During the IRS and Tax Court shutdown, we have less material to work with and more time for observations and reminiscences from readers. Chronic contributor Bob Kamman assures us that there must be others who can do better than this.
I have stories about shutdowns that I could tell from my time at the government but mostly my impression of shutdowns is that they are an incredible waste. I feel it would not take much to find a better way to fight over disagreements about the budget.
Bob tells us a story about barriers and Service Centers. Having been at several Service Centers, I can say that the barriers to entry there pale by comparison to entry to the Martinsburg Computing Center where the IRS stores the masterfile information and creates significant barriers to entry. Keith
Before I get to that story, here is something to watch for when this “partial government shutdown” finally ends.
In November 1995, the IRS was shut down for only four days. Some of the rest of the government then closed again for 22 days, when negotiations between President Clinton and Speaker Gingrich failed, but IRS was spared.
The White House was not reluctant to place blame on Congress, so it released a report showing how much tax was not assessed or collected during the brief furlough of examination and collection employees. The Treasury Department calculated that $400 million was lost by lack of enforcement action by IRS over a four-day period. That round number of $100 million a day translates to $165 million in today’s dollars, or about a billion dollars for every six working days.
This estimate was confirmed in a White House report on the costs of the October 2013 federal government shutdown. “IRS enforcement and other program integrity measures were halted,” it stated. “IRS was unable to conduct most enforcement activities during the shutdown, which normally collect about $1 billion per week.” (Emphasis in original.)
read more...Will similar numbers be provided this time? Or maybe there will be a compromise. Most federal budget analysts agree that every dollar IRS spends on enforcement brings in about $10 of revenue. The Democrats have offered $1.6 billion for border security. The President could refuse such a large sum. “Just give me $500 million more for IRS,” he could say. “Then let me spend the $5 billion it produces, how I want.”
(Much of that half billion would be paid in salaries and come back to the government anyway. IRS employees are notorious for paying their income taxes.)
But the current impasse reminds me of my IRS days, in the mid-1970s, when I was an intern in the National Office’s Taxpayer Service division. Interns were not unpaid college students brought in for the summer (like my son in 2003, at the White House photo office). We were full-time permanent employees, recruited nationally for training that would create the next generation of IRS leadership. The assignment lasted for a year, followed by placement in some essential program.
There were only three of us in Taxpayer Service, but there were more than 20 “Admin” interns who rotated among what were then the four divisions of the Administration function (if I remember them correctly): Personnel; Facilities Management; Training; and Fiscal.
There were occasional “classes” for interns when senior executives would lead discussions of IRS problems and how they had been solved. When it was the turn for Facilities Management, the topic for discussion was whether a rather large sum should be spent to build fences around Service Centers.
I doubt any of us had ever considered this question. Service Centers are huge buildings on large parcels of real estate. For example, the one in Ogden, Utah, is a single-story brick building with 504,741 gross square feet located on a 60-acre site. It operates 24 hours a day, 7 days a week, and provides work space for approximately 2,500 federal employees.
That would require a lot of chain link, we agreed. Of course, security is an important issue for all government buildings, but especially IRS work locations. Who would argue with fencing them off?
But fences are meant either to keep people in (not an issue at IRS) or to keep people out. So whom were we trying to exclude?
This was before daily headlines about terrorist threats. But there have always been angry taxpayers, including some with mental-health issues. And by then the “Anarchist Cookbook” had instructions for building bombs. So fences were necessary.
Or were they? The class was asked to imagine a potential bomber driving past the Service Center, noticing a fence around it, and therefore deciding it was not worth the effort to penetrate. If this person existed, then the cost of the fence would justify discouraging the “casual bomber.” But of course, someone intent on bombing IRS could probably figure out a way to get over, under, around or through that fence.
The point was: The fence is not there for security. It is there to create the appearance of security. The otherwise-determined bomber, it was hoped, would decide that “if there is that much security on the perimeter, there must be a lot more of it inside.” So according to the cost/benefit analysis of the day, the fences were built and the contractors paid.
This anecdote may have nothing to do with current affairs, but for me there are always reminders. For example, I thought of it when I saw this April 2018 story about what happened to a fence at the Fresno Service Center – which, however, was breached from the inside out.
And, Bob, don’t forget about the dude who flew the airplane into the Austin Service Center: https://en.wikipedia.org/wiki/2010_Austin_suicide_attack. Fences did not matter then.
Well, technically, that was just another IRS office, it wasn’t what is now called the “Submission Processing Center.” That massive warehouse is on the I-35 frontage road. The Google street view shows several overhead ramps from which it would be easy these days to launch drones. But let’s not even talk about that.
“Having been at several Service Centers, I can say that the barriers to entry there pale by comparison to entry to the Martinsburg Computing Center where the IRS stores the masterfile information and creates significant barriers to entry.”
Yet criminals are allowed in, and do damage from the inside out. Why did Congress need to enact a law prohibiting the IRS from rehiring former employees who had been fired for committing crimes? Why did the IRS violate the law after it was passed?
When an IRS file shows a return being filed and later shows no return on file, was the unfiling performed by a hacker, a terrorist, or an IRS employee? When another IRS file omits both the original timely filing and subsequent unfiling, was the unfiling of records performed by a hacker, a terrorist, or an IRS employee? When the IRS tells Tax Court that a person did not file returns at all for particular years, after the person had a previous Tax Court case for alleged defects in those returns and had to buy a visa to enter the US (where there was security) to attend Tax Court, wow it’s a good thing those mainframes are protected.
(Off-topic: Someone once posted a photo of a 1970’s era mainframe to criticize and laugh at the IRS. I answered that despite all the things the IRS deserves criticism for, that was not one. I’m sure the IRS uses 2010’s era mainframes now. Why didn’t the critic post a photo of a PC made in 1982 too?)
Tax offices in Japan have walls around them, as do most government buildings, private factories, private homes, etc. There are guards at entrances who probably are not armed. At some government buildings and most private factories visitors have to sign in, but at tax offices we don’t have to sign in. Though at data centres I’d expect to have to sign in.
When I lived in Canada tax offices and other government buildings didn’t have walls around them, tax offices didn’t have guards, and we didn’t have to sign in, though I don’t know if it’s the same now. More telling than that though, is the time they audited me. The auditor came to my apartment, asked a few questions, I answered, and there was no problem. Finally I thought I figured out the reason for the audit, so I asked one question, the auditor answered, and I explained that I had been declaring each year’s accrual of interest even though the payer only issued a single T-5 at the end of the fifth year. The auditor suggested I put a note in future returns, we thanked each other politely and the auditor left. We had both sat at chairs next to the table at one end of the living room in my apartment. I did not think anything special about it at the time. But years later I wondered: How could Revenue Canada send a small, young, female auditor alone, unaccompanied, to the apartment of a larger, young (at the time), male taxpayer?
There sure is something different about the IRS.
“The Democrats have offered $1.6 billion for border security.”
How much did the Republicans offer? Remember, this shutdown started when Republicans controlled both houses of Congress, the White House, and the courts.
After submitting my earlier comment, I had occasion to visit the nearest tax office in Japan. There were no guards today. It’s not filing season yet and maybe I was the only one submitting a return this early. Still, it was a surprise to see no guards at all. I walked my bicycle up the ramp and parked it, walked into the office, talked with the employee across the counter, set documents on the counter and exchanged documents across the counter.
There used to be more security just to enter an airport with our luggage, though in recent years there hasn’t been. Even to go to the police department to pick up certificates of no criminal record, there was more security. Taxes, no problem.