IRS chief set to redraft proposed rule for tax-exempt groups after backlash

posted at 10:01 pm on April 14, 2014 by Mary Katharine Ham

First, an entirely and uncharacteristically reasonable reaction from the IRS on its proposed new rules governing 501(c)s, a classification of tax exempt groups that was the area of improper targeting of Tea Party activists. When Democrats realized the best way to deal with personnel abusing tax law was to create more tax law for them to abuse, the IRS went to work on more specific ways to crack down on social welfare groups. Their proposed rule caused backlash from both conservatives and liberal activists:

The Internal Revenue Service is prepared to rewrite a proposed rule regulating the political activities of non-profit groups to address complaints from the right and left that it goes too far, IRS Commissioner John Koskinen said Monday.

“In all likelihood we will re-propose a redefined rule and ask for more public comment,” Koskinen told USA TODAY’s Capital Download. It’s a process he predicts will take “until the end of the year and beyond” to complete. The proposed regulation of groups known as 501(c)(4)s drew a record 150,000 comments before the deadline in late February.

He said the new rule would take into account backlash from conservative Tea Party groups as well as some liberal advocacy organizations that the agency’s proposal – intended to address concerns that the tax-exempt groups were engaged in partisan warfare – would bar, even voter education and registration programs.

Indeed, Brit. Lest we speak too soon, however, let’s read the rest of this interview, in which Koskinen whines about funding of the IRS. Really:

He says his current job is more difficult because the IRS has been unable to get adequate funding, even though money spent on enforcement generates revenue.

“If you gave us the $500 million of our sequester funds (slashed under automatic spending cuts) we would have given you back $2 to $3 billion more, and people shrug and move on,” he said. The agency now employs 10,000 fewer people and receives $900 million less in federal funds than it did four years ago…

“We’re sort of in the middle a political bulls-eye,” he said. “Together with the Affordable Care Act, the issues surrounding the qualifications of 501(c)(4) social-welfare organizations has been a battle in public media for the past year. The combination of the two has made getting more funding difficult.”

As it should since there’s plenty of evidence one of the government’s most powerful agencies abused its power to curtail the political speech of one side. Yes, perhaps the abused taxpayer should be a little wary about giving you more money with which to abuse him:

He warns the IRS could be headed toward disaster when new responsibilities, including the Obamacare mandates, kick in a year from now. “If we keep going at this level, with the increased responsibilities, at some point we risk crippling the agency,” he cautioned, “and that won’t be good for the government and it won’t be good for taxpayers.”

Get ready to weep:

One consequence already is a reduced chance of being audited. “They’re lower than they have been,” he said, then added: “I wouldn’t encourage anybody to depend upon us not auditing them. As I’ve told people, the roulette wheel is spinning.”

At least there’s something to be thankful for this April 15th.


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Investigate the unions for political speech. as well.

FlaMurph on April 14, 2014 at 10:06 PM

NPR dutifully trotted out the bureaucrat tool for a happy-talk interview. Propaganda arm of the White House. No more, no less.

Jaibones on April 14, 2014 at 10:07 PM

Toss Elijah Cummings in jail.

John the Libertarian on April 14, 2014 at 10:08 PM

IRS chief: New rule on the way for tax-exempt groups

If you are a flucking Obama lib…..
30 minute for approval.

If you love your country…
Take it to the courts….

Electrongod on April 14, 2014 at 10:10 PM

“If you gave us the $500 million of our sequester funds (slashed under automatic spending cuts) we would have given you back $2 to $3 billion more, and people shrug and move on,” he said. The agency now employs 10,000 fewer people and receives $900 million less in federal funds than it did four years ago…

Um…what about the 16K MORE IRS workers that were supposed to be hired to ensure compliance with 404care?

Oh, right…chopped liver…nevermind…

Newtie and the Beauty on April 14, 2014 at 10:12 PM

It’s been over 5 years. This is a good thing?

faraway on April 14, 2014 at 10:12 PM

It can’t be too bad there, financially. Everyone there is due a bonus “to help morale”.

From an article at Townhall.com:

Citing the need to boost employee morale, the Internal Revenue Service’s new commissioner said Monday that he will pay out millions of dollars in bonuses to agency employees, reversing a decision his predecessor made to save money amid the sequester budget cuts and other belt-tightening last year.

