The IRS Needs to Step Up Its Game

Less than six weeks since it was criticized in a published opinion of a federal court, in which the United States Court of Appeals for the Sixth Circuit admonished the IRS for the professional conduct of its attorneys,[1] the IRS now faces sanctions more serious than a verbal reprimand. In particular, on April 21, 2016, the House of Representatives passed two bills, one that ban the IRS from paying employee bonuses until it develops a plan to improve customer service and one that prevent the IRS from rehiring staff previously terminated for cause.[2] Supporters of the bills claim that the new laws are required because the IRS has failed to answer significant amounts of customer calls, if not most calls, during tax filing season, despite making customer service its top goal in its most recent strategic plan.[3] On the other hand, understandably, these bills have received heavy criticism. Unsurprisingly, the majority of House Democrats strongly oppose the bills, with Rep. Sandy Levin, D-Mich., arguing that one bill is “the worst kind of demagoguery [that] really [] descends to propaganda,” and that the real cause for the bill is because the House Republicans are not doing their job.[4] Similarly, the White House released a statement that the bill to ban IRS employee bonuses is not necessary because the IRS is already developing and executing a plan to improve taxpayer services, and attributed any poor IRS customer service to underfunding of the agency.[5]

Considering these bills from their stated purpose to remedy the IRS’s failure to deliver adequate customer service to taxpayers, one seemingly counterbalances the other. Logically, customer service improves by improving employee performance and morale. So, it makes sense, at least superficially, that preventing poor employees from being rehired would prevent the bad eggs from causing further problems. However, employees are traditionally motivated by the hope or incentive for increased compensation; accordingly, preventing the IRS from incentivizing employees is counterproductive to improving customer service. In short, one bill could improve the IRS’s customer service, while the other almost certainly will hinder any improvement.

To note, these bills were just two of six bills focused on IRS reform that were passed by the House on April 21.[6] Winds of change could be in the air.

–By Tony Nasser, Esq., Barnes Law

 Tony Nasser is an attorney with Barnes Law, licensed to practice law in California.

The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] http://www.barneslawllp.com/sixth-circuit-admonishes-irs/

[2] https://www.congress.gov/bill/114th-congress/house-bill/3724; https://www.congress.gov/bill/114th-congress/house-bill/4890.

[3] http://www.law360.com/articles/787284/house-votes-to-bar-irs-bonuses-until-service-improves

[4] https://www.congress.gov/crec/2016/04/21/CREC-2016-04-21.pdf; http://levin.house.gov/levin-floor-statement-irs-bonuses-bill-hr-4890

[5] http://www.law360.com/articles/787284/house-votes-to-bar-irs-bonuses-until-service-improves

[6] http://www.govexec.com/management/2016/04/house-passes-six-irs-reform-bills-agency-releases-filing-season-stats/127702/