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Daily Archives: November 18th, 2021

Alexander Hendrie  6/24/2021LikeComments|4

The IRS has a history of corruption and incompetence

President Joe Biden has proposed drastically expanding the IRS.a man standing in front of a brick building© Provided by Washington Examiner

Biden’s plan calls for hiring over 87,000 agents, more than doubling the agency’s workforce. It also allocates $80 billion in new funding over the next decade, a 67% annual increase compared to 2021 funding levels. This plan will give the IRS new “specialized enforcement staff” and force banks and payment apps like Venmo to report the inflows and outflows of businesses and people.

This proposal is a terrible idea, given that the IRS has repeatedly proven that it cannot do its job.

Last week, ProPublica disclosed that it had received the tax returns of thousands of taxpayers covering 15 years, including those belonging to Warren Buffett, Jeff Bezos, Mark Zuckerberg, and Michael Bloomberg. If this information is true, it was either obtained through someone hacking the IRS database or through an IRS employee illegally disclosing the information, a felony punishable by up to five years in jail time.

While this leak is concerning, it should not be surprising. The IRS has a long history of ineptitude, incompetence, and corruption. In 1997 and 1998, congressional hearings documented numerous examples of an out-of-control IRS.

A 1998 article by the New York Times described “military style raids” by IRS agents against taxpayers who were accused of nonviolent behavior. Another 1998 article, this time from the Washington Post, noted testimony from several small-business owners across the country. They described dozens of armed IRS officials raiding their offices, seizing business documents, and harassing clients and employees. In each case, the agency found no evidence of wrongdoing.

After these revelations, important reforms were passed by Congress to protect taxpayers. However, IRS malfeasance has continued in the years since.

During the Obama administration, the IRS targeted conservative groups applying for nonprofit status ahead of the 2012 election. Under the lead of IRS Exempt Organizations Director Lois Lerner, the agency ensured just one conservative nonprofit organization received tax-exempt status over a three-year period. No IRS employee was disciplined for this scandal. The Obama Department of Justice closed its investigation with no charges, and Lerner was permitted to retire with a pension and a bonus.

Around this time, an IRS employee illegally leaked the sensitive donor information of a conservative group, the National Organization for Marriage. The IRS claimed the information was released “inadvertently” and paid a modest $50,000 settlement.

In addition to a record of targeting taxpayers, the IRS also routinely fails to perform basic tasks.

The IRS has failed to complete legally mandated annual tax complexity reports since 2002. When asked in 2015 why it wasn’t doing the report, the IRS noted that it would take two full-time employees to do so. A 2021 Treasury Inspector General for Tax Administration report found that 40% of printers in tax processing centers were not working, but the only problem with many of the printers was that no employee had replaced the ink or emptied the waste cartridge container.

A 2016 report found that the IRS failed to document the return of laptops containing sensitive taxpayer data. The report estimated that the IRS did not properly document over 1,000 computers used by contract employees. A 2017 report found that the agency rehired more than 200 employees who were previously employed by the agency but fired for previous conduct or performance issues.

The IRS failed to hire 5,000 new employees between 2017 and 2019. The agency had been allocated funding for this staff, so these hiring woes are due to bureaucratic problems, including the fact that the IRS has not updated its workforce plan in 15 years. Further, the IRS has a union contract that requires it to consider internal applicants before hiring externally, a process that TIGTA says leads to a “waste of time and resources” and often results in the agency “shuffling existing employees around.”

In 2013, IRS employees spent over 520,000 hours on union activities, costing taxpayers $23.5 million in salary and benefits.

Biden’s plan to give the IRS $80 billion is reckless at best. Even Obama-era IRS Chief John Koskinen, a longtime advocate of increasing IRS funding, believes Biden’s IRS expansion is excessive. In an interview with the New York Times, Koskinen said the IRS could not properly use the $80 billion, saying, “I’m not sure you’d be able to efficiently use that much money.”

The IRS needs reform to ensure that it properly does its job and does not unfairly target particular taxpayers. In contrast, Biden’s plan would only throw more money at a broken agency.

Alexander Hendrie is the director of tax policy at Americans for Tax Reform.

Tags: OpinionBeltway ConfidentialBlog ContributorsTax

Original Author: Alexander Hendrie

Original Location: The IRS has a history of corruption and incompetence


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