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April 21 2016

Congress Targets the IRS for Reform

Patrice J. Lee

Just days after the tax filing season wrapped up, the IRS will face a slew of laws aimed at bringing reform to the powerful federal agency.

The bills, which originated in the House of Representatives, span a variety of issues. So far two non-controversial bills have passed, but several other more contentious bills are on the docket.

One bill bans the IRS from using funds to target citizens for exercising their First Amendment Rights - in direct response to the IRS scandal where agents discriminated against conservative groups which sought nonprofit tax exemption with intensive scrutiny. This is the first real attempt to ensure that this wouldn’t happen again.

The other bill that passed regards making printed copies of a  tax-filing instructions book available to tax payers for free. While the IRS has increasingly been driving as many of its operations online as possible, the bill’s sponsor argues that this  adversely affects people such as older Americans who may not be comfortable using computers.

The more controversial bills aim to target the agency’s problems with personnel by dealing with misconduct and poor performance among IRS employees. The White House has already come out in opposition. Here are the bills:

·         One bill takes a common sense approach to ensuring that misbehaving workers don’t get back into the federal agency. It prohibits the rehiring of any former employees who were removed for misconduct or poor performance. It’s in direct response to the 323 former IRS staffers that were rehired from 2010 to 2013, according to a watchdog report.

·         Another bill bars the IRS from hiring new employees until the agency can prove that none of its workers owe back taxes or have incurred a lien unless they have made payment arrangements.  To which the White House responded with a strong “no”:

White House said that bill would be a “drastic and counterproductive step that would compromise tax administration and taxpayer services. . . . This legislation is unnecessary, as strong laws and procedures already exist to ensure that IRS employees comply with their tax obligations. Publicly-available data show that IRS employees are among the most tax compliant groups in the Nation with a delinquency rate of less than 1 percent.”

·         The third bill would hold the agency accountable for better customer service by prohibiting performance awards at the IRS until they get their act together. We’ve been reporting on the woeful customer service levels at the IRS and this bill would be the stick to get the IRS to perform better. Not surprisingly, the White House opposes this bill blaming underfunding as the reason the IRS poor performance.

·         Finally, the White House threatened to veto the fourth bill which would require the IRS to deposit fees for specific services into the general fund. The Treasury could only spend it with congressional approval.

And generally, the complex and antiquated tax code will be a target for House Speaker Paul Ryan who says the IRS cannot be trusted to police itself and wants to push for tax reform:

"Right now, we have a tax code that no one can understand being enforced by an agency no one trusts. We need the IRS and a tax code that works for the taxpayer. We don't have one now and that is one of the causes that this majority is dedicated to," Ryan said.

After nvestigations, reports, and countless hearings that dragged IRS leadership to Capitol Hill to explain the failings or transgressions of the agency, nothing of substance has been done. Therefore, this Congress is stepping in to hold the agency accountable. These efforts may be futile though because a White House veto will present a nearly unconquerable hurdle.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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