Democracy Dies in Darkness

PowerPost | Perspective

IRS chief departs, blasting Congress for budget cuts threatening tax agency

By Joe Davidson | Columnist

November 7, 2017 at 5:01 PM

Internal Revenue Service Commissioner John Koskinen testifies during a hearing before the House Ways and Means Committee in 2014. (Alex Wong/Getty Images)

Leaving can be liberating.

Republican Sens. Bob Corker (Tenn.) and Jeff Flake (Ariz.) have demonstrated that with their caustic criticisms of President Trump.

Now it’s John Koskinen’s turn.

Thursday is his last day as commissioner of the Internal Revenue Service, allowing his bluntness about Congress on Tuesday.

He started with a veiled dig near the end of his prepared statement during a briefing with reporters.

“I’m hopeful that, in the future,” he said, “the IRS and Congress can have a more rational and reasonable discussion of the resources the agency needs to meet its very critical responsibilities.”

That evenhanded comment, however, masks his more pointed worry.

After listing how the legislature, led by Republicans focused on punishing the IRS and impeaching Koskinen, hurt the agency and taxpayers with funding cuts, he did not equivocate in placing blame squarely on Capitol Hill.

“It’s clearly a matter of fault,” Koskinen said, off script but on message. “That’s my point here, as I leave town. I want people to understand that there are ramifications to, in fact, underfunding the agency. If the agency fails and people are looking for fault, it will be the fault of the Congress. … I am blaming Congress.”

Koskinen had repeatedly warned Congress about the dangers of shortchanging the agency that collects more than 90 percent of the government’s money. But Republicans were intent on penalizing the IRS because they said it had improperly scrutinized right-leaning organizations. It turns out that left-leaning groups also were targeted by that scrutiny, but for much of that controversy the focus was on conservatives.

Congressional retribution meant taxpayer service suffered, or, too often, it simply failed. Because of staffing shortages, there were long telephone wait times for taxpayers, when calls were answered at all. Koskinen outlined two risks that continue to threaten tax administration, saying “this is not a question of ‘whether,’ but of ‘when,’ ” if the budget continues to be cut.

First are the agency’s information technology systems, which Koskinen said “have long been operating with antiquated hardware and software.” He warned “that the potential for a catastrophic system failure is increasing as our infrastructure continues to age.”

The second risk involves people, not things.

The IRS has lost about 20,000 full-time staffers since 2010. That’s a big slice out of workforce that is now about 80,000. About one-third of the compliance staff, those who get taxpayers to pay, was lost. There were twice as many revenue officers in 1954, and there are fewer criminal investigation special agents than at any time since 1971. The number of audited individual tax returns is at its lowest point in 14 years. Criminal investigations are down 11 percent from last year and more than a third below 2010. The number of recommended prosecutions dropped by more than a third from four years ago.

“What these numbers mean is that, without adequate resources, we don’t have enough people to perform all the audits we think are necessary,” Koskinen said.

“If people think that many others are not paying their fair share, or that they’re not going to get caught if they cheat, or they’re just frustrated because they can’t get the help they need from us to file their taxes, our voluntary compliance system will be put at risk,” he warned. “A 1 percent drop in the compliance rate translates into a revenue loss of over $30 billion a year.”

Avoiding enforcement because of budget cuts is good news for some, but Koskinen, in his frankness, demonstrates how it is bad for the rest of us.

“From my first meeting with Commissioner Koskinen, I found him to be candid and forthright,” said National Treasury Employees Union President Tony Reardon. “He was outspoken in his belief that IRS employees are dedicated professionals who care deeply about serving this country’s taxpayers.”

In addition to managing a major agency with a punitive budget, Koskinen had to deal with hostile Republicans who tried unsuccessfully to impeach him. They accused him of providing false testimony, stonewalling Congress and being complicit in the destruction of evidence related to the IRS scrutiny of charitable organizations.

Jason Chaffetz, a Republican and former chairman of the House Oversight and Government Reform Committee that grilled Koskinen during the impeachment attempt, is glad to see him go. David Kautter, the assistant treasury secretary for tax policy, will serve as interim commissioner.

Koskinen “was a disaster,” said Chaffetz, who is no longer in Congress. Instead of cleaning up the scandal that started before Koskinen took office, Chaffetz said Koskinen “was a total embarrassment” who misled Congress.

The Republican impeachment frenzy grew from the belief that the IRS was targeting right-leaning groups for additional scrutiny. But an agency inspector general report issued last month indicated that left-leaning groups were targeted, too.

“Commissioner Koskinen placed country first when he agreed to lend his management skills in service to the IRS, and our nation is stronger as a result of his dedication and perseverance,” said Rep. Elijah E. Cummings (Md.), the ranking Democrat on the Oversight committee. “I thank him for his willingness to work on behalf of the American people to the best of his ability, even in the face of baseless personal attacks and an extremely challenging management environment.”

Read more:

House snuffs out conservatives’ IRS impeachment push

Democrats call for largest IRS budget to improve service as Trump calls for cuts


Columnist Joe Davidson covers the federal government in the Federal Insider. It replaced the Federal Diary, which focused on federal employees. Davidson previously was an assistant city editor at The Washington Post and a Washington and foreign correspondent with The Wall Street Journal, where he covered federal agencies and political campaigns.

Post Recommends
Outbrain

You obviously love great journalism.

With special savings on our Basic Digital package, you’ll never miss a single story again.

Already a subscriber?

Secure & Encrypted