To paraphrase John Wayne in McClintock: Now, let's all calm down. In Washington, they throw the word scandal around with such abandon it's hard to know at any given time what it means. (According to dictionary.com it is a disgraceful or discreditable action). Well, look on the bright side; in the latest IRS "scandal" we at least seem to have misplaced the suffix "gate."
So, does the IRS's latest debacle rise to the level of scandal? I don't know yet; here's what I see so far. Among the many ridiculous tasks our politicians pile on the tax collector, the agency has been charged with determining whether political organizations applying for 501(c)(4) status are too political and to do that without getting political. Sounds like a winner to me. Last Friday, the IRS admitted it failed in performing that task. What a surprise.
The IRS also fails in administering a social welfare program known as the earned income tax credit. And just think of how well it will administer the myriad of rules it will have to deal with once the new health care system becomes fully operational. And why does it fail in these tasks? Because the IRS is not a social services agency or a referee in the political arena. It's a tax collection agency. Come on, a golden retriever could figure it out (run out and get Congress a golden retriever because they don't have a clue).
Of course, I suppose that it could just be a handful of petty IRS bureaucrats who don't like the Tea Party. After all, there are a lot of conservatives who want to eliminate the IRS. But I'm getting ahead of even myself with speculation like that.
The worst of this most recent IRS calamity so far is that the IRS played hide-the-ball, which to the IRS can mean: reveal as little as you think you are required to reveal, in not keeping Congress fully informed about how and why it was targeting certain political groups. This wouldn't be the first time the agency miscalculated there, and to its detriment. For decades, Tax Analysts has been trying to sell the IRS on the idea that transparency is best; that the best disinfectant is sunshine. I wish they'd listen to us better. But mostly we just end up in court.
Now, I'm not trying to downplay these events; they're bad even if this goes no further. Many people, including me, think the IRS has in the last several years been turning down a dangerous path. The night before the "scandal" broke, Nina Olson, the National Taxpayer Advocate, told a meeting of tax lawyers that she believes "we are beginning the slide to a radically different IRS." One that "will relentlessly drive forward on a path of more automation mostly to make its own work more convenient and rarely more helpful or tailored to the taxpayer." If anything good is to come out of this latest fiasco, it may be that the IRS gets shoved off this dangerous path. But I doubt it; the IRS doesn't listen to the Taxpayer Advocate anymore than it listens to us.
And even if there is nothing else in how the IRS handled the exemption applications of conservative political groups -- such as outside political influence, which the Treasury Inspector General for Tax Administration says there isn't -- Washington will make it worse.
The presidential leadership on this is: I only know what I read in the papers, and what I read in the papers is outrageous. Nobody home there. On Wednesday, the president fired the acting IRS commissioner. But there is no real IRS commissioner and hasn't been for months and months. Who fills that job? The President. Like I said, nobody home.
Congressional reaction is: It's all about us. We gave you, IRS, an impossible job; you failed; you didn't tell us; when we read it in the papers, you made us look bad; and now we are going to beat your brains in for it. And the brain-beating will be as public as the politicians can make it.
It's not hard to predict where this will end up. The IRS workforce, the majority of which are hard-working government servants who do their jobs with integrity, will be demoralized and fear-stricken. We've seen it before. And a passive, scared tax enforcement agency it not an effective tax enforcement agency.
The public's confidence in the nation's tax collector will be shaken in part because there will be no political leadership here beyond the posturing. That's not really good for a system that relies largely on self-assessment -- what some call voluntary compliance. Now, you tell me, please, where's the scandal? There will be plenty to go around.
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