Douglas Shulman

Senate Democrat to IRS commissioner: “No taxes, no bonuses”

Responding to an internal watchdog report finding the IRS gave bonuses to workers who haven’t paid their taxes, Sen. Joe Manchin (D-WV) fired off a letter to Commissioner John Koskinen demanding that the agency take immediate action to rescind the bonuses.

“I am appalled by the findings outlined in the Treasury Inspector General for Tax Administration’s recent report that exposes millions of dollars in bonuses and awards paid to Internal Revenue Service employees with conduct issues and federal tax compliance problems,” Manchin wrote to Koskinen. “This is completely unacceptable and must be remedied immediately.”

The TITGA report found that bonuses totaling $2.8 million were IRS employees with disciplinary issues between 2011 and 2012. This includes more than $1 million to workers with outstanding tax issues.

Koskinen was only recently appointed to serve as IRS commissioner. The bonuses came under Douglas Shulman, who served as the agency’s commissioner from March 2008 to November 2012. It was also on Shulman’s watch when the agency targeted conservative groups.

“The faith of the American people in the integrity of their government is corroded every time gross negligence and indecency of this sort comes to light,” said Manchin. “How can we expect the American people—many of whom are struggling to make ends meet—to trust their government when they learn that the very agency charged with collecting their tax dollars is rewarding employees who haven’t paid theirs?”

Rick Santorum’s Role in the Making of an IRS Chief

By now, we’re all familiar with the scandal that has plauged the Internal Revenue Service and the Obama Administration. Many questions are left to answered, and there is some hope that we will discover more on Wednesday when the House Oversight and Government Reform Committee will question Douglas Shulman, former head of the IRS.

Some Americans may be asking themselves how the IRS got stuck with such inept leadership — it is, after all, a government agency, but that’s a topic for another post. The answer may lie with former Sen. Rick Santorum (R-PA).

Ike Brannon, a senior fellow and director of research at the R Street Institute, tells the story of how Santorum’s temper and objection to the removal of a tax deduction on charitable giving lead to the Senate passing on Dean Zerbe, who was slated to be come the nominee for the top post at the IRS:

When it came time to replace the retiring IRS commissioner in 2007, Senator Charles Grassley, ranking member on the Senate Finance Committee, offered up one of his senior staffers on the committee by the name of Dean Zerbe.

The president’s people had no real objection to the choice: Zerbe had been on the committee for a long time, and he was considered a tax code savant as well as a shrewd lawyer, albeit one with sharp elbows. But the elbows hit the ribs of people on both sides of the aisle because Zerbe was very aggressive (at his boss’s behest) at rooting out tax dodges and finding ways to raise revenue without increasing taxes.

Did the Former IRS Chief Lie About Tea Party Targeting?

Douglas Shulman

Former IRS Commissioner Douglas Shulman has some explaining to do, though whether Tea Party and conservative groups targeted by the agency during his tenure will get any answers remains to be seen.

In a March 2012 appearance before the appearance before the House Ways and Means Committee, Shulman was asked about the allegations by Rep. Charles Boustany (R-LA).

“We’ve seen some recent press allegations that the IRS is targeting certain Tea Party groups across the country — requesting owners’ documents requests, delaying approval for tax-exempt status and that kind of thing,” noted Boustany. “Can you elaborate on what’s going on with that? Can you give us assurances that the IRS is not targeting particular groups based on political leanings?”

Shulman didn’t beat around the bush in his response. He explicitly denied that the IRS was targeting specific groups.

“[L]et me start by saying, yes, I can give you assurances,” Shulman said in response. “As you know, we pride ourselves on being a non-political, non-partisan organization. I am the only — me and our chief counsel — are the only presidential appointees, and I have a five-year term that runs through presidential elections, just so we will have none of that kind of political intervention in things that we do.”

Shulman essentially blamed the organizations. He claimed that those complaining about targeting by the IRS were were in the “application process” and had come to the agency “voluntarily.”

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