Outsource the IRS!

IRS Needs Funding for GOP Tax Overhaul, Report Says Years of budget cuts have hindered taxpayer service and tech upgrades, according to advocate

Excerpt:

Sen. John Cornyn of Texas, the Senate’s second-ranking Republican, said Wednesday, “We need to reform the IRS...but I am concerned that they’re not able to do their job and not maintaining their information systems to protect personal financial data by taxpayers and the like.” He added that he doesn’t have “an arbitrary amount that I think should be spent.” The agency will need $495 million over two years to implement the law, according to an IRS estimate cited in Ms. Olson’s report. She said the years of budget cuts have prevented the IRS from providing adequate taxpayer service or updating its technology.

IRS Spends Four Years and $140 Million to Upgrade Windows Software for Only Half Their Servers. Note: This article is 2 years old, but represents the incompetence of the tech side of the agency! 

Excerpt:

The IRS has failed to upgrade Windows software on its computers and servers by end of life deadlines, despite being expected to spend almost $140 million in taxpayer funds, according to a recently released report by the Treasury Inspector General for Tax Administration (TIGTA). The agency has already spent four years upgrading this technology, but is yet to upgrade half of its servers. In all, the IRS had 110,000 workstations to upgrade from Windows XP and 6,000 servers to upgrade from Windows Server 2003. This process officially began in April 2011, but the IRS did not actually begin upgrades until September 2012, 17 months later. Progress was so unsatisfactory that the agency’s Chief Technology Officer began to directly oversee this process. As the report notes: "Because the Windows 7 effort was not making sufficient progress in its completion, the Chief Technology Officer (CTO) made the decision in July 2012 to oversee the Windows 7 upgrade directly due to its complexity and magnitude." At the time of the TIGTA report, the IRS still has not upgraded half of its windows servers despite the “new” operating system being seven years old, and the current system being out of date and unsupported by Microsoft. However, it has completed upgrades for "most" computers although over 1,000 machines remain unaccounted for.

Top Ten Most Ridiculous Items Purchased with IRS Credit Cards

The list:

1. $119 worth of Nerf footballs that were intended to be used for a “team-building exercise.” As if that wasn’t bad enough, they never used the balls, which are “currently stored in a filing cabinet” somewhere in the bowels of the IRS.
2. At one luncheon, IRS credit cards were used for “related alcohol purchases” including 28 bottles of wine—for 41 guests. As a bottle of wine contains about five servings, this equates to three and a half glasses of wine per person.
3. For the child in all of us, the IRS purchased these for “managers’ meetings.” These were part of the “almost $4,000 in improper decorative and give-away items” that TIGTA found in their review. [see article for image]
4. Along with some jigsaw puzzles, the IRS purchased the “world’s largest crossword puzzle.” These purchases cost $89 of taxpayer money. Hopefully the IRS actually used these in their “team building” activities -- unlike those poor Nerf footballs.
5. Even IRS agents need a little love sometimes, which may be why plush animals were purchased with IRS credit cards as give away prizes.
6. Another one of the “give-away items” at the IRS managers’ meetings were “bathtub toy boats”. The IRS spent $418 to purchase these, along with some other “improper decorative and give-away items.” [see article for image]
7. Stove top hats [think Abe Lincoln] were purchased using an IRS credit card as yet another “give-away prize.”
8. The IRS must enjoy the sound of Kazoos. They used your tax money for “novelty decorations and give-away items, such as kazoos” which were awarded as prizes during their managers’ meetings.
9. a “dinner at an approximate cost of $140 per person, four times the Federal Government per diem rate in Washington D.C.” At the time of this conference the per diem rate was $36 for dinner.
10. The IRS spent five times the Federal Government per diem rate of $18 when they bought lunch at $100 per guest.

IRS admits Tea Party, other conservative groups were targets during Obama era

Excerpt:

In an unprecedented victorious conclusion to our four year-long legal battle against the IRS, the bureaucratic agency has just admitted in federal court that it wrongfully targeted Tea Party and conservative groups during the Obama administration because of their political viewpoints and issued an apology to our clients for doing so. In addition, the IRS is consenting to a court order that would prohibit it from ever engaging in this form of unconstitutional discrimination in the future.

In a proposed Consent Order filed with the Court yesterday, the IRS has apologized for its treatment of our clients -- 36 Tea Party and other conservative organizations from 20 states that applied for 501(c)(3) and (c)(4) tax-exempt status with the IRS between 2009 and 2012 -- during the tax-exempt determinations process. Crucially, following years of denial by the IRS and blame-shifting by IRS officials, the agency now expressly admits that its treatment of our clients was wrong.

You Can’t — and Shouldn’t — Abolish the IRS

Excerpt:

...the IRS does a lot of things besides just process complicated individual tax returns. Much of its resources, for instance, go into enforcing the corporate tax code ... . Meanwhile, a lot of IRS agents — quite possibly not enough — are assigned to providing customer service to taxpayers. And while conservatives are rightly wary of the civil-liberties violations that tax enforcers can commit, labor-intensive audits are important. If a lot of income goes unreported or taxes go uncollected, trust in the system breaks down, rates have to be higher, and the economy ails.

Comments:

• I am not proposing abolishing the IRS (see the final article). It could be abolished with a flat tax or consumption tax (national sales tax) or VAT tax, but none of these are politically attractive. 
• I've long proposed eliminating the corporate tax because all corporate taxes end up embedded in the products and services consumers purchase. But this too is not palatable to Joe sixpack who is clueless about this basic principle
• I propose the calculations for personal income tax be outsourced to the TurboTaxes of the world: TurboTax, TaxAct, H&R Block, Tax Slayer, and the professional tax software vendors.
• The IRS would still be the central repository of documents filed: The 1099's, W-2's, et cetera
• And the IRS would continue to be the dispersal agent of refunds and the recipient of taxes due. They would continue to be the official "bank" of withholding taxes and e-payments of estimated taxes (EFTPS)  (et al)
• What the IRS does a crappy job of - systems - would be outsourced to the TurboTaxes of the world (bullet point above). (see "IRS says it's using technology from JFK's time")
• This year I paid (gladly! They have a great product!) about $ 100 bucks for Turbo Tax client for my Mac. The TurboTaxes of the world are much more efficient at updating their products than the IRS is updating their own systems

What do you think? Comments appreciated!