More trouble ahead for the IRS

The IRS hoped to have turned the corner on its Tea Party controversy by now.

Not by a long shot.

In fact, the agency will face no shortage of severe challenges over the next six months, as it stares down another potential budget cut and serves as a punching bag for GOP presidential candidates.

And that’s not even getting in to the House Republicans now pushing to remove the agency’s commissioner from office, insisting that John Koskinen didn’t give them the truth about Lois Lerner’s missing emails.

“John Koskinen needs to go. Plain and simple,” Rep. Jim Jordan (R-Ohio), one of the IRS’s most strident critics, said Friday.

The difficult autumn that looms for the IRS comes after the agency’s brass had hoped that a Senate Finance Committee report, released early this month, would have eased some of the pressure after 27 months of congressional investigations.

But the Finance Committee — long viewed as the best chance for a true bipartisan conclusion — deadlocked on the questions at the center of the IRS’s singling out of Tea Party groups seeking tax-exempt status: Was there intentional targeting of conservative organizations because of their political beliefs? And did the White House have any influence over the IRS’s actions?

That stalemate means that the partisan views over the IRS’s treatment of Tea Party groups are basically fixed in place, making it more difficult for Koskinen to make progress on two of his stated goals — reversing the agency’s budget slide and helping put the Tea Party matter to bed.

In the weeks leading up to the Finance Committee’s report, Koskinen brushed aside Republican requests to admit that the IRS had targeted Tea Party groups.

Instead, Koskinen made it clear that call was for Senate tax writers. “It’s not my role to make their judgment for them,” Koskinen said in July. “They’ll tell us what they think.”

But he also suggested that House Republicans, after floating the idea of impeaching him, were simply upset that they hadn’t proved their case. “We’ve provided them a phenomenal amount of information,” he said. “And if it hasn’t met all their expectations about the substance of it, that’s not our fault.”

Either way, the bad blood between the IRS and congressional Republicans puts the agency in jeopardy of facing further budget cuts.

The agency, which saw its bottom line hit a high of $12.1 billion in 2010, is getting $10.9 billion this year. Koskinen and other top IRS officials have blamed the cuts on a dramatic drop in customer service at the agency, which answered just two out of every five phone calls this last filing season.

Republican aides said that they’re sure to seek further reductions in the budget negotiations expected before the end of the year, given that they now control both sides of the Capitol and that IRS cuts were among the GOP’s favorite part of the 2014 spending deal.

The House Appropriations Committee has already passed a measure seeking a further $838 million cut in IRS spending, while their Senate counterparts reduced the agency’s budget by $470 million.

But Jordan said that House conservatives would put more of their efforts into seeking to remove Koskinen from office this fall, in part because Planned Parenthood would be at the center of funding battles following the recent release of secretly recorded videos in which Planned Parenthood officials discuss the group’s fetal tissue program.

The White House has shown no interest in removing Koskinen, and Jordan said House Republicans were already trying to figure out how to coordinate impeachment proceedings between the Oversight and Judiciary panels.

“We’re at the early stages, so I can’t give you a timeline. But I can tell you that we are actively looking at how to do this,” Jordan said. “The fact that we are looking at it says a lot — this hasn’t been done in a long, long time.”

It is true that the IRS’s Tea Party controversy has faded somewhat from the mainstream view and that Republicans remain more focused on Benghazi — in part because of its obvious Hillary Clinton connections.

But one group that still takes the Tea Party issue very seriously is the conservative base that 17 GOP presidential candidates are currently trying to court in Iowa, New Hampshire and across the country.

Louisiana Gov. Bobby Jindal has already said he wants to sic the IRS on Planned Parenthood, with more than five months until Iowa voters head to their caucuses. Sen. Ted Cruz (Texas) has been saying for months that he wants to get rid of the tax agency entirely.

Those responses show that the GOP, which has fractured on a variety of issues in recent years, remains united in their anger at the IRS. House Oversight Chairman Jason Chaffetz (R-Utah), for instance, recently tried to strip Rep. Mark Meadows (R-N.C.) of his subcommittee gavel. But the two lawmakers stood side-by-side when Oversight Republicans threatened Koskinen’s job.

Republicans have only gotten more angry because of what they see as a lack of contrition from Lerner, the central figure in the controversy, and other IRS officials, as well as an ever-shifting story on how thousands of Lerner’s emails were lost for good.

“The IRS would have been much better served by taking responsibility, firing some people and making internal reforms,” said Sage Eastman, who was a top aide to former House Ways and Means Chairman Dave Camp (R-Mich.), adding that the agency instead “dragged their feet” and “never admitted to anything.”

Floyd Williams, a former senior IRS official, said it all meant there was no telling when the IRS would be able to reverse its funding cuts and improve its relationship with Republicans.

But Williams said he thought the change would come after the IRS’s service to taxpayers dipped even further.

“You get to a tipping point, and members of Congress get tired of getting letters,” said Williams, now senior tax counsel at Public Strategies Washington. “Eventually, you’ll see a little bit of shift. We’re just not there yet.”