 on time Fiscal
Year budget's? This uninformed divisiveness even amongst professionals
continues to destroy the core of this nation!

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