Sunday, May 26, 2013

Corruption and Careerism at the IRS






Images from theweek, unitedliberty, and tpnn

[Full disclosure:  I had a 27-1/2 year career in the Collection Division of IRS, doing and supervising enforced tax collection.  I was honored with the highest awards in both the IRS and the Treasury Department.  I had a 4-year post-career as an international consultant in the field of tax collection reform, during which I was honored with the highest civilian award in the Republic of Georgia.  I earned an MS-Tax from Golden Gate University.]

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The Internal Revenue Service (and it's predecessor, the Bureau of Internal Revenue) has a long history of corruption, mismanagement and careerism.  The IRS was established in 1953 when the BIR was found to be corrupt beyond redemption. The IRS website refers to that change merely as a replacement for "a patronage system".  That's like referring to the Titanic as "a shipping incident".  They describe it like this:

1952 - President Truman proposed his Reorganization Plan No. 1, which replaced the patronage system at the IRS with a career civil service system. It also decentralized service to taxpayers and sought to restore public confidence in the agency.  (My emphasis.)
1953 - President Eisenhower endorsed Truman's reorganization plan and changed the name of the agency from the Bureau of Internal Revenue to the Internal Revenue Service.

Corruption and failure dog the agency to this day.  Presidents used the IRS to their political advantage from the jump.  Now the IRS Commissioner has admitted corrupt interference with conservative, religious, pro-life and public education groups.  Corrupt interference.  Again.

Once there was a guy who broke that mold.  In 1997 Bill Clinton appointed Charles Rossotti as IRS commissioner.  The news was full of stories of ugly IRS Collection Division abuses.  One of CharlieR's jobs was "fix it".  Did a good job, too, eliminating collection quotas, expanding taxpayer rights and creating a culture of customer service.  (No, really.) 


Another systemic taxpayer abuse that Rossotti faced was the illegal manipulation of IRS-approved installment payment agreements.  Senior IRS collection officials hid the facts until they were threatened with Congressional testimony by employees.  They finally fessed up once IRS General Counsel was brought in.  The illegal program was terminated and more than $20Mil in illegally collected taxes was returned to taxpayers.

That's it.  Just one real reformer in all these years.  The IRS Restructuring and Reform Act of 1998 is his legacy.  Look it up.  Let me know if you can find anyone else in his league.  You won't.  Not one other stand-out reformer before or since.

NB:  I always worked in the IRS Collection Division.  My comments regard things I witnessed, not second-hand stories or tales from other sources.

Most of the employees at IRS provide internal services or are technocrats who deal with technical tax matters.  I was one of the latter.

Technocrat:  a technical expert, especially: one exercising managerial authority.  (Thank you, Merriam-Webster.) 

The public is well served by most of them.  But far too many, especially managers, are simply careerists.  They sniff the wind and go in any direction they think may further their careers.  

Careerist: a professional who is intent on furthering his or her career by any possible means and often at the expense of their own integrity.  (Thank you, The Free Dictionary.)

Careerists think in terms of gaming the system to make themselves look good.  The ethics of the game seldom matter, only the result.  That kind of thinking gave rise to things like collection quotas, seizure (of taxpayer property) goals and promotions based on dollars collected.  Get the picture?

When accused, careerists lie if lies will further their careers or obfuscate inconvenient facts.  Rossotti knew that.  One of his Day 1 acts as Commish was an email to all employees telling us that quotas would not be tolerated and that he demanded high standards.  He told all employees to contact him directly by email if they knew of the existence of quotas as a measuring tool or goal in the IRS.  As expected, the careerists said "Quotas?  We ain't got no stinkin' quotas."  

They lied.  Many were later outed and reprimanded.  Sadly, most stayed with IRS.  But quotas and dollars as management tools at IRS disappeared.  Rossotti was as good as his word.  If you told him about illegal activities he looked into it.  Really.  That sort of involvement was unheard of in the IRS.  He told us how it was going to be and he made it happen.

Today's refrain is "the IRS/government/whatever is too big to oversee."  No, it's not.  It can be done.  If Ike could run D-Day without computers, is it so impossible to imagine that someone can run the IRS with the extraordinary technology they've got?  If Rossotti could do it then, why can't someone do it now?  It does require excellent public servants working very hard in order to run it properly and make course corrections when needed.  People like that exist.


Here's my recommendation:  Mr. Prez, give Charles Rossotti a call.  Ask him to return and fix this mess.  Beg, if you have to.  Play some golf with him, have a beer summit, invite him to meet Jay-Z and Beyonce at the White House, go over to his house and have breakfast.  Do something.  When he gets things going the right way at IRS you can let him turn the reins over to someone you both trust
, but give him passes to all White House performances and State of the Union Addresses in perpetuity.  He will have earned it.  And he's a Democrat.  Take a chance.


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"From my point of view any kind of mistreatment of one taxpayer or one employee is one too many."
-- Charles Rossotti


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