There have been a slate of stories highlighting the IRS’s recent struggles with reductions to their budget. It seems like every day Commissioner Koskinen is in a hearing blaming the agency’s terrible taxpayer service performance on those cuts.
Here at NTU, we have received many an inquiry about the rift between the House and the IRS on this issue. We’ve pointed out that the IRS has way too much to do, and that a reduction in their responsibilities is a more prudent path than more spending.
Now, the House Ways and Means Committee has released a report that should turn this ongoing discussion upside down. The analysis estimates that the IRS could have covered about 26 million taxpayer assistance calls had it better managed its expenses.
Perhaps more significantly, the report states that the IRS was avoiding spending resources on taxpayer services – and we can extrapolate that PERHAPS (just maybe), the IRS did so to hold taxpayers in need of assistance as a hostage in budget negotiations.
The entire document is worth reading, but here are three startling findings that will have taxpayers steaming…
First, as part of the spending reductions in the Budget Control Act, the Office of Management and Budget (OMB) issued guidelines that bonuses should not be paid out to federal employees. Indeed, the IRS was set to avoid paying out bonuses and save $70 million in 2013.
Yet, a newly appointed Commissioner John Koskinen reinstated bonuses, and then continued them despite the budget cuts instituted in 2014. Oh yes, and the employees receiving those bonuses spent 492,000 hours on union activities!
Second, the IRS put Obamacare implementation before its core duties, including taxpayer service.
The agency has spent $1.2 billion, BILLION, implementing the Affordable Care Act (living up to its moniker!).
This includes $12 million siphoned from taxpayer services and $185.7 million from the user fee account. The IRS also added over 1,000 new employees to deal with Obamacare.
All good indications that they have too much to do!
Third, the IRS’s continues wasteful spending trend. While begging for more taxpayer cash, the agency has failed to properly steward our money in a number of instances.
There were $17.7 billion in erroneous Earned Income Tax Credit payments in 2014, second in the entire federal government.
They also spent $2 million hiring outside lawyers, even though they have an entire staff of lawyers in the agency. The Ways and Means Committee report further highlights taxpayer protections may have been circumvented by hiring an outside firm to go after Microsoft:
“…Hiring Quinn Emanuel may violate Section 6103 of the Internal Revenue Code, which prohibits the sharing of confidential taxpayer return information. When the IRS hired Quinn Emanuel, it issued a temporary regulation to allow the law firm to see taxpayer return information and to take compelled testimony – in other words, interrogate Microsoft employees.”
The IRS also spent $2.4 billion (21% of its budget) on IT services! Yet, somehow they still couldn’t hold on to Lois Lerner’s emails…
The next time you hear a call for more IRS funding, keep these facts in mind.