IRS head says agency to focus efforts on enforcement

IRS Commissioner Douglas Shulman Friday warned that his agency will continue to ratchet up enforcement efforts now that it has cleaned up its customer services programs under the landmark 1998 law requiring the restructuring of IRS operations.

Shulman, who started his five-year term in March, said he believed it was incumbent on the IRS to "refocus" on enforcement actions and work to maintain the traditional balance between them and its service operations.

"We cannot afford to let our enforcement program diminish," he said at a Capitol Hill forum on the legacy of the 1998 legislation.

Shulman, the former staff director of the bipartisan commission whose recommendations formed the substance of the bill, said it was the IRS' job was to "bring in $2.7 trillion a year to fund the government" and that "whole system is based on your neighbor paying their fair share."

He noted that "there are some taxpayers who don't want to meet their obligations to their fellow citizens."

Shulman's assessment of IRS priorities was backed up by former Rep. Rob Portman, R-Ohio, who co-chaired the IRS structuring commission. Portman, who served as OMB director and U.S. Trade Representative after leaving Congress in 2005, said he and other observers were "concerned" when IRS enforcement lagged earlier in the current decade as agency transferred resources away from audits and collection efforts and into service improvement initiatives. He said the IRS seemed to have begun a "rebalancing" over the last several years, but added, "I think the right balance is in the eye of the beholder."

Shulman said the IRS has largely met the goals of the 1998 measure, which required the agency to shed its geographic-based structure to adopt one consisting of operations serving four groups -- individuals, small businesses, larger businesses, and tax-exempt entities.

As a result of the reorganization, the IRS has become the international "gold standard" for tax administration, Schulman said. "I think we can all agree that the IRS is a very competent agency," he declared. Shulman cited figures indicating that the agency now responds quickly to taxpayer inquiries with an information accuracy rate of over 90 percent. He said its Web site received 215 million hits last year and was among the world's busiest. Shulman said one of his ambitions as commissioner was to establish "seamless" coordination among the agency units. He said he would also work to improve the agency's employee retention and recruitment efforts. "There are a lot of people [at the IRS] who can walk out today and double and triple their salaries," he explained.