Hamill: If the IRS fails, we should know why

Among other activities, I teach college students. It may sound trite, but teaching is one way of staying young.

I remember when I was a student. I remember my first professional job, which was also my first job in an office and the first job wearing a suit and tie.

It was a long time ago, but it doesn’t seem that way. Today’s graduates seldom wear suits. Other changes may be even more profound.

When I started in tax practice the IRS had more employees than it now has. Fewer tax returns filed, but more employees.

The IRS was supposed to get more resources from the Inflation Reduction Act, or IRA. The funding was phased in and planned employment growth was also phased.

Expected retirements over the hiring term would mean little overall growth. But the IRS developed a strategic operating plan to target hiring to its greatest needs.

Since the passage of IRA, the funding has been scaled back and may disappear. A hiring freeze went into effect Jan. 20. Anyone who accepted a job before noon that day and did not start by Feb. 8 had their offer rescinded.

Many of the new hires were planned to replace others who were leaving — not necessarily retirements, but skilled workers with other opportunities.

A hiring freeze is indiscriminate. A plan to limit new hires to one for every four retirements is indiscriminate.

This is no way to run a railroad.

Any employer, federal or otherwise, hires for specific needs. Employers try their hardest to retain their most valued employees. IRS employees are concerned. As a tax adviser I am concerned.

The integrity of the U.S. tax system is at risk. Some of the matters I mention are currently in courts. Others may spur Congress into action.

In my career this is a watershed moment. A lack of IRS resources and personnel has led to sloppy professional work by many tax preparers.

The late folk singer Kate Wolf wrote, “It’s gone away in yesterday, now I find myself on the mountainside, where the rivers change direction, across the great divide.”

In the Americas, the great divide separates the waters that flow west to the Pacific from those that flow east to the Atlantic.

I have a daughter who lives in Montana, where the divide splits the Bitterroot Mountains, Glacier National Park and Yellowstone National Park.

Our tax system today rests on a mountain across a great divide. An older world where both tax authorities and advisers had training and resources. A newer world where the legislative branch of the government targets the agency that collects the fuel that keeps the government running.

With the concerns expressed about the current, and coming, budget deficits, the legislative branch should scream drill, baby, drill! That is, write the laws to fit your policies, but give the agency that enforces those laws the fracking energies needed to enforce the laws.

A hiring freeze is not an answer, particularly when 18% of the IRS workforce is currently eligible for retirement. It was recently announced that 5,000 IRS workers accepted the deferred resignation offer.

Like other agencies, the IRS has been asked to prepare a plan to reduce the workforce by half. No planning has gone into the type of worker the agency needs to do its job.

If you fail to plan, you plan to fail.

The attorneys that write tax regulations and litigate tax cases on behalf of the government are among the group that had job offers revoked.

I do believe that in time we will see the need for effective tax administration. It is said, “It’s always darkest before the dawn.” Others say, no, it is not darkest before the dawn. The sky gradually lightens until dawn appears.

Wolf said, “The finest hour that I have seen, is the one that comes between, the edge of night and the break of day, it’s when the darkness rolls away.”

Disrespect of a law simply because it raises revenues is how the sentiments of a growing number of Americans undermines the integrity of our tax system.

It is not the way things always were. Not how the public viewed the law when I started in tax practice.

Perhaps the view from the mountain that we now stand on can encourage us to lighten up on the attacks on our own laws.

Our people face a great divide. Let’s hope we’re close to the break of a day when the tax enforcement waters can once again change direction.