Koskinen replaced Danny Werfel, the former acting IRS commissioner whom President Obama appointed to lead the agency as it was digging out of a scandal that involved inappropriate actions toward advocacy groups — mostly conservative organizations — during the 2010 and 2012 election cycles.
The IRS targeted some organizations for extra scrutiny based on their political ideology, according to an inspector general’s report last year. Agency officials apologized for the actions in May.
During the meeting, Koskinen suggested that the IRS’s problematic behavior toward advocacy groups was partly due to confusion about the existing tax-exemption rules and how to apply them. He discussed new guidelines the Treasury Department proposed in November to help the IRS determine which type of activities will disqualify groups from tax-exempt 501 (c) status.
Critics of the IRS, including many GOP lawmakers, have suggested that the agency’s actions were politically motivated. Koskinen said clearer rules about allowable activities for tax-exempt groups, as well as how much those activities are allowed, will help the agency dispel such notions.
“We need as much clarity as possible,” Koskinen said. “If we can get clarity, that’s the way we’ll get the IRS out of this as much as possible.”
Although the IRS is still recovering from its targeting controversy, the agency is dealing with other issues, including a shrinking budget, increasingly sophisticated tax-fraud schemes and concerns about meeting its obligations under the Affordable Care Act — namely enforcing the individual mandate and providing tax credits to individuals who cannot afford health coverage.
Koskinen acknowledged that Congress has shown almost no willingness to increase agency budgets, but he insisted that investing in IRS resources is a smart move for the government.
“The IRS is a unique agency in that the more resources it can deploy, the more revenue it can generate,” he said. “For a relatively modest amount of investment, you can have a big swing in revenue for the government.”
In terms of the Affordable Care Act, the new commissioner said his agency should have no problem meeting its statutory requirements under the health law known as Obamacare. He said he has already met with some senators to discuss their concerns and that he is setting up meetings with House members in coming weeks.
“We have a lot of work to do in the next few months, but all the executives and the employees I’ve talked to are confident we’ll get the work done,” Koskinen said. He added that the agency will need adequate funding to meet its new obligations.
As for tax fraud, Koskinen said the agency has added more filters to detect scams and that it is continuously developing new safeguards. “It’s an area that has everyone’s attention,” he said.
Koskinen said he has begun visiting IRS offices and plans to see at least 25 as part of his introductory tours.
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