Congress says the IRS must demonstrate “a culture of accountability” before it can restore trust — and appropriated funding — to the agency long beleaguered by controversial email scandals and audit backlogs.
Members of the Senate Finance Committee said they’re still looking for signs that the “dysfunctional culture” it detailed in an August report on the IRS’ backlog of unprocessed applications for tax-exempt status is disappearing.
This comes as House Oversight and Government Reform Committee Chairman Jason Chaffetz (R-Utah), along with 18 members of his committee, introduced a resolution Oct. 27 calling for IRS Commissioner John Koskinen’s impeachment.
“Impeachment is the appropriate tool to restore public confidence in the IRS and to protect the institutional interests of Congress,” Chaffetz said in a statement. “This action will demonstrate to the American people that the IRS is under repair, and signal that Executive Branch officials who violate the public trust will be held accountable.”
The resolution will likely go to the House Judiciary Committee next, under standard impeachment procedures. If it passes the committee, the House and then Senate will consider the resolution.
“The IRS vigorously disputes the allegations in the resolution,” an agency spokesperson said in a statement to Federal News Radio. “We have fully cooperated with all of the investigations.”
This is Chaffetz’s second attempt to remove Koskinen. In July, he and 51 members of Congress sent President Barack Obama a letter in July asking that the President dismiss Koskinen, but the White House did not respond.
House Oversight and Government Reform Committee Ranking Member Elijah Cummings (D-Md.) cited reports from the Treasury Inspector General for Tax Administration and Justice Department that found no evidence of political targeting, as he condemned his committee’s call for impeachment.
“There is zero evidence that Commissioner Koskinen engaged in these acts — to the contrary, the IRS has now spent $20 million and 160,000 employee hours cooperating with this misguided investigation,” Cummings said.
Earlier at a Senate Finance Committee hearing Oct. 27 — days after the Justice Department announced it would place no criminal charges on current agency leaders or former IRS official Lois Lerner — Koskinen detailed several actions his agency is taking in response to the committee’s report.
He said the IRS now requires that its managers meet with their employees to conduct periodic workload reviews. Leaders in its Exempt Organizations Unit now work in the same location as the employees who process applications for tax-exempt status.
“I am more concerned that the IRS lacks the necessary structural and procedural mechanisms to ensure that, as an agency, it remains accountable,” Senate Finance Committee chairman Orrin Hatch (R-Utah) said at the hearing.
But most committee members questioned whether in the wake the agency’s scandals, employees who were involved were fired, demoted or denied bonuses or promotions.
“The entire chain of command, starting with the commissioner and then the acting commissioner down five levels, are all no longer with the agency,” Koskinen said.
Budget cuts to blame
From his testimony at his confirmation hearing two years ago, Koskinen pointed to budget cuts as the biggest challenge facing his agency.
The agency’s funding has dropped by $1.2 billion since 2010. And the IRS spends nearly half of what other major countries like Germany, France and Canada spend on tax collection, according to a recent report from the Organization for Economic Cooperation and Development.
Koskinen said unfunded mandates, such as the Affordable Care Act and the Foreign Account Tax Compliance Act, also put a burden on his agency’s operations, dismal customer service and tax enforcement during the 2015 filing season.
“We are losing over $4 billion a year in collections compared to what we used to collect, because we have 3,000 revenue agents,” he said. “Those revenue agents collect over $1 million a year.”
Some lawmakers expressed an interest in boosting the IRS’ funding levels.
“This happens on a pretty regular basis in this town where folks in Congress will say the IRS or any other agency will have to do X, Y and Z, and sometimes pointing the accusatory finger but not providing the follow-up and the resources that are essential,” said Sen. Bob Casey (D-Pa.).
But others said they were more hesitant to restore funding.
“I’d like to see us increase the funding for taxpayer service,” Sen. Rob Portman (R-Ohio) said. “But it’s very difficult to have any kind of increased funding for anything at the IRS as long as there’s this lack of accountability and a lack of this sense that there will be consequences for actions.”
Pushing better communication
Koskinen described previous issues at his agency as management, not culture, problems. He said in his mind his most important change is encouraging his employees to note problems and tell him and their managers about their concerns.
“There are problems and they don’t surface,” Koskinen told Federal News Radio. “People try to deal with them and extend them out. They take far too long. If this problem had been addressed in 2012, I wouldn’t be the commissioner, we wouldn’t have all these hearings. My goal, and I do think it is significant, is for every employee to think of themselves as a risk manager and to feel not only empowered but responsible for pointing out issues.”
Koskinen said he’s set up an independent email account, where IRS employees can send him their problems, concerns and suggestions. So far, he said he’s received about 1,000 suggestions.
But not all members of the committee were thrilled with Koskinen’s response.
“The answer that you gave … is that there’s a new email system in place where your employees can directly email you” said Sen. Tim Scott (R-S.C.), when he asked Koskinen again about the most consequential change he’s made since the committee released its report in August.
“I think that’s an improper characterization,” Koskinen said.
Steady progress toward records management reform
With help from the National Archives and Records Administration, the IRS is using the Capstone approach to meet the requirements of President Obama’s 2012 Managing Government Records directive, which demands agencies manage all emails electronically by Dec. 31, 2016.
“We will be in compliance,” Koskinen told the committee. “In fact, we’re almost there now. We have the top 350 to 400 senior executives, their emails are all now separately cataloged and preserved.”
The agency will automatically transmit document protection and retention requests — emails and other records from 85,000 employees and top management — to front line managers at the bottom, Koskinen said. The IRS also is training its employees on what kinds of media and information they keep and document.
Three years ago, the IRS made the decision not to upgrade its email system because of budget cuts, Koskinen said. He acknowledged the agency should never rely on individual hard drives like the one that Lois Lerner used, and disaster recovery tapes as a backup.
Now though, the IRS has started to make those upgrades.
“We should have a standard, not something fancy, a standard email system that retains the records automatically, that’s easily searchable,” he said. “We shouldn’t have to spend $20 million in a year responding to legitimate congressional inquiries for information.”