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Every summer, the Taxpayer Advocate releases one of two annual reports to Congress. The summer report is the “Annual Objectives Report” which seeks to identify and work on priority issues for the upcoming Fiscal Year. The Taxpayer Advocate, Nina Olson, had done a good job for years trying to look out for the people, especially the the IRS being in such a tumultuous state recently.
This year’s report had three top priorities:
1) Long-Term IRS Strategic Planning and Taxpayer Service
The NTA expresses concern that the IRS continues to view itself primarily as an enforcement agency, with taxpayer service receiving less emphasis. As the IRS undertakes the development of a concept of operations, the NTA urges the IRS to place primary emphasis on “meet[ing] the needs of the overwhelming majority of taxpayers who are trying to comply with the tax laws.”
2) Assisting Victims of Identity Theft-Related Refund Fraud
Taxpayer service also failed for victims of identity thieves—as the problem has grown worse and more IRS filters are catching more potentially fraudulent returns, victims often have to wait a half year or more to receive their refunds.
3) Administration of the Patient Protection and Affordable Care Act (ACA)
This past tax year added the challenge of dealing with the new provisions under the ACA–the Premium Tax Credit (PTC) and the Individual Shared Responsibility Payment (ISRP). The upcoming year will see more complexity, and TAS will focus on training its case advocates to better assist taxpayers, notably on ACA collection activities and the Employer Shared Responsibility provision.
In related topics, reflecting on the recently completed filing season, Olson states the IRS ran a generally successful filing season under difficult circumstances, but maintains that there was still a group of taxpayers for whom the filing season was “the worst in memory.”
You can read the full report here:
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There are still ten tea party groups which haven’t received approval by the IRS — years after having applied for tax-exempt status. Some applications have been delayed five years by now. All in all, 547 applications were “centralized,” for extraordinary scrutiny.
According to a report by Senate investigators, “the Albuquerque Tea Party was one of the original test cases the IRS used to try to figure out how to handle tea party applications, and that group was still awaiting approval as of April. Accordingly, while substantial progress has been made since 2010 to reduce the backlog of political advocacy applications, IRS management has not yet been able to bring all of these applications to closure.”
There’s no way in the world that a backlog of FIVE years exists — and if it actually does, IRS top brass should be fired for running an incompetent, inefficient agency of that magnitude.
But nothing will actually happen. This was made painfully evident from reading the Senate report, which differed in its conclusions about the culpability of IRS officials. Indeed, it “cleared those top officials of more serious charges of trying to punish groups politically opposed to President Obama. Indeed, after two years of investigation the top Republican and Democrat on the Senate Finance Committee couldn’t even agree on whether there was politically motivated targeting in picking which applications to delay or to give extra scrutiny — the central allegation in the 2013 inspector general’s audit.”
The only IRS employee to be particularly named was Lois Lerner but even then, the assessment of her misdealings by Senate investigators was particularly weak. She was chastised for failing to “adequately manage the EO employees who processed these applications”, her handling of applications “was flawed in design and/or mismanagement”, and she showed “little emphasis” on “providing good customer service.”
Heads should roll. But they won’t, ever. The scandal is two years old now — which is ancient in the political world. People have moved on from their outrage and they are now focused mainly on 2016. The scandal is barely covered in the news anymore, which is how the IRS can still get away with keeping some groups remaining in limbo, due to a “backlog”, even after 5 years. It’s outrageous.
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Washington Free Beacon had a sobering article about the lack of fiduciary responsibility in the Social Security Administration. A report by the Government Accountability Office (GAO) found that for 5 years (FY2009-FY2013), disability payments totaling $371.5 million were overpaid to many individuals. “The report examined how concurrent Federal Employees’ Compensation Act (FECA) payments affect Disability Insurance (DI) overpayments.”
The most recent annual Social Security Trustees report showed that the projected date of insolvency for the Social Security Disability Insurance Trust Fund is late 2016, a date that remained unchanged from the prior year. With this crisis looming in the background, the report of overpayments is especially concerning. From the article:
“The GAO found that SSA did not detect concurrent FECA payments for about 1,040 individuals during at least one month from July 1, 2011, through June 30, 2014.
To test SSA’s internal controls, GAO randomly selected 20 beneficiaries for review. In all 20 cases, SSA’s controls failed to detect and prevent overpayments. In seven of the cases, SSA did not detect overpayments for more than a decade, and each of these individuals received $100,000 in overpaid benefits.
One of these seven individuals received FECA benefits in the 1980s and was approved for disability benefits 14 years later in 1994. The GAO found that this individual received $200,000 in overpayments for more than 20 years.
The SSA’s “internal controls” rely on beneficiaries to self-report overpayments.