The agency remains under fire for targeting tea party groups, but Commissioner John Koskinen said the bonuses are needed to retain and attract good employees in a time of cutbacks.

majorzot on April 14, 2014 at 10:13 PM

They are trying to tamper down the brouhaha by making the rule only debt owed in the past 10 years will be pursued. Ah, it should be zilch collected unless the relative signed onto the debt.
This all goes back to no one speaking up when this admin started going around congress and congress didn’t do anything about it. That gave this admin the green light to let every agency to do as it pleases.

31giddyup on April 14, 2014 at 10:13 PM

Congress needs to pass a bill standardizing how Federal Govt statistics are gathered and published. The crap coming from this Administration is absolute BS; there needs to be standards which data is gathered and released of which the public can have a “smidgeon” of trust.
If not passed soon, there will be so much junk data spewing out of the mouths of the Obama people, it is going to make them look like the most successful Presidential Administration ever, instead of the 43rd best as they stand now.
Nothing but crap data being released……Standardize

Privatize It on April 14, 2014 at 10:15 PM

OPPS!
31giddyup on April 14, 2014 at 10:13 pm miss directed

31giddyup on April 14, 2014 at 10:17 PM

We need a tax system that is much simpler and takes the law making out of the hands of the IRS…

d1carter on April 14, 2014 at 10:18 PM

OPPS, BELOW WAS MISDIRECTED

They are trying to tamper down the brouhaha by making the rule only debt owed in the past 10 years will be pursued. Ah, it should be zilch collected unless the relative signed onto the debt.
This all goes back to no one speaking up when this admin started going around congress and congress didn’t do anything about it. That gave this admin the green light to let every agency to do as it pleases.

31giddyup on April 14, 2014 at 10:13 PM

31giddyup on April 14, 2014 at 10:19 PM

So they’ll change the laws so that criminals leading and working in their own department can go scot free?

burrata on April 14, 2014 at 10:21 PM

I wouldn’t trust anything this flack has to say. Among other things, he was a head honcho at Fannie Mae. He sure showed how to run a clean operation while he was there.

Yeah, right. [spits]

platypus on April 14, 2014 at 10:25 PM

Retweeted by Michelle Malkin
Ben Swann ‏@BenSwann_ 5h

@michellemalkin Sources inside BLM and Las Vegas Metro say “no question” Feds are planning raid of Bundy Home http://benswann.com/exclusive-sources-inside-the-blm-and-las-vegas-metro-say-feds-are-planning-a-raid-on-bundy-home/

davidk on April 14, 2014 at 10:28 PM

I think there are 2 things that need to be done to straighten out the Federal Bureaucracy, outlaw all government unions, and clean house at the IRS. It’s time to completely revamp the civil service system and make it much more difficult to politicize government agencies.

The Democrats need to pay a price for what they’ve done to our government and I don’t see the Republicans fighting for us here. Perhaps they’re thinking they can do the same thing. I’ve got news for them, union thugs populate these agencies and they aren’t likely to do the same thing for Republicans that they do for Democrats.

bflat879 on April 14, 2014 at 10:32 PM

Government Agencies Under Obama
All Being Politicized And Weaponized

VorDaj on April 14, 2014 at 10:35 PM

One consequence already is a reduced chance of being audited.

Heh. We claimed an adoption tax credit for last year. That, combined with our donations to and volunteering for a few select organizations the IRS has painted bulls-eyes on, should guarantee us an audit this year.

CJ on April 14, 2014 at 10:36 PM

OT/Don’t miss this in headlines: Beware of cupcake fascism

Axe on April 14, 2014 at 10:41 PM

Get ready to weep:

One consequence already is a reduced chance of being audited. “They’re lower than they have been,” he said, then added: “I wouldn’t encourage anybody to depend upon us not auditing them. As I’ve told people, the roulette wheel is spinning.”
============================

Change and Hope!!

canopfor on April 14, 2014 at 10:42 PM

I wouldn’t encourage anybody to depend upon us not auditing them. As I’ve told people, the roulette wheel is spinning.

Hatred justified.

Axe on April 14, 2014 at 10:47 PM

What could go wrong right?

Good Lt on April 14, 2014 at 10:52 PM

Mary Katharine Ham

…saw MKH on BOR…she got a haircut!…looks good!

