Rebuilding Public's Trust in IRS Top of Mind for Koskinen

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By Jason Bramwell, Staff Writer

During his confirmation hearing before members of the Senate Finance Committee on December 10, John Koskinen pledged that if he is confirmed as the next commissioner of the IRS, he would make the tax agency "the most effective, admired, and well-run agency in government."

The retired Koskinen was tapped by President Obama in August to head the IRS because of his ability to lead an organization out of a crisis. During his tenure at Freddie Mac, from 2008 to 2011, he helped the mortgage finance company dig out of a financial crisis after it was seized by the government in September 2008.

The IRS has been under fire for its role in improperly scrutinizing the federal tax-exempt status of conservative groups like the Tea Party as well as engaging in excessive spending at training conferences. This led to the May ouster of Steven Miller, the acting IRS commissioner who was at the helm of the agency when it apologized for the way it handled Tea Party groups' applications. Daniel Werfel, controller of the US Office of Management and Budget, has led the IRS on an interim basis since late May.

Senator Orrin Hatch (R-UT), ranking member of the Senate Finance Committee, told Koskinen during the hearing it is vital that the IRS maintain its credibility.

"The American people should be able to trust that the IRS will enforce our nation's tax laws without bias or prejudice. Any hint of impropriety on the part of the IRS or its leadership damages its credibility and that of our entire government", said Hatch, who added that he expects Koskinen will be confirmed. "Unfortunately, over the last few years, the credibility of the IRS has been eroded through actions taken by the IRS itself, and the agency has, in large part, lost the trust of the American people."

During his opening remarks at the hearing, Koskinen told Hatch and Senate Finance Committee Chairman Max Baucus (D-MT) that in every area of the IRS, taxpayers "need to be confident that they will be treated fairly, no matter what their background or affiliations. Public trust is the IRS's most important and valuable asset."

Koskinen added that with 95,000 employees and the range of challenges the IRS faces, mistakes will occur.

"My commitment, if confirmed as commissioner, is that we will work to have no mistakes", the seventy-four-year-old Koskinen said. "The realistic goal is to find problems quickly, fix them promptly, make sure they stay fixed, and be transparent about the entire process."

Koskinen also told Hatch and Baucus that large organizations must involve people – both internally and externally – in discussions about what the problems are and how they can be corrected.

"My experience has always been a group of people addressing a problem will always come up with a better solution than any single member of that group", he said. "It's important to have as many different perspectives on a possible solution as you can."

Koskinen also told lawmakers that the funding problem facing the IRS needs to be solved.

"As a [Treasury Inspector General for Tax Administration] report earlier this fall noted, the government has saved a billion dollars in cuts to the IRS budget on an annual basis and lost $8 billion in compliance revenues." 

Koskinen concluded his remarks by saying he is excited about the possibility of turning around the IRS.

"The IRS has a long and honored tradition of service to this country, and it is filled with a great number of public servants who take pride in their work that help the IRS achieve its mission with integrity and fairness to all", he said.

It is expected that Koskinen will be confirmed as the next commissioner of the IRS because the Democratic-led Senate voted in November for a rule change that strips Republicans of their ability to block President Obama's judicial and executive branch nominees, Reutersreported. If confirmed, Koskinen's term would expire in November 2017.

The December 10 Senate confirmation hearing was cut short because, according to Baucus, the Republican party objected, under Senate rules, for the Senate Finance Committee to meet two hours after the Senate convened, thus the hearing could not extend past noon ET. The hearing, which began at 9 a.m. ET, was interrupted by votes on the Senate floor, which caused a lengthy recess.

According to published reports, Koskinen's confirmation hearing will resume on December 11.

Koskinen, who also served as acting CEO of Freddie Mac in 2009, was president of the US Soccer Foundation from 2004 to 2008. Prior to that, he was the deputy mayor and chief administrator of the District of Columbia from 2000 to 2003, and the assistant to President Clinton and chair of the President's Council on Year 2000 Conversion from 1998 to 2000. Koskinen served as the Office of Management and Budget's deputy director for management from 1994 to 1997.

In the private sector, Koskinen spent twenty-one years at management consulting firm Palmieri Company, serving in a number of leadership positions, including CEO and chairman, president, and vice president.

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