IRS Commissioner John Koskinen is known as a fixer in government circles. Time and again, he has taken the helm of a topsy-turvy organization and stabilized it. Judging by his first nine months at the IRS, the agency could be his biggest challenge yet.
On one hand, Koskinen has borne the brunt of Congress’ wrath over allegations that the agency mistreated tea party and conservative groups applying for tax-exempt status. As the only politically appointed manager at the agency, Koskinen says, it’s his responsibility to testify before Congress.
He counts six ongoing congressional investigations into the scandal.
“We may be overly investigating the situation,” he said in an interview on In Depth with Francis Rose, noting that the agency already has implemented the recommendations of its inspector general. “I’ve had a series of 10 fun-filled hearings in the spring and summer.”
Sarcasm aside, Koskinen, as a former Senate aide, says he is a “big believer in congressional oversight” and that the IRS is trying to respond promptly to all the inquiries. He estimates that the agency has provided nearly a million documents to various committees.
“It is important for every taxpayer to feel comfortable that they’re going to get treated fairly,” he said. “Whomever they voted for, whatever organizations they belong to, whatever church they go to, they should be comfortable that if they hear from us, it’s because of something in their tax return, and if someone else had that issue, they’d hear from us as well.”
Koskinen says he’s hopeful that “before the end of the year, we’ll put most of this to rest.”
The tax man searches for money
It’s not enough for Koskinen to right the ship by addressing the complaints about the tax-exempt division’s treatment of certain groups. He also must plug holes in the agency.
When he isn’t answering congressional queries, Koskinen is trying to convince lawmakers to give the agency more money so it can hire more revenue agents and modernize its ailing computer systems.
“It’s clear that if we had more funding, we’d provide more money back to the government. It would be a net win for the government and taxpayers,” Koskinen said. “But I haven’t been able to make that case very successfully.”
Despite a veto threat from the White House, the Republican-led House approved a cut of $341 million to the IRS’ budget.
While the IRS hasn’t had mass layoffs, it had put hiring on hold over the past several years as its budget shrunk. Koskinen estimates that the IRS has lost about 5,000 revenue agents and will do 100,000 fewer audits this year.
The IRS call centers are also short staffed. Nearly 40 percent of people who called during the past tax season did not get through to a live person, Koskinen says. Without a boost in resources, he expects that percentage to grow.
If that happens, the tax man will bring in less revenue for the government.
“The vast majority of the $2.9 trillion we collect every year comes with voluntary compliance,” he said. “If that compliance rate changes by 1 percent, the government loses $30 billion a year.”
Moreover, Koskinen is appealing to Congress for money to overhaul, piece by piece, the IRS’ IT systems.
“We’re running applications that we were running when JFK was president,” he said. “If we got some money, then, one at a time, we would attack those applications.”
Like those computer systems, many of the IRS employees who operate them are nearing retirement age.
“One of our concerns is that we’ll run out of people who know how to do this. No one wants to learn an ancient language,” he said.
A ‘chance to harass the IRS commissioner’
Since taking the IRS’ helm in December 2013, Koskinen has held town-hall style meetings with staffers across the country.
“I tell employees, it’s their chance to harass the IRS commissioner,” he said.
While the IRS cannot fix its most critical problems, such as staff shortages or aging computer systems, without more money from Congress, Koskinen says the agency has made some strategic choices in response to employees’ complaints.
“Many managers haven’t seen the people they’re managing for over a year. So we’re doing more training this year than we’ve done in the past,” he said, adding that training is usually the first thing cut when budgets are tight.
“We need to continue to invest in the workforce if we expect it to be able to function effectively,” he said.
Considering the challenges facing the IRS, Koskinen says he’s surprised by employees’ “upbeat approach” to their work.
“It’s an amazingly ‘can-do’ agency,” he said. “I expected I’d find more of a morale problem than I did.”