Commissioner calls for greater IRS funding

BY ALISTAIR M. NEVIUS, J.D.

The IRS needs more money to effectively do its job, especially with its added responsibilities under the Patient Protection and Affordable Care Act. That was the message IRS Commissioner John Koskinen delivered to attendees at the American Bar Association Tax Section’s spring meeting in Washington on Friday.

It was standing room only as several hundred tax lawyers crowded into a large meeting room hear the commissioner’s remarks.

The commissioner compared the level of IRS funding in President Barack Obama’s 2015 budget request with the agency’s current funding level and described all the things the IRS could do with the extra $1.35 billion, including more enforcement and better taxpayer service. He opined that under the president’s proposed level of IRS funding 80% of taxpayer phone calls could be answered, rather than a predicted 53%.

He also praised IRS employees for the success of this year’s filing season and discussed his recently completed tour of IRS offices, at which, he said, he met 10,000 IRS employees.

Koskinen briefly addressed last year’s revelations of improper handling of applications for tax-exempt status under Sec. 501(c)(4). He said the agency is cooperating with six ongoing investigations into the matter and has supplied some 725,000 documents relating to the investigations. He also discussed the backlog in exempt organization application approvals in general. He expressed his hope that a new Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, for small organizations will reduce the backlog by allowing those small organizations to be approved in a matter of weeks.

In response to a question about his reaction to a recently passed House of Representatives resolution holding former IRS Exempt Organizations Director Lois Lerner in contempt, Koskinen said that he, as the agency’s only political appointee (besides the chief counsel), should be the one to testify before Congress, not agency employees. “Career employees don’t testify,” he said. “That’s what political appointees do.”

He was also asked why lawyers, who are eligible to represent taxpayers before the IRS under Circular 230, Regulations Governing Practice Before the Internal Revenue Service (31 C.F.R. Part 10), must nevertheless pass a test before they can prepare returns at Volunteer Income Tax Assistance (VITA) centers. Koskinen confessed he was not aware of the issue but promised to look into it.

Alistair M. Nevius ( anevius@aicpa.org ) is the JofA’s editor-in-chief, tax.

SPONSORED REPORT

8 accounting and auditing issues you can’t afford to ignore

Download this sponsored report for an overview of some of the most important developments accountants and auditors are facing today.

DOWNLOAD

Filing season quick guide — Tax year 2014

Tax season started Jan. 20. Download our “quick guide,” a printable card that contains dollar thresholds, tax tables, standard amounts, credits, and deductions to keep at your fingertips during tax season.

TAX NEWS

Expired tax provisions extended for 2014

President Barack Obama signed legislation that retroactively extended more than 50 expired tax provisions for 2014, allowing taxpayers to take advantage of a host of tax incentives during this filing season.