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IRS Issues-Cont.

In the book Team of Rivals, Doris Kearns Goodwin noted that early in Abraham Lincoln’s political career, he stated: “the fundamental test of a democracy was its capacity to elevate the condition of men, to lift artificial weights from all shoulders, to clear the paths of laudable pursuit for all.  A real democracy would be a meritocracy where those born in the lower ranks could rise as far as their natural talents and discipline might take them”.  In my opinion, this was exactly what America’s founding fathers had in mind when they wrote the Constitution, and Abraham Lincoln reiterated it more then 50 years later; however, over the 200+ years this great country has been in existence, those core beliefs have gone dramatically awry.

As I stated in my last post, I believe in the IRS; its mission to collect taxes from the populace to fund the services the country provides.  However, over the years, with all the “special interests” being served, the IRS has become an out-of-control behemoth (reference many of my last posts)!  The issues that have arisen recently concerning the IRS reveal a PERFECT time to revise the tax code; however, what we will probably get is a tweak here and a tweak there, simply because all of the “special interests” mentioned above will be raising bloody hell through their lobbyists to get their interests served!  Get rid of the lobbyists, make lobbying illegal and our representatives in Washington might actually be able to get something accomplished.

I don’t have any idea where this IRS “extra scrutiny” issue will end up.  Based on many news reports, such as a 06/05/2013 article from McClatchy.com, it appears there might be some issues to research.  For example, according to Mark Sullivan, Chief Economist at Tax Analysts, a group of specialty publications, of “176 cases chosen for extra scrutiny before they were approved, 46 had “tea party”, “patriot” or “912” in their names, 76 others were conservative, 48 were non-conservative and the political leanings of six couldn’t be determined”.  The dates from which the applications were reviewed were not given; however, with 69.3% of those reviewed receiving extra scrutiny being “conservative leaning”, it would appear there might be some bias involved.  I must say, reading the full article in McClatchy.com might lead the reader to feel there was “extra scrutiny” on both sides.  (Read more:  http://www.mcclatchydc.com/2013/06/05/193100/liberal-groups-say-they-dont-see.html#storylink=cpy

The IRS must feel it’s in for some turbulent weather ahead, seeing that on Monday, 06/03/2013, Acting Commissioner Danny Werfl announced the selection of several senior leaders to assist him in his work to conduct a comprehensive review of IRS operations and make improvements to the nations tax agancy.  The three are:

Heather Maloy, who will handle the responsibilities of Deputy Commissioner for Services and Enforcement, after more than three years as Commissioner of the IRS Large Business and Interantional (LB&I) Division;

W. Todd Grams, who will be Chief of Staff, moving from his current position as Executive-In-Charge of the Office of Management, “Performance Improvement Officer” (quotations are mine) and Chief Financial Officer for the Department of Veterans Affairs, which currently has close to 1 million outstanding claims for veterans’ disability pending (883,949 to be exact); and

David Fisher, who will serve as Senior Advisor to the Acting Commissioner and Chief Risk Officer.  His former position was serving as Chief Administrative Officer/Chief Financial Officer for the Government Accountability Office (GAO), where he was responsible for a full range of functions – including budget, financial management, information technology, security, facilities and human capital.  It should be noted that Fisher also was the Co-Performance Improvement Officer at the GAO, responsible for starting up a new Continuous Process Improvement Office and overseeing numerous projects that yielded both short-and-long-term efficiency gains for the organization.

Along with the three “experts” named above, Werfel also announced that Washington attorney Jennifer O’Conner will join the Chief Counsel’s Office, serving as a counselor to both Werfel and IRS Chief Counsel William Wilkins.  O’Conner most recently was a partner with Washington’s Wilmer Hale law firm, where she has been since 2002, and where her duties included managing complex investigations and litigation and providing public policy and strategic advice to a broad range of clients.  At the IRS, her work will include assisting Werfel and Wilkins with the current IRS review effort.

It appears the new acting commissioner is trying to get in front of the issues at hand, and at least two of the three newbees would be detail oriented numbers people, but did anyone notice that all three “experts” come from other government positions, one of which had a 179% increase in backlogged benefit claims over the past four years (380,000 to 884,000), and that Warfel went out and hired a “big-gun” Washington attorney to “assist” in the effort?  Does anyone in the government ever think about going out and getting someone from industry to clean up a mess, someone that has had to generate a profit or meet a budget?

Where this whole thing will end up is anyone’s guess, but as I stated in my post IRS Scandal: “In my opinion, there isn’t any need whatsoever for groups of this nature to have immunity from paying taxes”; whether they be conservative, liberal or whatever, because, “regardless of what these “public initiative” groups say, they are in place to promote their agenda”.  Tax-exempt status, in my opinion, should only be awarded to entities that support the less fortunate in our society, such as United Way, Red Cross, Salvation Army, etc.

As I said in my post The Flat Tax, I am in favor of a tax where everyone is taxed at the same rate from the first dollar to whatever dollar they earn.  I must say here, the Flat Tax still leaves a part of society out of having to pay taxes: the “cash market” or anything where cash changes hands with no way to track it.  There is another taxing method to be sure even the cash marketers are paying taxes: the Fair Tax, or a National Sales Tax.  With the Fair Tax, EVERYONE that purchases goods will end up being taxed; however, there is a downside to this tax method as well.  A “Fair” or National Sales tax is a very “regressive” tax, meaning it takes a larger percent of disposable income from the lower income populace than it does from higher income individuals.  Frankly, if there were a way to make the Fair Tax more equitable to ALL taxpayers, it could be an appropriae solution, but as I said above, all we probably will get after all this is said and done is a tweak here and a tweak there in the tax code simply because our representatives in Washington have so many special interests to accomadate.