The IRS has been under pressure recently from privacy concerns and accountability issues with internal spending. The Obama administration has taken action in removing the IRS commissioner that will be reviewing how the agency operates in the future. What are taxpayers to make of these changes going forward?
Privacy concerns with the IRS reviewing taxpayer emails
Recently, the ACLU provided the public with documents clearly indicating that the IRS can review taxpayer emails without notice or a warrant. Specifically, the documents cite that the Fourth Amendment does not protect emails because Internet users “do not have a reasonable expectation of privacy in such communications.” The IRS responded by releasing a statement indicating that for criminal investigations, the agency obtains a search warrant prior to requesting that an internet service provider allow access to the taxpayer’s emails.
The IRS is also under pressure after it was revealed that the agency targeted specific tea party interest groups.
Internal spending problem with the IRS
The privacy concerns are just the tip of the iceberg. A House oversight hearing recently revealed that the IRS spent over $50 million dollars on conferences from 2010 to 2012 on lavish accommodations and expensive team building exercises. In addition, during the hearing the committee requested supporting expense documentation for all the monies spent during the conferences that the IRS wasn’t able to provide. The irony here is that the IRS requires taxpayers to provide supporting documentation for expenses, yet they failed to do the same for their own internally held conferences.
Changes ahead for the IRS
The Obama administration’s budget set forth to increase funding for the IRS to oversee the new healthcare law and offshore tax avoidance. However, the new IRS commission is taking full responsibility for the spending and publicity issues and is not planning on using the additional funding at this time. Rather, he has plans to change management throughout the agency. We believe this is a good sign for taxpayers going forward. The number of in-person audits will likely decrease as the IRS needs to focus more on efficient methods of reviewing taxpayer files. Expect more paper audits via mail as the agency transitions.
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