This tax filing season, IRS needs reform, not new power
Last year was difficult for people who enjoy getting things on time. A global supply chain crisis led to delays in shipments and receipts of packages during the holiday season. Now, supermarket shelves are barren, and gas prices are creeping over $5 per gallon yet again. And if the IRS has any say, fans of timely returns will be just as frustrated, if not more so, in 2022.
Tax refunds and other services provided by the IRS will be delayed this year, according to
out of the Treasury Department. The IRS complains that this is because of challenges presented by the coronavirus pandemic as well as cuts to the agency’s budget over the last 10 years. This failure to perform its most basic function is yet another example of the agency’s incompetence.
As tax filing season gets underway, the IRS noted it will likely have a backlog of several million unprocessed tax returns. This means many people will wait for months to get their hard-earned money back from the government. This amounts to the government forcing taxpayers to give them an interest-free loan and then delaying repayment indefinitely.
Stunningly, amid all this, there are policymakers in Washington suggesting the IRS should have more power. Sen. Elizabeth Warren, a Massachusetts Democrat, has introduced the “Tax Filing Simplification Act,” which would put the IRS in charge of filing tax returns itself and sending taxpayers the bill when all is said and done. Simply put, this would be a disaster scenario.
When taxpayers file taxes, they choose the deductions that work best for them and their families. The IRS has no such motive at heart, and as its name suggests, it is solely concerned with bringing in revenue. There is no incentive for the IRS to work in the best interest of the taxpayer. Further, when there are disputes between taxpayers and the IRS, the burden of proof would be shifted to the former, making it harder for citizens to get access to money they were rightly owed and wrongfully denied by the government.
Not only has the IRS proven it does not act in the best interests of taxpayers, but it has shown that it often actively works against those interests. Analyses of its
show the agency
the poorest counties in America for excess scrutiny. The expressed reason behind this was that these communities do not have the resources to fight back.
With the IRS in charge of filing taxes, there is little doubt the ones who will be left behind are those who cannot fight back. If the IRS takes more than it is entitled to, vulnerable communities would either have to accept the missing income or attempt a complex legal battle in which the burden of proof is higher. Dealing with the IRS is daunting enough as it is. Proposals such as Warren’s would make things exponentially harder.
All this illustrates the “mission creep” underway at the IRS. The agency’s initial mission was to help people understand and navigate the tax code and to collect revenue. It slowly expanded to include the administration of social benefits and tax credits. Now certain members of Congress want to expand the agency into the tax filer for the nation.
When the IRS complains about having to lay off staff or the fact that its budget is smaller than it was years ago, perhaps the problem isn’t that it is ill-equipped to handle revenue collection. The problem may be that bureaucrats within the agency and would-be central planners in Congress have tried to expand the scope of the agency far beyond its original intent.
The proper solutions would be to scale back the agency’s role altogether. If the IRS is still searching for things to do, it can try to locate the sources of multiple illegal taxpayer information leaks in the recent past. It can also ensure no more people are targeted for scrutiny because of their political or socioeconomic statuses. Any solution that begins by further empowering an agency with such glaring holes misses the mark.
Daniel Savickas is the government affairs manager for the Taxpayers Protection Alliance.