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  • Be Afraid

    Posted by David Foster on July 23rd, 2009 (All posts by )

    Many Unhappy Returns, by Charles Rossotti, is the story of Rossotti’s experiences as IRS Commissioner, which position he held from 1997-2002–having previously spent his career in the private sector and been cofounder & chairman of American Management Systems Inc. I picked the book up for a dollar at a library book sale, thinking it might offer an interesting case study on the challenges of managing and improving a very large bureaucratic organization.

    And I’m sure it does. On the very first pages of the book, though, are some stories which are very relevant to our current political situation.

    During the 1990s, public dissatisfaction with the IRS reached new levels, resulting in a series of Congressional hearings beginning in 1996. Rossotti excerpts some of the stories told by taxpayers (and IRS agents) at these hearings, and grim reading they are indeed.

    For example, a woman from California told of her 14 year struggle to pay off a tax debt incurred by her first husband prior to their 1983 divorce. “Kafka himself could not have invented this real-life tale of an ordinary person caught in a maddening bureaucratic maze with no maps, no exits, and no explanation,” says Rossotti. Her ex-husband had gotten all the notices, but she alone had gotten the bill for interest on the unpaid balance. When she tried to pay it, the IRS repeatedly refused to accept payment, telling her she didn’t owe anything and even sending her refunds. But years later, the IRS threatened to put a lien on her new husband’s home because of her prior “debt.” She paid it but five years later, her second husband’s salary was levied for payment on the same “debt,” leaving the couple with only $18 a week to live on.

    “The IRS is judge, jury, and executioner–answerable to none” said the woman in her Congressional testimony.

    An IRS agent–the only one willing to testify without concealing her identity–claimed that it was an intentional policy of IRS management to pick on weak taxpayers to make the IRS’s statistics look better. She said that “to the IRS, vulnerabilities can be based on a perception that the taxpayer has limited formal education, has suffered a personal tragedy, is having a financial crisis, or may not necessarily have a solid grasp of their legal rights”…that “if the taxpayer does object or complain, every effort will be made by the IRS to run up their tax assessment, deplete their financial resources, and force them to capitulate to IRS demands.”

    A Newsweek story said that “According to more than a dozen agents…(management) pushed for ever more property seizures from delinquent tapayers, even though the IRS manual says such moves should be a final resort, riding roughshod in some cases over their rights to appeal. They closed cases an sometimes slapped on levies and liens prematurely–which boosted the enforcement stats that the IRS rewards with cash awards for top officers.” There’s lots more of this stuff in Rossotti’s book.

    Government is inherently dangerous. As a Delaware construction contractor said during the hearings, “believe me, when the resources of the government are unleashed on you, you are in trouble, no matter how good your case.” And this point is not specific to the IRS.

    Reading these stories reminded me of a passage that has been attributed to George Washington:

    Government is not reason, it is not eloquence, it is force; like fire, a troublesome servant and a fearful master. Never for a moment should it be left to irresponsible action.

    It’s not clear that this quote really came from George Washington–but whoever said it, it captures an important truth. Yes, government is essential, but it is inherently very dangerous and there must be constant vigilance to keep this danger in check. Yet the dangers to individuals that come from a tremendous expansion of government seem entirely invisible to the “progressives” who currently dominate our national politics. This despite the fact that over the last century, hundreds of millions of people have been killed by their own governments and billions more subjected to lifetimes of unnecessary poverty.

    And I would assert that the organizational and systems issues involved in enforcing the IRS regulations fairly, although not simple, are far less complex than those involved in a national healthcare program. And the time criteria are much more stringent in healthcare–a delay of a week usually won’t matter in an IRS case; in a healtcare situation, it may literally be a matter of life and death.

    In virtually every aspect of American life, we are now seeing efforts to vastly expand government power, while ignoring or minimizing the dangers associated with such expansion.

     

    4 Responses to “Be Afraid”

    1. Shannon Love Says:

      The real danger in modern government is the lack of internal checks and balances. We consider it axiomatic that elected offices must be balanced by other elected and unelected branches but we have no problem investing sweeping power unchecked power in bureaucracies.

      For example, the EPA receives a bigger budget and people within the EPA promotions and higher salaries if environmental studies demonstrate a need for more environmental regulation. Who conducts these studies, why the EPA. This pattern repeats itself in every other government organization.

      People who see an obvious conflict of interest when a private institutions conducts studies that justify more money going to the institution see no problem with government agencies doing the same thing. We should instead split up government agencies into two or more compartments. One would conduct research and monitor effectiveness of programs while the other compartment actually carried out the duties. We could further separate powers by making the research and monitoring compartment report directly to congress instead of the President.

      In the case of the EPA, we would the EPA which regulates environmental matters and then we would have have an Environmental Research Agency or ERA that would tell us what was actually going on.

      In the case of the IRS, we should divide the power up between IRS agents, prosecutors and tax judges. Each compartment would, like in the civil criminal system, be separate organizations. I’d like to get rid of the presumption of guilt that exist in the tax code but no where else. In tax law, you have to prove you don’t owe taxes the government doesn’t have to prove you do. I don’t see that happening.

    2. renminbi Says:

      The government is NOT the people,and does not represent the people de facto. To control this monster people should be allowed to sue gov’t agencies or officials on behalf of the public. A successful suit results in an agency’s appropriation being impounded by the treasury. If a department is redundent it is shut down. The person bringing suit gets a portion of what is saved. Gov’t of,for and by the people long ago perished here, but it is time REAL accountability returned.

    3. veryretired Says:

      There was an audit of the IRS a few years ago which concluded that their record keeping was so faulty that, if they had been a private company, the people responsible would have been indicted.

      I fail to see why these same standards should not be applied to governmental agencies with the same rigor as they are to private businesses and citizens. A few indictments and some jail time would go a long way toward clearing up the corruption and lawlessness which seems to be engulfing all levels of government, but the federal most seriously of all.

      The fastest route to an authoritarian state is that of allowing the ruling cadres to believe themselves above the law. I am afraid we are long past that point, and we need to rectify the situation quickly and sternly.

    4. Vader Says:

      Many liberals reject American exceptionalism. Yet, in the face of historical evidence that governments regularly murder, torture, and impoverish their citizens, these same liberals seem to feel that the American government is in fact exceptional — it can be given sweeping powers without any danger of it doing these things.

      Logical consistency is difficult to achieve in the best of circumstances. But I wonder sometimes if liberals are even trying.