Tax Roundup, 5/16/2013: Acting-out edition. And a real Iowa economic development initiative.

May 16th, 2013 by Joe Kristan
No-longer-Acting IRS Commissioner Steven Miller

No-longer-Acting IRS Commissioner Steven Miller

So the Worst Acting Commissioner Ever is gone.  From The Wall Street Journal:

 President  Barack Obama  forced the resignation Wednesday of the acting commissioner of the Internal Revenue Service in connection with the inappropriate targeting of conservative political groups.

“Americans are right to be angry about it and I’m angry about it,” Mr.  Obama said in announcing the departure of acting IRS Commissioner Steven Miller, who took over the post in November. “The IRS has to operate with absolute integrity.”

Mr. Miller’s resignation is necessary, given the evidence that he hasn’t been honest about IRS harassment of right-side political organizations, but it won’t be sufficient to quell the scandal.   Yesterday’s line, that the scandal was the work of “two rogue employees” in Cincinnati, is risible in light of the involvement of the D.C. and Laguna Niguel offices in the harassment.  That is, unless the two rogue employees were Doug Shulman and Steven Miller.

The TaxProf rounds up a big day in big media coverage: The IRS Scandal, Day 7.  Other blog coverage:

 

Tony Nitti, IRS Takes Time Away From Bullying Tea Party To Release Snoop Lion’s Tax Lien:

So in my view, the problem here isn’t so much that the IRS “targeted” a particular type of taxpayer — because that’s what the IRS does – but rather that in targeting the Tea Party, the Service is reflecting a political bias, something an arm of the government simply cannot do.

I think that’s about right.  Given the long delays in Tea Party applications, while similar applications by left-side groups were routinely approved, it’s pretty hard to believe that it wasn’t discrimination against right-side viewpoints.

 

Christopher Bergin, Scandal, Scandal, Scandal (Tax Analysts Blog):

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.

But we can trust them to regulate preparers, right?

Victor Fleischer raises related point in a New York Times piece.  While I think some of the focus on “institutional” issues is a way to change the subject from political bullying, I don’t mind if it leads people to realize that the tax law is for collecting taxes, not the Swiss Army Knife of public policy.

Howard Gleckman at TaxVox clings to the “botched processing” line: The IRS and the Tea Party: Treasury Report Finds Big Bungling but Small Scandal

Joseph Henchman, President Obama Obtains Resignation of IRS Acting Commissioner; Takes Effect in June (Tax Policy Blog)

TaxGrrrl, Acting IRS Commissioner Miller Out In Midst Of IRS Tax Exempt Scandal

Kay Bell, Obama fires IRS Acting Commissioner

Peter Reilly, Have Some Sympathy For IRS Cincinnati Gang That Couldn’t Sort Straight

Going Concern, Acting IRS Commissioner Is Gonna Take Off Now

Me, So the Worst Acting Commissioner Ever is done.  Too bad, they just finished his official portrait.

 

 

In other news:

Minnesota Budget Deal Includes $2 Billion Tax Hike (Elizabeth Malm, Tax Policy Blog):

The budget adds another income tax bracket on single filers earning $150,000 or more annually. The state’s top rate will now be 9.85 percent, making it the fourth highest top rate in the country. Politicians are spinning this as only affecting the “top 2 percent,” but that misses the point.

Pushing more of the tax burden onto a smaller, wealthier group is poor policy, not because I care about rich people more (an absurd and inaccurate, but unfortunately common, assertion), but because those incomes are volatile. Income tax revenues that derive a large share of receipts from the wealthiest are unstable, and there’s a lot of research to back that up (a few examples can be found here and here). This point is exacerbated by the fact that lawmakers might also throw in an additional temporary income tax surcharge on those earning $500,000 or more.

This will do more for Iowa’s economic development than anything the Iowa economic development bureaucracy ever will.

 

Tax Justice Blog, State News Quick Hits: Why a Revenue Uptick is Not a Surplus, and More

You’re as young as you feel.  A Rhode Island man pleaded guilty yesterday to charges arising out of an alleged kickback operation involving the Navy.

At age 81.

Maybe there are federal prisons with shuffleboards.

 

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