We believe the problems with the IRS, stemming from the tax-exempt organizations division, are just beginning.

This reminds us of the Congressional Hearings of the late 1990’s, when hapless victims of aggressive IRS collection procedures were paraded up Capitol Hill to testify.  Albeit, the stories were scary, and procedures were put into place to keep that type of aggressive IRS collection behavior from occurring.

For about a year after those hearings, we think it’s safe to say the IRS was afraid to implement collection procedures against anyone, at all.  If the word “harass” was used against a revenue officer, the consequences to that officer could be dire.  Therefore, they followed the old adage, “the best way to avoid a problem is to not be there!”

Well, that went too far.  The IRS couldn’t do anything, which doesn’t help them enforce the tax laws by any stretch of the imagination.  In all honesty, without the threat of collection procedures, they’d never get paid.  So things got back on track a couple of years after those hearings, and continued, in my humble opinion, to slowly become increasingly aggressive…and here we are.

Now, this writer, as a practitioner, wasn’t expecting this disaster for the IRS.  Lois Lerner is a alumni of my law school, and I’ve always wanted to meet her.  The media has now made her the poster child for IRS gestapo-like behavior in the tax-exempt sphere, and frankly, she has done and said some dumb stuff.  Everyone reading this must now realize that she is in the center of a firestorm by which the IRS targeted “tea party” or other right leaning exempt status applications with relentless intrusive questionning and extremely slow processing. In the “what she has done” category, let’s consider she admittedly (Commissioner Miller’s testimony) planted a question to “out” the issue, after neglecting to tell Congress at a hearing two days prior.  In the “what she has said” category,  “I am the IRS,” or “I own them” (i.e., referring to her staff), aren’t exactly quotes that warrant a warm fuzzy feeling, not only from taxpayers, but the IRS employees who report to her.  And lest we forget “I am not good at math.” Indeed.  I regret to predict I think Lois is cooked.

The IRS currently has much more than a PR problem.  The IRS is on the roof, and the neighbor’s kids took the ladder – there is no where to go.

Because of this momentum, we don’t think these inquiries are limited to the tax exempt division.  We believe this will open up a pandora’s box of alleged aggressive behavior by the IRS, and in its wake, more Congressional hearings.  The pendulum has had nearly 15 years to swing, and this practitioner thinks its time to take a fresh look at the current policies and procedures in place at the IRS.  And then the pendulum shall swing again.