Conservatives in Congress urge shutdown of IRS

WASHINGTON (Reuters) - It’s a U.S. taxpayer’s dream: make the Internal Revenue Service go away, and the largest conservative group in Congress is endorsing just that.

A general view of the U.S. Internal Revenue Service (IRS) building in Washington May 27, 2015. REUTERS/Jonathan Ernst

The Republican Study Committee, which counts over two-thirds of House of Representatives Republicans as its members, called recently for “the complete elimination of the IRS.”

The committee’s support for this idea, once confined to the fringes of conservative ideology, suggests it is more widely accepted on Capitol Hill than ever. But many in Washington, including some Republicans, have trouble taking it seriously.

Calls to abolish the IRS have not been well thought through, Republican Representative Charles Boustany said in an interview.

“Before we start making blanket statements about abolishing the IRS, I think it’s important to focus on what the tax code for the 21st century should look like,” said Boustany, who does not belong to the 172-member study committee.

In an election year of dramatic rhetoric that is often short on details, the committee’s proposal, released April 22 and echoing language from a March budget plan, is brief.

As part of a wider appeal for federal tax reform, the committee says simply: “This proposal takes the bold step of calling for the complete elimination of the IRS. Tax collection and enforcement activities would be moved to a new, smaller and more accountable department at the Treasury.”

No further specifics were offered for how to replace an agency that is already part of the Treasury, collected $3.3 trillion in revenue in 2015 and processed 240 million tax returns.

Texas Representative Bill Flores, chairman of the study committee, was not available for comment. His spokeswoman Caitlin Carroll said the IRS closure proposal should be seen as part of a larger push for comprehensive tax reform.

Matthew Gardner, head of the Institute on Taxation and Economic Policy, a tax research group, said most tax reform plans would still need a tax collector with enforcement powers.

“It’s hard to imagine a situation in which we wouldn’t need a sophisticated tax collection and enforcement capacity,” he said.

“We are in an election year, and bashing the IRS is particularly attractive in an election year,” said Steven Rosenthal, senior fellow at the Tax Policy Center think-tank.

From a global perspective, the IRS does a good job, he said, noting that U.S. income tax compliance is about 82 percent, one of the highest levels in the world.

Still, in the United States, antipathy for the IRS is widespread and long-standing. One of Republican presidential candidate Ted Cruz’s biggest applause lines on the campaign trail is, “Imagine abolishing the IRS!”


Asked recently about Cruz’s line and calls to close the agency, IRS Commissioner John Koskinen said: “If you want to call it something other than the IRS and that makes you feel better, that’s OK with me. But ultimately you got to have somebody somewhere who collects the information, audits it and makes sure it’s accurate and valid and collects the funding.”

Cruz’s tax plan, unveiled in November, would create a flat 10 percent individual income tax and junk the present tax brackets. High-income households would benefit the most under his plan, according to the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution.

Some Democrats scoff at the IRS closure proposal. “If there are problems at the IRS ... we can straighten it out,” said Democratic Representative Elijah Cummings. He added that Republicans should be wary of advocating an idea that “sounds Trumpish.”

Donald Trump, the anti-establishment front-runner for the Republican presidential nomination, has not called for abolition of the IRS.

Congress has cut the IRS’ budget 17 percent in real terms since 2010. In mid-April, the House approved several IRS-bashing bills, including one to prevent it from making new hires until the Treasury certifies no agency employees are seriously delinquent on taxes themselves.

That bill and another one that would prevent the IRS from spending user fees it collects without congressional approval have been placed on the Senate calendar by Republican Leader Mitch McConnell. This means they can be brought up for debate and a vote, although no action has been set on either proposal.

The IRS has long been a congressional punching bag. But Republicans have been hitting it harder since the IRS several years ago applied extra scrutiny to conservative groups’ applications for tax-exempt status between 2010 and 2012.

Republican Representative Rob Woodall of Georgia has introduced a bill every year since he entered Congress in 2011 to eliminate income taxes and abolish the IRS.

Support for Woodall’s bill has grown to 73 co-sponsors, including the heads of the House tax and budget committees, but it has never advanced. Nor has a similar bill in the Senate.

It was unclear how House Speaker Paul Ryan would treat the study committee’s proposal in drafting a party policy agenda ahead of the Republican convention in Cleveland in July.

“The speaker welcomes input from the RSC and all members of our conference,” said Ryan spokeswoman AshLee Strong. Ryan has sidestepped calls for abolishing the IRS in the past, while frequently criticizing the agency.

Editing by Kevin Drawbaugh, David Gregorio and Dan Grebler