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January 28, 2023

Maybe We Should Wait to Throw More Money at the IRS’s Problems

Wouldn’t life be sweet if our bosses gave us more money when we failed?  Gee, I wouldn’t have hit on the client’s daughter at that bar if only you paid me better…

Yet that’s just what we’re supposed to do with the IRS.  Caleb notes that the Taxpayer Advocate pointed out all sorts of ways the IRS is falling down on the job, from depriving audited taxpayers of their rights to abusive behavior in its horrendously-botched offshore compliance initiative.  And therefore we should… increase their budget!
As a matter of arithmetic, it would seem the IRS would need more resources.  The tax law has become the Swiss Army Knife of public policy.  As Congress dumps chores ranging from preserving historic buildings to energy independence to running the nation’s health care system on it, the IRS is struggling to grow from a sleepy revenue collection branch to a sprawling multi-portfolio superagency.  
Before we just give Doug Shulman more money, though, a little accountability is in order.  While we can’t just fire the IRS for its failures — not even Mitt Romney can do that — we can at least hesitate a bit before rewarding failure.  
The biggest initiatives of the Shulman era have been the offshore compliance initiatives and preparer regulation.  The offshore compliance program has terrorized peaceful law-abiding Americans abroad while provoking militant reactions from our formerly peaceful neighbors in Canada.  While preparer regulation has been wonderful for Accenture, it’s unlikely that the taxpayer public will ever see a payoff from forcing preparers to take an open-book “competency” examination.
Yeah, maybe the IRS ultimately needs more money.  Maybe giving it more money will make it less incompetent.  But if I were trying to talk the boss into a raise, I’d sure want a better argument than that.

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