“SSA officials told us that if beneficiaries do not self-report benefits, there are no system prompts that would alert SSA staff to ask beneficiaries if they are receiving any workers’ compensation benefits, including FECA payments,” states GAO. “SSA officials agreed that relying on beneficiaries to self-report benefits presents a challenge in identifying overpayments related to the concurrent receipt of FECA benefits.'”
Congress is aware of the projected date of insolvency, but has yet to agree on a path forward. What’s more, the date roughly coincides with the 2016 election, so of course no one is willing right now to make any decisions or provide any possible solutions. Without any changes, benefits will be reduced by nearly 20%. Currently the Disability Trust Fund provides more than $100 billion a year to roughly 11 million recipients, making it the largest government assistance program in the country.
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It really irritates me that someone who has been incredibly wrong on the Obamacare issue can still be taken seriously anymore. Ezekiel Emanuel, one of the architects of Obamacare and Rahm Emanuel’s brother, has argued firmly for years that Obamacare will revolutionize the healthcare market and lower costs. Now that the actual hard data has come in, and that data has shown that Obamacare costs are actually rising substantially, Emanuel does this sort of backpedaling on the issue that is absolutely ridiculous.
In an article earlier this month, Emanuel discussed “The Coming Shock in Healthcare Increases.” It must’ve been a shock to him and all the rest of the so-called experts who implemented this albatross of legislation without any understanding of real-world impact — how could costs do anything except skyrocket with all the provisions and regulations contained within the bill?
Now, this expert admits that prices are rising, and will continue to rise, “without further action.” What does he propose? More government intervention:
“Experts from across the ideological spectrum agree that the key to long-term cost control is to pay doctors and hospitals in a way that rewards cost savings and quality. Such payment reforms would move Medicare and private payers away from paying a fee for each service—which encourages doctors to order unnecessary and even harmful tests and procedures.
The Obama administration recently announced a laudable goal: 50% of Medicare payments will be made under new payment models by 2018. But to reach this goal, the administration must change tactics and use the authority given to it under the law to rapidly expand payment reforms.”
Because the government has been both correct and efficient with regard to Obamacare so far? The entire program from the start, including the rollout, website, pricing, and exchanges has been one giant colossal failure.
As if it couldn’t get any worse, Emanuel goes on to discuss an Obamacare program called “Accountable Care Organizations (ACOs)” (created by more “experts”), which Emanuel begrudgingly admits has been an utter failure so far:
“While many reforms are being tested, the administration’s main focus has been on creating “accountable care organizations.” ACOs are groups of medical providers that are rewarded for achieving savings on their total spending while improving quality.
The results so far are less than encouraging. Several studies found that ACOs achieved minimal savings after two years. This is not unexpected. Investing in technology, hiring nurses and changing the way care is delivered is complex and takes time to implement effectively. But we don’t yet have evidence that ACOs can reduce costs substantially.
The bigger problem is scale. In the advanced ACO program—which penalizes health-care providers for overspending—13 of 32 participating groups dropped out. In the other ACO program—which rewards organizations for underspending but does not penalize them for excessive spending—the number of new participants is falling, and more than half of the participants are now deciding whether to renew.”
So when the people who are actively involved in healthcare — the healthcare providers — decline to participate in a half-baked scheme cooked up by the Obama Administration to lower costs, does it signal to any of the “experts” that maybe they really aren’t “experts” at all? Of course not! Emanuel instead proposes yet another government “reform” idea: Medicare bundling. He goes on to explain how this new program idea is wonderful and perfect and the solution to all of our current health care cost problems. Pinky swear.
He ends his ridiculous article with an ominous plea to his readers: “Time is running out. If Mr. Obama doesn’t act soon to control costs, escalating costs may ultimately threaten the sustainability of his coverage expansion—and his entire health-reform legacy.”
Mr. Obama’s bill has singlehandedly destroyed the healthcare system in this country. The last thing we need is more government meddling and fiddling with programs, for Mr. Obama to again “act soon to control costs.”
The only thing Emanuel is correct on is the need to bend cost curves down. But his solution — more government and more experts and more programs — is utterly incorrect. Tort reform and health savings accounts are the only way to achieve cost savings. Obamacare did neither, and now the entire healthcare industry is worse than before. Emanuel has proven to be anything but an expert, only a cheerleader for a failed policy. Why are we still listening to him and his ideas?
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There’s not much more to say that what ATR lays out. In a nutshell, many IRS employees used an interoffice messaging chat system to communicate with one another, instead of email, because there was no archiving system turned on for that mode of communication — meaning there was no written trail of discussions. This methodology was discovered while looking at Lois Lerner’s emails.
