The Power of the IRS

The political use of the IRS is one of our scandals of the week.  It has actually been scandal for some time, since 2010, and people I know in suspect organizations who have had the (threatening) investigative letters say that began shortly after the president was inaugurated.  The 1883 Pendleton Act and Hatch Act of 1939 may have been intended to depoliticize government bureaucracy and end the political spoils system, but that is not possible given human nature. The politics of the administrative departments of government are clearly with the Democrats.  When was that last not true?  Not since the New Deal, anyway.

Anyone working in government is likely to see risk from a party that insists on smaller government, and really, who can blame them?  This is at once the greatest argument for limiting government power and evidence for the question of why government only expands and never shrinks.  Even when Republicans are elected on a platform of limiting government, the bureaucracy is protected and will do whatever it must to protect itself. Again, the politics of the administrative departments of government are clearly with the Democrats since they have been the party of government growth.

But do our bureaucrats have to rub our noses in their collective power? The president may not have known the IRS was pursuing his political opponents, as he says.  Somehow, if he didn’t order the political persecution of those opposed to him, can we gain comfort from the fact?  No central command of this?  No comfort.  From the WSJ this morning:

The IRS sent questionnaires to conservative groups that included requests for everything from the resumes of directors past and present to whether an employee or employee family member had plans to run for public office. Cincinnati Tea Party founder Justin Binik-Thomas wrote in the Washington Examiner recently that one nonprofit received a questionnaire that demanded that it “Provide details regarding your relationship with Justin Binik-Thomas.”

According to the American Center for Law and Justice, which represents some of the IRS targets, the IRS letters did not come only from the Cincinnati office (as Ms. Lerner implied on Friday), but also from IRS offices in Laguna Niguel and El Monte in California as well as from Washington D.C. In addition to intrusive questionnaires, the groups were subjected to unusual delays in obtaining tax-exempt status. Of the law center’s 27 clients, 15 were approved, two withdrew out of frustration and 10 are still pending.

Individuals I know in our area who give to conservative groups have been audited and their businesses audited and scrutinized carefully.  This was expensive scrutiny.  It costs real money to defend yourself during an IRS investigation, especially when it amounts to a fishing expedition, looking for previously overlooked malfeasance.  You do not have to have to have purposed to do anything wrong, either.  IRS regulations are complicated, ententacled in contradictory and conflicting ways so that being right in one area can be questionable when examined in light of some other regulation.   The acting commissioner of the IRS, Steve Miller speaks of shortcuts, centralization, but broadening investigations from organizations to individuals associated with the organization and contributors doesn’t seem a shortcut in terms of work hours for the agency, not at all.

Then as Byron York rightly notes, we can be even more uncomfortable about Obamacare than we were previously because of the power of the IRS.  This is not just about any right to privacy,  but the right to ever be wrong by the lights of government.

In addition, the IRS will keep track of even the smallest changes in Americans’ financial condition. Did you get a raise recently? You’ll need to notify the IRS; it might affect your subsidy status. Have your hours been reduced at work? Notify the IRS. Change jobs? Same.

Last August, IRS official Nina Olson testified before Congress on the changes Obamacare will bring to Americans’ dealings with the nation’s tax collector. “Do you believe that most Americans are going to update the IRS or state exchanges when they change jobs, get married, move states, whatever?” Michigan Republican Rep. Tim Walberg asked Olson.

“I think it’s going to be a very great learning curve,” Olson answered. If Americans don’t keep the IRS up to date on their financial status, they might incur penalties, which the IRS will collect by withholding income tax refunds. “I think it will be a surprise to taxpayers if they don’t update their information,” Olson said.

Doesn’t this seem bad enough, onerous enough, even if we do not have to worry about the possible political uses of personal information?  Some months ago, Michael Barone wrote claiming that Obamacre would be impossible to implement,  that the system will founder over the problem of data collection and storage.  But who wants to live with that?  I do not know I fear more, what is worse, when bureaucratic systems that know everything about us work efficiently or when they do not.  When they work somewhat well and are manipulable, no joy there, either.

Update: How the IRS has come to resemble the FBI.