KOOLAID2 on April 14, 2014 at 11:09 PM

Why do Republicans always fall for this stuff?

No Chop Charlie on April 14, 2014 at 11:12 PM

You can’t repeat this often enough:

Only a fool trusts the government.

earlgrey on April 14, 2014 at 11:19 PM

The Feds should withhold 10% of every transaction, including payroll, home and car sales (not food, clothing, medical, or insurance, or social security), and by law have to stop collecting when tey hit 95% of the previous years take. Bye by IRS and speech police.

HICON on April 14, 2014 at 11:24 PM

Government Agencies Under Obama
All Being Politicized And Weaponized
VorDaj on April 14, 2014 at 10:35 PM

Well said

karenhasfreedom on April 14, 2014 at 11:39 PM

Yes we just need more laws and that will fix the problem and maybe throw some more money at the problem as well then everything will be hunky dory

jaywemm on April 14, 2014 at 11:54 PM

He says his current job is more difficult because the IRS has been unable to get adequate funding, even though money spent on enforcement generates revenue.

You mock it, but this is true. There are no “40k new agents”, “16k new agents”, or whatever number is imagined. A submission processing rep is cheap, costing about $20k in training and about $25k/year. A tax examiner (auditor) costs about $40k to train and about $36k-$44k/year. A CSR costs about $100k to train and averages around $60k/year, with continuing education costs (which are fairly minimal for other roles) around $20k/year.

Our biggest issues in enforcement are not the minor crap audits usually cover. They’re fraud. I talked about it in detail in the thread on the “Shakedown” article.

To train a rep in fraud prevention, you need to start with a CSR and spend another $10k/year on training, and that’s with our current up-training format, which is horrible. My role is in ID Theft, as one of 7 instructors for the front-line program. I had 4 hours to bring roughly 100 CSR’s in on the program, and really needed about 24 hours to do the job right due to several new tools, abilities, and procedures… Two of which weren’t even available for weeks to months after I had to teach them (which meant the information I taught was only vaguely applicable). Last year, we stopped $5 billion in confirmed fraud and $3.5 billion in suspected fraud that hasn’t been reviewed yet, at a cost of around $300 million to the taxpayer. Despite our issues, we’re on track to exceed those numbers this year.

ACA, due to the absurd nature of the program, would cost us more to enforce than we’d bring in, and would require us to cut programs that actually stop tax fraud and protect taxpayers.

That last line isn’t a selling pitch. Every day, I have to tell people that they’ve been a victim of one of the most financially destructive crimes that can be committed against them. Anger, fear, rage, tears, whatever their response, I have to calm them down, get them focused on working the problem. I can fix their tax accounts myself, so we don’t try to pursue or bill them for the bad return, but I can’t fix their personal finances. What I can do, and actually do, is walk them through all the steps of protecting themselves, provide official documentation of the tax-related event, and get them focused on the fact that there is a path through it all. That’s perhaps the most important… When you get someone who responds with despair, it’s very, very hard.

So that’s why we’re understaffed and underfunded. We’re stopping $10,000 fraudulent refunds instead of trying to chase down $500 penalties, and we’re suffering high turnover and expensive training. Not only can we stop more losses by chasing down fraud instead of trying to audit for relatively small penalties (economic decision), we can help reduce the amount of fraud occurring in the private sector as well (also economic). And then there’s the PR aspect, where we’re not trying to chase you down and fleece you… We’re protecting you from a criminal, and we’re very often the first warning the victim gets that they have identity theft. That’s the reasoning, and that’s the “why”.

Asurea on April 15, 2014 at 12:55 AM

the ongoing issue is a break down in due process.

None of this is subject to court challenge or oversight which is a violation of the constitution.

All of these departments and bureaus need to be transparent to the judicial branch. Every action needs to be able to be challenged in court.

Karmashock on April 15, 2014 at 4:00 AM

As I’ve told people, the roulette wheel is spinning.”

Well there’s a good way to run an organization.

ButterflyDragon on April 15, 2014 at 7:05 AM

The IRS is corrupt.

Get out the vote efforts should also be stopped as they are obviously corrupt as detailed by real citizens.

Our congress has let us down by creating this smoldering pile of poop.

Flat tax, and term limits until we can get colleges to actually train people in civics.

Lonetown on April 15, 2014 at 7:15 AM

One consequence already is a reduced chance of being audited.

