IRS problems extend far beyond its commissioner

Frustrations with the IRS have reached a boiling point, with a group of House Republicans now calling for the impeachment of IRS Commissioner John Koskinen. His ouster is probably well-deserved — there is evidence to suggest that he misled Congress while under oath and may have broken other laws along the way.  While firing him might be prudent, the real problems with the IRS can’t be fixed by changing personnel. Congress can oust as many commissioners as it wants, but until the fundamental flaws at the increasingly roguish agency are fixed, individuals, families, businesses and non-profit groups will continue to be mistreated.

Consider for instance, the political targeting of groups categorized as non-profits under the Internal Revenue Code. It’s now clear that the IRS selectively harassed organizations for their ideological orientations, which were overwhelmingly conservative. This inconvenient fact effectively (and rightly) forced out Lois Lerner, the IRS honcho who presided over the mess. Lerner is gone, but has anything fundamentally changed at the agency that would prevent such actions in the future?

{mosads}Sadly, no. After Lerner refused to testify before Congress on the matter, the Department of Justice opted to not pursue any charges against her. Now, it’s time for Congress to step in on behalf of all taxpayers – and there are plenty of things it can do.

One relatively low-hanging piece of legislative fruit would be passing H.R. 1104 — a bill that would prevent the IRS from imposing gift taxes on contributions made to nonprofit groups. This has been a “sword of Damocles” that the IRS has been swinging over certain groups for years. Were the sword to fall, affected charitable groups would in essence be shuttered as few donors would be willing to pay taxes on contributions. Though much attention has been paid to the treatment of conservative groups under the current Obama administration, this threat imperils groups of all ideological viewpoints, which is why the bill easily passed the House with bipartisan support earlier this year. The Senate should act on it immediately.

Other House-passed no-brainer bills include H.R. 1152, which would prohibit IRS employees from using personal email accounts to conduct official business and H.R. 709, which would provide a clear process for firing IRS employees who engage in inappropriate political targeting. These are just a few of the important bills Congress should pass immediately to rein in overzealous IRS staff.

But it shouldn’t stop there. Congress should pass legislation that would codify a “Taxpayer Bill of Rights” to protect citizens from being overcharged on their tax bill and give them more avenues for dispute resolution. Senate legislation sponsored by Sens. Chuck Grassley (R-Iowa) and John Thune (R-S.D.) known as the Taxpayer Bill of Rights Enhancement Act (S. 1578) would address additional, longstanding issues to give Americans more safeguards against tax agency abuse.

Congress should also pass legislation (such as H.R. 3167) banning the IRS from hiring outside law firms to conduct sensitive investigations, a practice that opens the door to the harassment of taxpayers and the exposure of private information. This is particularly necessary due to recent – and highly questionable – actions by the IRS to unilaterally skirt a prohibition on this practice while simultaneously lifting a rule that prohibits non-government employees from questioning witnesses under oath. It is now pursuing a temporary rule that would further enable the hiring of private law firms. This has already cost taxpayers over $2.5 million due to contracts the IRS has signed to help with an extraordinarily protracted audit of Microsoft that has now dragged on for more than 10 years. Taxpayers shouldn’t continue to be forced to pay for these types of open-ended investigations.

All of this is not to say Congress shouldn’t necessarily impeach IRS Commissioner Koskinen. If he, in fact, broke the law he should be held accountable before the law. But the primary focus ought to be on fixing the numerous underlying problems at the IRS. The recent scandals present an opportunity to address some of these in a bipartisan fashion. It would be a shame if Congress was so distracted by Koskinen that it failed to do so.

Arnold is executive vice president at the National Taxpayers Union.