by Linda Beale
Defending the IRS Against Right-Wing Attacks
The IRS is a government agency that endures all kinds of hostile attacks. Most people don’t really like to pay taxes. Even I don’t really “like” paying taxes, though I do recognize the importance of paying taxes and supporting the societal infrastructure that pays for the Centers for Disease Control, basic research, the space telescope, programs for those in or near poverty, Pell Grants for students to attend college and many other important and necessary federal programs (not to mention the tax-guzzling military budget that probably could be cut in half, if only we had the gumption to do it). So the right-wing effort to “drown the government in a bathtub” and make the world safer for the corporatist elites to sock away their wealth without paying a dime to support the society that made that wealth possible tends to demonize the IRS at every possible opportunity under a Democratic president.
ASIDE: This is on a par with the way other things are treated. Reagan cut taxes in 1981 and then increased them every year thereafter, mostly increasing the burden on those in the lower end of the income distribution, so Reagan is remembered as the great tax cutter. Reagan’s administration had the Beirut bombing that killed 241 U.S. soldiers in their barracks, but Obama’s administration bears the millions of dollars spent in eight (and counting) investigations of the four deaths in the Benghazi attacks. There is a tendency for people to remember events and fiscal policy to suit their preconceived view of things.
So the New York Times on Friday reported on the havoc that the right’s attacks on the IRS’s budget and its employees’ morale has wrought. Congress writes the tax laws, but the right tends to talk about the executive agency as though it ‘owns’ the tax laws instead. I.R.S. Fights Back Against House Republicans’ Attacks, New York Times, Apr. 22, 2016. As the article notes, “the agency even got the blame for the hated tax code, which Congress writes and Republicans have promised for five years to rewrite and simplify.” (And remember, simplification is the wrong aim–it is part of the propaganda that wants ordinary Americans to support a tax code rewrite that tilts the code even further towards the wealthy. See the last two posts on Angry Bear.)
As certain as death and taxes, tax season political attacks on the I.R.S. go back decades. But in recent years, the intensity has grown and the agency’s funding in turn shrank more than any other time in memory. The campaign gained strength in 2013, when Republicans seized on management failures to allege that I.R.S. employees had singled out conservative groups for greater scrutiny and delays in reviewing their applications for tax-exempt status as “social welfare” organizations, though liberal-leaning groups were examined as well, investigations showed.
Clearly, the IRS is a centrally important agency that cannot be eliminated. We need to collect taxes, and we need an agency with the expertise to advise Congress about tax law and policy as well as to interpret the laws in a way that makes it possible to implement them. (Congress has a tendency to leave anything really difficult to the IRS to figure out, by authorizing or ordering the Secretary of the Treasury to promulgate regulations carrying out the intent of specific provisions.) We need to have sufficient IRS staffing to enforce the law through tough audits, especially of the wealthy and corporate enterprises. We need to have sufficient funding to maintain updated technology–one of the problems with the cuts in funding to the IRS is that the computer systems are more easily hacked than they should be. That fault lies with Congress, which expects managerial miracles from an agency with constant battering from the right-wing to try to demoralize its employees and constant resource cuts that make budget planning and regular maintenance of systems practically impossible. When Congress adds additional functions to the agency (whether in the form of additional tax systems to oversee, such as the penalty provisions in the Affordable Care Act, or additional tax expenditures operating as a subsidy to one or another of Congress’s favored groups, such as the section 199 “manufacturing” deduction) but fails to add funding to cover the additional responsibility, it means that the IRS’s ability to carry out its task well will be jeopardized, and service to taxpayers will decline.
“The Congress on one hand adds complexity to the tax system by the tax laws they enact but will not recognize the costs and administrative burdens placed on the agency to carry out the laws it passes,” said G. William Hoagland, who was a senior budget adviser to Senate Republican leaders for more a quarter-century.
The fact is, the IRS makes money when Congress gives it funding to ensure tax compliance: as the article states (and many studies support), “the agency collects at least $4 for every $1 it spends for tax compliance.” Former IRS commissioners–during Republican and Democratic administrations–therefore joined together to urge Congress to undo the perverse results of underfunding the IRS.
“Over the last 50 years, none of us has ever witnessed anything like what has happened to the I.R.S. appropriations over the last five years and the impact these appropriations are having on our tax system,” they wrote.
Federal reports document the impact. Tax audits are at the lowest level in a decade, affecting fewer than 1 percent of taxpayers. Reduced efforts to enforce compliance cost an estimated $6 billion in uncollected revenues in 2014 and $8 billion in 2015. The I.R.S. has a backlog of almost a million pieces of correspondence from taxpayers.
Stan Collender, a budget analysis, is right when he says (as quoted in the article):
“You really shouldn’t be able to reduce the amount you spend on I.R.S., decrease their performance ability and then complain about their performance.”
cross posted with ataxingmatter