Well, sure, unless you’re Ben Carson or a tea party patriot or somebody else the administration doesn’t like – then your chance of an audit goes up 1000%.

lymond on April 15, 2014 at 7:24 AM

Asurea on April 15, 2014 at 12:55 AM

 
Not that I have any desire to see you unemployed, but it’s possible that you just made the best case for a flat tax that I’ve ever seen.
 
(And that’s not sarcastic in the least.)

rogerb on April 15, 2014 at 8:05 AM

Why are the writing any rules? What are they doing in the speech business at all?

Cashier the IRS.

rrpjr on April 15, 2014 at 9:47 AM

How about the IRS go after the ones in their ranks that owe back taxes? Last I heard that was in the millions if not billions. Seems like they would get more than enough funding then. But then asking the IRS to go after their own is like asking Holder not to be a racist, it just won’t happen.

bbinfl on April 15, 2014 at 9:50 AM

GET RID OF THE IRS, ELIMINATE THE ‘TOOL’ WITH WHICH THE FEDERAL GOVERNMENT CAN TARGET AND PUNISH THE AMERICAN PEOPLE — ADOPT / PASS THE ‘FAIR TAX’ PLAN!

There is…there will BE no better opportunity / time to eliminate the IRS than right now, at this moment, in the midst of the on-going scandal / scandal investigation.

Obama and Democrats do NOT want to get rid of the IRS. It is a tool for Liberals to use to enforce their socialist agenda of ‘sharing the wealth’, taxing the richest the most to pay for their economic citizen-enslaving policies of addicting Americans to government hand-outs like Food Stamps, Welfare, Govt Cheese, free Obamaphones, etc… It is a tool with which they can engage in ‘behavioral modification’ by taxing people who refuse to do what they demand – like buying Obamacare insurance. it is a tool with which they can target American citizens, to strip them of their right to Free Speech, and to silence them for their own benefit – like during election time.

Getting rid of the IRS is the ONLY way to ensure none of these things ever happen again. Their promise of not doing so is worthless, and the only way to make sure it does not happen again is to eliminate the ‘tool’ itself.

easyt65 on April 15, 2014 at 10:46 AM

Americans just need to get off their collective @$$e$ and keep the pressure on them – the Federal Government – until it happens!

easyt65 on April 15, 2014 at 10:47 AM

The combination of the two has made getting more funding difficult.

As it should since there’s plenty of evidence one of the government’s most powerful agencies abused its power to curtail the political speech of one side doesn’t have any idea where boatloads of its funding does go.

FIFY

GWB on April 15, 2014 at 12:17 PM

Not that I have any desire to see you unemployed, but it’s possible that you just made the best case for a flat tax that I’ve ever seen.

(And that’s not sarcastic in the least.)
rogerb on April 15, 2014 at 8:05 AM

No offense taken. I happen to agree, personally. I’d love nothing more than to not have to deal with anything more than system issues. In the meantime, I’m doing something that at least provides taxpayers a real service.

How about the IRS go after the ones in their ranks that owe back taxes? Last I heard that was in the millions if not billions. Seems like they would get more than enough funding then. But then asking the IRS to go after their own is like asking Holder not to be a racist, it just won’t happen.
bbinfl on April 15, 2014 at 9:50 AM

I don’t know where this keeps coming from. IRS employees already have fewer rights than regular citizens in this regard. If we fail to file by 4/15, regardless of whether we owe money or are getting a refund, we’re fired. We can’t file for an extension, unlike others. As to “back taxes”, we are allowed, if we can’t pay in full by April 15, to set up an installment agreement to pay monthly (like other taxpayers). Unlike other taxpayers, we don’t get “skips”. If we default, we’re fired. If we need an installment agreement and it’s not approved by 4/15, we’re fired. The only exception is full medical incapacitation, which basically means “in a coma”.

This is one of a very few things we can be instantly fired for, without recourse. It’s a Section 1203 violation, if you’re interested in the actual law. If you want to point out Timothy Geithner, feel free. Secretary of the Treasury is the only job he could have held, and then only because a court decided Congress couldn’t add extra requirements to advise and consent. In any other position, he’d have never been hired.

Other federal employees aren’t held to the same standard, though I’ll agree they should be.

Asurea on April 15, 2014 at 8:17 PM