On June 24th, IRS Principal Deputy Commissioner Danny Werfel issued a report outlining initial findings within the IRS’ review of problems delaying the approval of Tea Party related tax-exempt applications. The scope of the review included accountability for what went wrong, fixing the problems within the Tax Exempt Status application process, and conducting a broad review of other IRS operations. This 83 page report served as a 30 day update into their investigation stemming from mismanagement described by the Treasury Inspector General for Tax Administration (TIGTA).Comments and observations in the report worth noting: | ||
All five key executive management positions in the chain of command responsible for the review and approval of tax-exempt applications have been replaced. | ||
The initial IRS review shows no signs of intentional wrongdoing by IRS personnel. | ||
To date, there appears to be no involvement by parties outside the IRS involved in the mismanagement or misjudgment issues. | ||
There is introduction of a voluntary fast-track approval process for pending tax-exempt entity applications (section 501(c)(4)). | ||
The IRS suspended the use of their “BOLO” process for tax-exempt applications. This “be-on the-lookout” process is where key terms and other items identify areas of IRS focus. |
What’s happening next
The 30 day update report from the IRS stresses this is the starting point for a broad pursuit of reform at the IRS. The report discusses the need for:
Simplified tax code. The complexity of the code, the vast increase in code, and the lateness of law changes have challenged the operational effectiveness of the IRS. | |
Better understanding of the National Taxpayer Advocate. There is a concern that most are not aware of this taxpayer service to help solve problems. | |
Establishing an Enterprise Risk Management Program. The purpose is to try to pro-actively identify problems within the IRS and fix them on a more timely basis. | |
Increased Transparency Commitment. With new checks and balances, the service is committing to focus on better transparency of IRS operations. |
More will be forthcoming as the review continues and changes are implemented within the IRS.