We Need A Tax Professional To Run The IRS
03 October 2013
Posted by: Author: Christopher Bergin (Forbes)
Author: Christopher Bergin (Forbes)
Lois Lerner, who headed the IRS division responsible for tax-exempt organizations, and who calculatedly announced at the May ABA Tax Section meeting that the IRS had used inappropriate means to examine exemption applications of conservative groups, and who was at the center of the latest IRS scandal, resigned this week. Her bombshell announcement back in May caused the swift "resignation” of several IRS officials, but she herself refused to leave, stating that she had done nothing wrong. After months of hanging on and collecting a full government paycheck while on paid administrative leave, Lerner probably had no choice but to finally resign. As Tax Analysts reported, her resignation came soon after the IRS Internal Accountability Review Board finished its review and was about to propose that Lerner be removed from the IRS for neglect of duties.
It can’t stop there.
Because Lois Lerner is merely a symptom of an agency in serious disorder. And with the IRS about to move even more deeply into the health-care debate, it needs to be dealt with now. Because the IRS is in trouble.
There is a brain drain at the IRS. Through retirement (for various reasons), it is losing many of its "tax pros,” and they are hard to replace. There is also a resource drain, because many people think the best way to punish the IRS for its transgressions is to send it to bed without its supper (cutting its budget) on a long-term basis. The IRS culture is in bad shape. There’s an arrogance in the culture that the national taxpayer advocate has been warning us about. The tax law is not black and white. Genuine disagreements between the tax administrator and honest taxpayers should not be handled in a guilty-until-proven-innocent ecosystem.
But who is going to deal with this? Not the White House; over there, they just want IRS issues to go away. By most accounts, acting IRS Commissioner Daniel Werfel is trying his best and doing a good job. But he is "acting.” The White House recently nominated John Koskinen to become the "real” commissioner. His confirmation could be a zoo. And he is not a tax professional (more on that in a bit).
What about Congress? Well, Congress tried to fix the IRS back in the ’90s and look at the mess we have now. In the last restructuring, Congress decided the IRS should run like a business with a business executive in charge, not a tax professional. Why the two are mutually exclusive, I have no idea. But in my experience, until the Internal Revenue Service Restructuring and Reform Act of 1998, the IRS had always been run by a tax professional – men and women of high integrity. It worked pretty well, too.
Tax Analysts published an interesting article this week by Alan J. Wilensky, who served in the Treasury Department in the early ’90s and is a tax lawyer himself. He recommends creating a "blue-ribbon commission” made up of experienced tax professionals to address the problems at the IRS. I must admit, I am not a fan of blue-ribbon commissions, but maybe it’s a good idea.
Wilensky’s article is entitled, "Scandal at the IRS: Rearranging the Deck Chairs on the Titanic.” And while blue-ribbon panels scare me, I do agree with him that it might be worth a try. I also agree that IRS reforms of the late ’90s mostly did nothing more than deck-chair rearrangement. At best, those reforms have, as he says, "run their course.” And I agree with his conclusion that "the Titanic has sunk and so has morale within the IRS and Treasury.” Tax professionals are an essential part of fixing the IRS. As part of that, I believe it is important that the commissioner of the Internal Revenue Service is a tax professional, not a cop, not a Harvard Business School professor, not a chief technology officer – a tax professional.
This article first appeared on forbes.com