Under this administration, the IRS has proven its ineptitude time and time again. In light of countless transgressions such as the targeting of conservative groups based on political beliefs, it is clear reforms are badly needed to rein the agency in.
One proposal, S. 2809, introduced this week by Senator Rob Portman (R-Ohio) does just that by strengthening protection of taxpayer rights. The Senate must not delay in passing this important, pro-taxpayer legislation.
This legislation limits the power of the IRS to abuse audits and investigations in several ways. First, this bill ensures taxpayers have a right to appeal before going to tax court. Second, Sen. Portman’s bill closes several loopholes that allows the IRS to extend the scope of an investigation. Third, this legislation prohibits the IRS from unnecessarily wasting taxpayer funds on outside counsel.
In the past, the IRS has been subject to Congressional scrutiny by Finance Committee Chairman Orrin Hatch (R-Utah) over its decision to waste millions in taxpayer funds hiring an elite, white shoe law firm to perform an audit. Despite the firm having zero experience handling taxpayer data or performing an audit, this hiring was deemed wasteful, but not illegal.
While the agency continues to run rampant, there has admittedly been some success reining the agency in. Late last year, Congress succeeded in limiting the ability of the IRS to abuse its power through a series of reforms championed by Congressman Peter Roskam (R-Ill.).
Even so, the agency continues to abuse its power and ignore its responsibilities to taxpayers.
For instance, a recent report by the GAO revealed that the agency may still be targeting Americans based on an organization’s religious, educational, or beliefs. A separate report found that the IRS was failing to safeguard sensitive IT taxpayer data despite numerous prior warnings. The report concluded that the agency had a “significant deficiency” over its ability to ensure financial information is not exposed.
Clearly, there are many reforms still needed to hold the agency to account, and Sen. Portman’s legislation is one important step in this direction. The Senate Finance Committee has an opportunity to swiftly approve this important legislation, when it holds a markup on Wednesday to consider separate legislation taking aim at identity theft and tax refund fraud.