Here’s what it will take for the next IRS commissioner to succeed
Congress provided long-term funding to rebuild the IRS so it can effectively serve all taxpayers in the 21st century. The administration took the first step in making this program a success by appointing Daniel Werfel, a seasoned and accomplished executive with experience in both the public and private sectors, as IRS Commissioner.
Congress has long known that implementing major changes in the IRS requires a commissioner who can make tough management decisions. In the IRS Restructuring and Reform Act of 1998, Congress specified that the appointment of the IRS Commissioner “shall be made by persons who, among other qualifications, have demonstrated ability in management.” Additionally, Congress recognized that significant change takes time and therefore granted the commissioner a five-year term. Now is the time for the Senate to act on what Congress itself demanded — a qualified commissioner confirmed for a five-year term.
It is particularly important for the Senate to consider and confirm it in its post-election session because the new commissioner must be responsible for planning how to invest the long-term funds provided by Congress. This planning process is already underway. The IRS also faces critical priority decisions as it prepares for the upcoming filing season, which begins shortly after the New Year.
Congress has provided funds, and in a narrow accounting sense, the IRS has to say how it will spend the money. But this accounting exercise is not a strategy for making investments that will improve performance. Only a strategy that results in consistent and meaningful performance improvements, coupled with transparent and candid communication, will allow the new commissioner to earn the trust of the public and Congress. Money alone won’t do it.
The risk is that the IRS might do a little more of everything it does today, but it won’t work. Because despite many misleading claims from critics about massive increases in the size of the IRS, even after 10 years the funding provided by Congress will only bring the IRS to about 75% of the size compared to the economy it was in the 1990s.
Unless performance improves noticeably, the IRS could end up spending a lot of money in 10 years to accomplish only marginally more. And without clear progress along the way, the program would likely be declared a failure before the clock ran out.
To achieve the results that Congress and the public expect from increased funding, strong and consistent leadership from the commissioner and his team will be essential in making and executing complex decisions, such as setting performance goals and measuring performance, set clear priorities and do much more. effective use of technology, research and data to improve the Service and the Application. The next commissioner will also face a demanding challenge to build trusting relationships with his many stakeholders, particularly Congress, beginning with the confirmation process.
The IRS deals directly with virtually every family, business, and nonprofit entity in the United States, more than any other institution, and has a significant impact on those it serves. Therefore, the IRS should be subject to substantial oversight. To this end, eight congressional committees oversee the IRS. They are supported by the General Legislative Accountability Office and the Treasury Inspector General for Tax Administration. Together, these agencies issue hundreds of reports each year on the IRS and investigate any alleged incidents of wrongdoing.
Honest, accurate, and meaningful communication with stakeholders in all of these contexts is essential to building the Commissioner’s credibility as an effective leader who makes the IRS work better for all taxpayers. The fundamental principle of US tax administration is strict and apolitical compliance with the law. Any real or perceived departure from this principle is destructive to the foundation of the tax system and it is solely the responsibility of the Commissioner to ensure that this principle is respected and believed by the public.
Equally important is setting reasonable expectations for progress on service and compliance goals and realistically recognizing the challenges, risks, and setbacks that inevitably occur. This challenge will only increase due to the long-term funding now available for the IRS. This funding will raise expectations for improved performance of the IRS, as funding can no longer be cited as a major constraint.
With the right leadership in place and continued effective oversight, the IRS can – and we believe will provide – the 21st century service that all taxpayers have come to expect from the IRS while taking an important part $600 billion a year. the tax gap, which is an unfair burden for the vast majority of compliant taxpayers.
This article does not necessarily reflect the views of Bloomberg Industry Group, Inc., publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Fred Goldberg is a former IRS Commissioner and former Assistant Secretary for Tax Policy at the Treasury Department. He is currently an attorney at Skadden, Arps, Slate, Meagher & Flom LLP.
Charles O. Rossotti served as Commissioner of the Internal Revenue Service from 1997 to 2002. He is a senior advisor to Carlyle and focuses primarily on investments in information technology and business services.
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