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IRS: The Superagency

October 19, 2010

Peter Pappas highlights a provocative interview from a former IRS commissioner, as reported in WebCPA, Mortimer Caplin said that loading the IRS with responsibilities outside of collecting taxes weakens its ability to do its real job:

"IRS personnel are people with accounting, economic and investigative abilities. The new programs require them to carry out other functions for which they’re not qualified."

For example, he noted, "Even the Earned Income Tax Credit could have been handled by Health and Human Services. What has happened is that there are a tremendous amount of fraud and deficiencies associated with the program. This has produced a great loss of revenue, because the Service has to focus attention on the wrong returns. Rather than looking at high-income returns, with, say, foreign investments, they have to examine the EITC. Their mission has been watered down."

Though I suspect the added powers may be seen as a feature, rather than a bug, by the current power-hungry IRS Commissioner.

Let's go back in time to see Commissioner Caplin running an IRS largely free from non-tax responsibilities:

Tags: Mortimer Caplin.Peter Pappas.tax policy.

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