It is interesting that recent decisions by the IRS are self serving and do not help the American public The last strategic paper drafted by the IRS outlined 3 areas to target increase revenues for the US by about $300 billion per year: 1) $100 billion from large corporations, 2) $100 billion from small businesses and 3) $100 billion from individuals. Since that initiative, the IRS has been found to have abused its powers to grant nonprofits exempt status in violation of its own rules, agents reviewed celebrities tax returns in violation of IRS regulations and collections have not grown as fast as the economy.
In the Boston Globe’s February 17th, 2014 article “IRS: America’s Feared and Failing Agency” by Michael Kranish, the IRS is portrayed as a failure – the country (namely Congress) has failed. The belief held by the agency and the reporter is – better regulation of tax preparers is the answer. The article states that budget cuts of a $1 billion resulted in the loss of $8 billion in revenue, laying the loss of revenue to the Congress and not the agency.
Let’s be clear. The Agency chose to cut front line agents who deal with the public and collection because this move enabled the agency to get more money from Congress! The truth is, the managers could have cut elsewhere and kept the auditors and people assisting the public; but if they did that Congress would not have to restore the cuts. I have dealt with public agency finances and have noted that the best way to restore cuts is to only cut where it hurts the people being served. So, if you are a school, you cut teachers and Kindergarten rather than custodians and administrators. If you are the IRS you cut collection and service people.
The agency purposefully cut where it hurt the country (the people) most. We should not reward the agency by increasing its budget or following its proposal that more preparers should be regulated tighter. Tighter regulation of preparers would not address the IRS sending out refunds to millions of fraudulent returns. Tighter regulations of preparers would not assist the IRS in collecting more delinquent funds owed. Tighter regulations of preparers would not increase the number of taxpayers audited.
The result is an insular agency trying to make its life easier at the expense of the taxpayer. The proposals would not bring in more revenues, which is the main goal of the agency. Collection of taxes would create another bureaucracy; where is the sense to that? We have created an agency that cares more about its budget than its mandate to serve the country. It desires to increase the taxpayer burden by increasing regulation of preparers as if that would somehow solve all of the agency’s problems.
