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

Get your clients ready for tax season

Upon its enactment in March, the American Rescue Plan Act (ARPA) introduced many new tax changes, some of which retroactively affected 2020 returns. Making the right moves now can help you mitigate any surprises heading into 2022.

100th ANNIVERSARY

Black CPA Centennial, 1921–2021

With 2021 marking the 100th anniversary of the first Black licensed CPA in the United States, a yearlong campaign kicked off to recognize the nation’s Black CPAs and encourage greater progress in diversity, inclusion, and equity in the CPA profession.