Skip to content
Federal Tax

Former Taxpayer Advocate: IRS Reform Should Not Be Done ‘in a Vacuum’

Tim Shaw  

· 5 minute read

Tim Shaw  

· 5 minute read

Transformation at the IRS, propelled by the $80 billion appropriation from the Inflation Reduction Act (PL 117-169), should involve more input from outside stakeholders, which did not happen when the inflation bill was passed, according to the previous National Taxpayer Advocate.

Nina Olson, who served as the head of the Office of the Taxpayer Advocate from 2001 through 2019 and is currently the executive director of the Center for Taxpayer Rights, argued that the IRS funding portion of last year’s massive legislative package should have been considered similarly to the IRS Restructuring and Reform Act of 1998.

“[W]hat you had with the restriction Act, which was the last major transformation was first it was preceded by a bipartisan—note that word bipartisan—commission [that] went around the country and held hearing after hearing after hearing and received written testimony from hundreds of people from all different walks: practitioners, regular taxpayers, IRS employees, specialists, nonprofit sector folks, and created a set of recommendations which then went over to [the House Ways and Means Committee,” Olson said February 1 at a Tax Notes virtual event discussing IRS funding and agency reform.

Taking issue with how Olson’s comment that transformation can’t be approached “in a vacuum” could be interpreted, former IRS Commissioner Chuck Rettig pushed back that conversations on how to improve the efficiency of the IRS are not only “happening internally” or in a bubble, as he described

“Everybody you can think of is engaged and it really starts with Treasury … and on the outside you also have the big contractors who’ve come in and [other] transformational people,” said Rettig.

Clarifying her point, Olson responded that what is missing in the process of the current IRS transformation is the thoroughness and diligence of prior efforts seen in the late 90s, including nationwide hearings, public forums, and direct engagement with lawmakers, practitioners, and taxpayers. Most importantly, she reiterated, this was done on a bipartisan basis, a stark contrast to the present-day politization of the IRS, the new funding, and the agency’s roles as tax administrator and collector.

Olson explained that the report that came at the end of the Restructuring Act commission’s work “had some disagreements,” as members stated their personal positions, “but there was a consensus” as well.

Rettig agreed that, in reference to the way the inflation bill was passed, “nobody would have wanted this to come together like it came together.” He added that should IRS funding been enacted in a bipartisan fashion, there would not be “attacks” as there are surrounding the 87,000 figure, which some critics have used as a rallying cry to rescind the vast majority of the appropriation.

Instead, Rettig said, the Inflation Reduction Act’s pathway to becoming law “created a hysteria.”

 

Get all the latest tax, accounting, audit, and corporate finance news with Checkpoint Edge. Sign up for a free 7-day trial today.

More answers

Kansas Enacts Apprenticeship Tax Credit

by Chad E. Voss On April 24, 2023, Kansas Governor Laura Kelly signed the Kansas Apprenticeship Act, which creates an …