From Americans for Tax Reform:
The IRS used a “wholly separate” instant messaging system that automatically deleted office communications, according to documentation released by the House Oversight Committee on Monday. The system appears to have been purposefully used by agency officials responsible for the targeting of conservative non-profits, in order to evade public scrutiny.
The system, known as “Office Communication Server” or OCS was used by IRS officials, including many in the Exempt Organizations (EO) Unit, which was headed by Lois Lerner.
As the Oversight Committee report states, the instant messaging system did not archive any communications, so it is not possible to know what employees of the EO unit discussed on it.
However, in an email uncovered by the Committee Lerner warns her colleagues about evading Congressional oversight:
“I was cautioning folks about email and how we have had several occasions where Congress has asked for emails and there has been an electronic search for responsive emails – so we need to be cautious about what we say in emails.”
Lerner then asks whether OCS is automatically archived. When informed it was not, Lerner responded “Perfect.”
While it is possible to set the instant messaging system to automatically archive messages, the IRS chose not to do so, according to one employee interviewed by the Committee. The fact that the agency chose not to archive messages raises questions about the true purpose of OCS and what discussions took place.
Needless to say, the apparent use of OCS to evade Congressional oversight once again shows that the IRS does not want the American people to learn the truth about the Lois Lerner targeting scandal.
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There was an opinion piece in the Wall Street Journal last month regarding Puerto Rico, called “Profligate Puerto Rico on the Brink”. It was written right at the time the the current Governor Alejandro García Padilla declared that Puerto Rico couldn’t pay its debts anymore. As someone who is involved in Puerto Rico with friends and clients whom I advise on matters there, I found most of the points agreeable — that Puerto Rico has not tried serious reforms before deciding to declare insolvency.
Some points he raises:
–The proposed budget for the fiscal year beginning July 1 contains no plans for head-count reductions.
–Puerto Rico’s debt crisis is the result of years of government mismanagement. Dozens of agencies and publicly owned corporations have run deficits year after year, making up the difference by borrowing from bond markets.
–The administration seems to believe higher taxes are the answer. An increase in the island’s sales tax passed last month, to 11.5% from 7%, is projected to raise more than $1 billion in a year. This is the fifth tax increase since 2013, intended cumulatively to generate more than $4 billion. In reality, they have raised less than $1.5 billion in new money as more Puerto Ricans move their economic activity underground, businesses cut outlays, and the exodus to the U.S. continues.
–In Puerto Rico, the decline in the real economy has been less than 8% over the past decade, and while total employment has declined 16%, the population has declined more than 10%, leaving the unemployment rate only slightly higher than it was in 2006. Yet the commonwealth continues to spend more on growth-inhibiting programs—regulations, fees and taxes—rather than on pro-growth stimulus initiatives like agency mergers, investment in business infrastructure and public-private partnerships.
One items, however, was incorrect; this has to do with Governor Fortuño, the Republican governor from several years back. The author suggested that overspending is a bipartisan problem by including Fortuño in his list of horribles . However, Governor Fortuño was the one leader who actually did make systemic changes to reduce Puerto Rico’s deficit. He eliminated 38,000 government jobs thereby reducing the size of the government by 20%. Then he cut income-tax rates by half and corporate-tax rates by nearly a third. He lowered the deficit to $660 million from $3.3 billion. For this, I disagree that he was just lumped into the analysis with the other profligate Democrats before and after him.
Reducing the size and scope of government is a major key part of getting Puerto Rico back on track. Without trying to sound callous, Puerto Rico should feel, to some degree, the consequences of their extraordinarily poor choice they made four years after the leadership of Fortuño who put Puerto Rico onto a path to solvency. By choosing to discontinue the rational, solvent course he had carved out and subsequently electing a leader that instead promised the unaffordable, Puerto Ricans must have to first experience tough reforms and cutbacks help Puerto Rico thrive once again.
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There was a short piece in the Wall Street Journal on July 7th in the “Notable and Quotable” section that should really be much more publicized. It documents how the FBI intentionally undermined the case against Senator Ted Stevens in 2008, thanks to a brave whistleblower.
The reason that this revelation is so incredulous is that the political aftermath of the case had long-lasting consequences on this nation, particularly through the passage of several controversial bills which may never have passed if the balance of power had not shifted in the Senate.
How did this happen? Prosecutors in the Department of Justice chose to indict Stevens on flimsy charges three months prior to the pivotal 2008 elections. Stevens himself pleaded not guilty and requested a swift trial in order to clear his name before the November elections:
“This case is about concealment,” the Department of Justice’s lead lawyer stated in her opening statement, claiming that the senator had concealed that he had not paid full value for renovations to his modest Alaska cabin. In fact, Ted Stevens and his wife had paid more than $160,000 for renovations that independent appraisers valued at less than $125,000 at the time.
