House GOP floats comprehensive revamp of the IRS in its tax reform blueprint

By Bernie Becker

It's sort of flown under the radar in the coverage, but the House GOP also floated a pretty comprehensive revamp of the IRS in its tax reform blueprint. The overhaul's contingent on a vastly simplified tax code, but would set up an IRS with three separate service areas - one for individuals, one for businesses and a sort of independent small claims court to more quickly settle disputes. The IRS administrator - no commissioner anymore - would serve no more than two three-year terms, and House Republicans also suggested that they wanted to tighten the IRS's jurisdiction and keep them more focused on tax administration and collection.

Floyd Williams of Public Strategies Washington, who was director of legislative affairs at the IRS for 16 years, told Morning Tax that there was good and bad among the proposed GOP changes. Among the good: giving the IRS less to do. "The IRS hasn't asked to be put in the middle of health, education and energy policy, where it has been an arbiter for some time," Williams said.

Williams was less fond of the idea of giving IRS chiefs shorter terms, saying the current five-year setup gives commissioners more independence by allowing their term to overlap with presidential elections, and maintained that he isn't sure that a new system is needed for settling disputes. But broadly speaking, Williams said it's hard to grade the IRS's plans in a vacuum, when the streamlined tax code it's supposed to be paired with is a hypothetical and without knowing how much funding the IRS would get to implement its new system. (The House GOP framework talks about a modern technology system for the agency, while the current brass describes the IRS's IT as decidedly 20th century.) "It's tough to judge," Williams said. "You take it as complementary of the blueprint, and there's still some uncertainty there."