New IRS chief to battle for more funding

The new IRS commissioner on Monday made clear that he's prepared to do battle with congressional Republicans over a funding increase for the beleaguered agency.
John Koskinen, now entering his third week in charge of one of the least popular agencies in Washington, acknowledged a funding boost is a tough sell in the wake of the controversial targeting of conservative groups.

“Over the four years of my term, the funding issue is probably the most intractable, difficult one that we need to deal with,” Koskinen told reporters at a briefing at IRS headquarters.
GOP lawmakers have long opposed giving more money to the IRS — a stance that hardened last year after the agency acknowledged inappropriately singling out Tea Party groups seeking tax-exempt status.
“Let me be clear, until the IRS proves that it can responsibly manage its current funds, the IRS will not see one more dime in taxpayer funding,” House Ways and Means Committee Chairman Dave Camp (R-Mich.) said at a hearing in June 2013.
Like other government agencies, the IRS has faced shrinking budgets in recent years as deficit reduction became a central focus on Capitol Hill.
The IRS spent about $11.2 billion in fiscal 2013, almost $1 billion less than in 2010 and well under the $12.9 billion that President Obama has requested for 2014.
The agency had gone more than a year without a confirmed commissioner before Koskinen — a former Freddie Mac executive with a reputation as a turnaround specialist — took over.
Obama pushed out one interim chief last year, while Lois Lerner, the public face of the targeting controversy, retired.
Koskinen told reporters that he wants to put to rest the controversy over the agency’s treatment of 501(c)(4) applicants, while at the same time restoring taxpayer trust, improving customer service and ensuring that the agency succeeds in implementing ObamaCare.
But the commissioner also acknowledged that it would take some time for both taxpayers and lawmakers to regain faith in the agency.
“My rule in life is you have to listen to everybody, and take their concerns at face value and in good faith,” Koskinen said. “I’m looking forward to talking to people who are concerned about the IRS, concerned about its funding, concerned about its activities.”
“We’re not going to turn employee morale around overnight. We’re not going to turn public trust around overnight,” he said. “It took a little while to dig the hole, and it’s going to take us a little while to get out of it.”
The IRS commissioner said that he met with a string of senators as he prepared for his confirmation hearing last month, and was planning meetings with House members.
Still, Koskinen insisted that much of what ails the IRS could be solved with more funding, and stressed that every dollar funneled toward enforcement brings back several times that amount in new revenue.
The funding level that the president asked for, Koskinen said, would boost customer service and help the IRS update what he described as woefully outdated information technology equipment.
“We’re still storing data on magnetic tapes, which is a bit of an indication that we’re not quite into the 21st century yet with IT,” Koskinen said.
Koskinen has many other items on his to-do list.
The new commissioner said he hopes that the agency is almost finished providing documents to lawmakers investigating the targeting of Tea Party groups.
Top House Republicans, whose inquiry into the controversy is ongoing, have criticized the IRS for not providing documents quickly enough. The Senate Finance Committee is hoping to release its bipartisan investigation early this year as well.
Republicans on Capitol Hill insist that the IRS treated conservative groups far more harshly than other organizations. Democrats have said agency leaders were guilty of mismanagement, but that the targeting wasn’t politically motivated.
Koskinen said he hopes new proposed rules that would limit how much political activity tax-exempt groups can engage in will lead to more certainty for both the organizations and the government.
He also praised the IRS for the work it has already done to implement key tax credits that will be available under ObamaCare.
But Koskinen also acknowledged that bigger ObamaCare tests remain, with reporting requirements for the credits not beginning until the 2015 filing season.
The commissioner added that he expected the IRS to follow through on a program for tax preparers even if it loses an upcoming court appeal, and that the implementation of a law to crack down on offshore tax evasion was proceeding as planned.
But even with all those challenges in front of him, Koskinen told reporters that he doesn’t think that the IRS needs a major overhaul.
“I don’t think the IRS is in the need of any great restructuring,” Koskinen said. “I think its challenges are management challenges.”
He also vowed to bring more transparency to an agency that has long been seen as too opaque — criticisms that only grew in the wake of the targeting controversy.
Still, Koskinen said his push for transparency wasn’t a deliberate effort to break with his predecessors.
“I haven’t spent much time looking backwards at what happened,” Koskinen said. “It’s not something I’m doing to counteract anything that’s happened in the past. That’s the way I’ve always run.”

— This story was updated at 5:39 p.m.