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Saturday, December 10, 2016

With the exception of the 2012 Benghazi attacks, no Obama-era controversy has animated Republican imaginations quite like the one surrounding the Internal Revenue Service.

Congressional Republicans’ version of the scandal originally went like this: President Obama ordered the IRS to target right-wing organizations applying for tax-exempt status as non-political “social welfare” groups, leading the agency to harass those on the president’s Nixonian enemies list.

It turns out that none of that ever happened; the IRS targeted liberal groups as well as conservative ones, not a single Tea Party group was denied tax-exempt status (despite overwhelming evidence that many of them were engaged in political activity), and no evidence ever emerged that the White House was involved in any of it. Still, that hasn’t stopped Republicans from escalating the “scandal” in increasingly ridiculous ways.

The current outrage centers around the IRS’ claim that thousands of former IRS official Lois Lerner’s emails were lost when her computer crashed in 2011. Although evidence and logic suggest that this was not part of a massive cover-up, Senator Ted Cruz (R-TX) is threatening to impeach Attorney General Eric Holder unless he appoints a special prosecutor to investigate it, and Reps. Louie Gohmert (R-TX) and Bill Flores (R-TX) have introduced a bill promising a $1 million bounty to anyone who can restore the lost emails, while threatening to cut the salaries of IRS employees by 20 percent unless the emails are recovered.

As it happens, Republicans have already hammered IRS employees with cuts since they took control of the House of Representatives in 2011 — and they didn’t even need a “Nixonian” “scandal” to do so.

In a report released Wednesday, the Center on Budget and Policy Priorities illustrates just how badly Congress has constrained the IRS’ ability to do its job. Due to a combination of discretionary budget cuts and sequestration, the IRS has been left with an $11.3 billion budget for 2014. That’s $840 million lower than it was in 2010, amounting to a 14 percent cut when accounting for inflation.

CBPP Chart 1

As a result of the cuts, the IRS has been forced to reduce its workforce by 11 percent since 2010, even as the agency’s workload has substantially increased (for example, in addition to the IRS’ new campaign finance responsibilities, CBPP notes that the number of individual tax returns has grown by 1.5 million annually over the past decade).

CBPP Chart 2

Furthermore, even as the IRS’ remaining workers have been forced to take on more responsibility, the agency’s training budget has been slashed by an astonishing 87 percent between 2010 and 2013, the most recent year with available data. If Congress wants to know why the IRS struggled so badly at sorting out the glut of groups that applied for tax exemption, there is your answer.

President Obama’s 2015 budget would reverse the rapid slide in the IRS’ funding; it would increase the agency’s budget by $1.2 billion from this year’s level, returning it to roughly its 2010 level (before adjusting for inflation).

The House appropriations subcommittee wants to go further in the other direction, however; it has proposed cutting IRS funding by yet another $340 billion. This is especially illogical considering the GOP majority’s supposed desire to limit the budget deficit. According to the Treasury Department, each $1 spent on the IRS budget yields $4 of revenue.

“Policymakers should give the IRS sufficient resources to carry out its mission,” the CBPP paper concludes. “In particular, policymakers who profess to be concerned or even alarmed about the nation’s current or future fiscal course should provide the IRS with the funding it needs to administer the nation’s tax laws and collect taxes due under the laws of the land.”

CBPP is not the first to sound the alarm over the IRS’ lack of funding; The National Memo’s David Cay Johnston made a similar argument in 2013, at the height of the “targeting” controversy.

Republicans are clearly desperate to uncover a real scandal at the IRS. But if they really want to improve things at the much-maligned agency, they need look no further than their own budget proposals.

Photo via Wikimedia Commons

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