IRS ‘Mismanagement’ Hearing Breaks Along Partisan Lines

Internal Revenue Commissioner John Koskinen’s five-year appointment ends next month, and Republicans on the House Oversight and Government Reform Committee on Wednesday could hardly contain their pleasure.

“The only good news is that one element in this long sad chapter of John Koskinen as commissioner is coming to an end in two and a half weeks,” said Jim Jordan, R-Ohio, wielding the gavel for the hearing on “Ongoing Management Challenges at the IRS.”

Rep. Jody Hice, R-Ga., added, “I join in celebrating the fact that Mr. Koskinen is leaving in a few days and hope that the tarnished agency he leaves behind will finally get a leader that can correct the problem of mismanagement.”

Rep. Mark Meadows, R-N.C., cited a need to address the tax agency’s record of rehiring former employees with tax debts or misconduct issues, its decision to continue a cybersecurity contract with credit reporting agency Equifax in the wake of the company’s massive data breach, and the agency’s famously outdated information technology systems, some of which date to the 1960s.

"Obviously, we will end up with a new IRS commissioner in the coming days and as we look at that, it is critically important that we set the stage for making sure that we address these issues,” Meadows added.

Koskinen, commissioner since December 2013, was appointed by President Obama following a political firestorm over alleged political bias in how the IRS handled nonprofits applying for tax-exempt status. Democrats and Republicans on the committee continue to dispute whether the agency unfairly targeted some conservative groups for extra scrutiny, and Republicans still hold Koskinen responsible, as Jordan reiterated on Wednesday, for snafus in the agency’s efforts to produce emails sought by Congress related to the scandal.

The IRS “has been a mess and remains a mess,” Jordan said, though several Republicans acknowledged, as Meadows put it, that the “vast majority of employees are excellent workers and trying to do a good job for the American people.”

Responding to the criticisms fell to Jeffrey Tribiano, the IRS’s deputy commissioner for operations support. The problem of rehiring bad actors—some 215 past employees slated for termination—was the subject of two recent inspector general audits, and the agency has implemented recommendations from auditors, he said. The hiring push involves temporaries in the run-up to filing season, as well special accelerated procedures to attract some technical people with skill in areas such as cybersecurity, who command higher salaries.

“There are rules we have to follow to meet the Office of Personnel Management’s suitability” procedures, he said. That means even if a prospect’s file has a “Do Not Hire” label, the passage of time can renew the candidate’s eligibility. The agency is working with OPM, Tribiano added, on obtaining debarment authority that would enhance the power to reject candidates who owe back taxes or who were absent without leave.

Given an IRS budget that has shrunk by 20 percent since 2010, “our prioritization is first to make sure we deliver a successful filing season,” Tribiano said. Legislative mandates and special projects, such as enhancing cybersecurity and modernizing information technology, are necessarily lesser priorities, he said.

But Rep. Mark Sanford, R-S.C., pushed back. “Rehiring is fundamentally a management decision, not a capacity decision.”

J. Russell George, the Treasury Inspector General for Tax Administration, said “it’s a bad decision to rehire 400 or 1” problematic past employees, but he also defended the IRS’s need for experienced employees.

Tribiano also explained why the IRS initially renewed its contract with Equifax days after news of the Equifax breach broke on Sept. 7. The company, which was the agency’s incumbent contractor, had launched a bid protest with the Government Accountability Office after losing the contract to competitor Experion. Equifax was simply given a short-term bridge contract pending the bid protest resolution, he said.

Rep. Raja Krishnamoorthi, D-Ill, faulted the agency for being slow in delivering tax information to investigators from other agencies performing background checks for security clearances, delays Trabiano attributed in part to budget cuts.

Rep. Gerry Connolly, D-Va., criticized Republicans for denying the relationship between resources and operational capacity at the agency. IRS’s outdated computer systems represent “a catastrophe waiting to happen,” he said.