But relying on false records and fueled by testimony from a richly rewarded “cooperating” witness that the senator was merely “covering his ass” when he wrote a note stating that his desire to comply with all Senate rules, government prosecutors convinced jurors to find the him guilty just eight days before the general election, which he lost by less than 2 percent of the vote. The cooperating witness, wealthy Alaska businessman Bill Allen, was testifying for his own freedom (he was guilty of unrelated crimes), that of his children (who received immunity from prosecution after the government apparently threatened them) and the ability to sell his company for hundreds of millions of dollars.”
The FBI failed to divulge that, during the initial interview with the contractor, he stated he was overpaid — then later changed his testimony to underpaid. Only because of a whistleblower did the knowledge come out that the FBI intentionally hid information that would have been damning to their case.
As a result of the FBI’s tactics, Ted Stevens was convicted of a crime. Stevens, at the time of his conviction, was the longest-serving Senate Republican in congressional history and the Senate at the time was evenly split. His defeat by a Democrat merely days after his conviction contributed to a multi-seat gain by the Democrats in the Senate.
The case was later invalidated and thrown out by another judge; however, the damage had been done. The loss of this seat changed the makeup of the Senate, meaning that a series of questionable Congressional decision were able to be passed at a later date. Now we have Dodd-Frank, we have Obamacare, and we have the worst recovery in the history of this country — all because the Department of Justice interfered with and ousted a sitting Senator that was perceived to be an impediment to “progress”.
Those at the FBI that withheld the evidence were punished, but not fired. But to add insult to injury, due to procedural error involving their disciplinary case, they “later had their review thrown out and punishment lifted. The board did not clear the attorneys of wrongdoing, it found that justice officials committed a “harmful procedural error that likely had a harmful effect on the outcome of the case before the agency,” according to the board’s 18-page decision.”
The Wall Street Journal had a fine summary of the whole sordid affair: “Did the government react in horror at having been caught with its hands in the cookie jar? Did Justice Department lawyers rend their garments and place ashes on their head to mourn this violation of their most fundamental duty of candor and fairness? No way, no how. Instead, the government argued strenuously that its ill-gotten conviction should stand because boys will be boys and the evidence wasn’t material to the case anyway. . . . Instead of contrition, what we have seen is Justice Department officials of the highest rank suffering torn glenoid labrums from furiously patting themselves on the back for having “done the right thing.”
The “right thing” in this case was removing a high ranking Republican Senator in order to help secure a Democrat majority and pave the way for transformative, unpalatable legislation to be passed in this country.
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Earlier this week, President Obama did an interview with Jon Stewart. Jon Stewart pointed to a number of government agencies that have had various scandals under his watch — including the IRS, the Department of Veterans Affairs, and the Office of Personal Management — and inquired as to why his Administration has been plagued with so many problems.
As the Washington Times reported, “Mr. Obama said Congress ‘passed a crummy law’ that provided vague guidance to the people who worked at the IRS. And he said that employees implemented the law ‘poorly and stupidly.’
The president went on to say that the ‘real scandal around the IRS is that they have been so poorly funded that they cannot go after these folks who are deliberately avoiding tax payments.'”
Congress cut funding this past year as a response to the targeting scandal. The IRS’s “internal auditor concluded that the agency did, in fact, target conservative and tea party groups for intrusive scrutiny”; Obama’s Department of Justice has not finished its own investigation.
The allegation that the IRS is underfunded is absolutely ridiculous; what’s worse is that Obama has repeated tried to blame the funding cut this past year as the reason for reduced customer service. However, their customer service had already been worsening over the past year and was orchestrated by the IRS itself.
A recent House Ways and Means report showed that, “while congressional funding for the IRS remained flat from 2014 to 2015, the IRS diverted $134 million away from customer service to other activities. In addition to the $11 billion appropriated by Congress, the IRS takes in more than $400 million in user fees and may allocate that money as it sees fit. In 2014, the IRS allocated $183 million in user fees to its customer service budget, but allocated just $49 million in 2015–a 76 percent cut.”
Just as Obama dared to close national parks and monuments and cut off treatment for cancer kids during the government shutdown, in order to inflict pain on ordinary citizens, the IRS decided follow the same tactic and abrogate its basic responsibility to help taxpayers with compliance. Reducing the ability to provide customer service is particularly shameless — and using it as a red herring to try to scoop up more funding to Congress is even more repugnant. Then to also blame funding on the reason why Congress wrote a “vague” law and therefore the IRS employees were helpless in implementing it, well, that is the worst excuse of all.
It just goes to show the Obama is still willing to deflect any blame he can for anything that reflects poorly on his abominable Administration and lack of leadership.
