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Washington Alert – IRS Commissioner won’t resign; Court threatens IRS with contempt if documents are not produced; GAO Report critical of IRS oversight of individual shared responsibility and the premium tax credit

IRS Commissioner John Koskinen used a July 29 visit to Capitol Hill to make clear that he has no intention of resigning despite calls from Republicans on the House Oversight and Government Reform Committee for his immediate departure. On July 27, 21 GOP members of the panel sent a letter to President Barack Obama requesting him to remove Koskinen from his position. The commissioner, responding to reporters’ questions after testifying before a Senate subcommittee, made clear that he still has more than two years to go before the end of his term and there is a lot of work still to be done. Meanwhile, the White House voiced the president’s support for the embattled IRS chief. “His decades of experience turning around both public and private institutions continue to make him the right person to lead this agency,” Eric Schultz, White House principal deputy press secretary, said on July 29. In addition, a senior Democrat in the Senate said during a press conference that he is not inclined to see Koskinen leave his job. “I haven’t seen evidence that he should resign myself,” said Sen. Charles Schumer (D-NY). The letter to President Obama can be accessed at oversight.house.gov/wp-content/uploads/2015/07/2015-07-27-JC-to-Obama-WH-Koskinen-Resignation.pdf

During a July 29 status hearing on a Freedom of Information Act lawsuit filed by Judicial Watch, a federal judge warned that IRS Commissioner John Koskinen and Justice Department (DOJ) attorneys could face contempt of court charges if the agency fails to produce periodic status reports and newly recovered emails of Lois Lerner, former director of IRS Exempt Organizations. Judge Emmet Sullivan of the U.S. District Court for the District of Columbia said that the reasons IRS and DOJ gave for not complying with his July 1 oral order were “indefensible, ridiculous and absurd.” In the event of future disregard of his orders, Judge Sullivan said he will “haul into court the IRS commissioner to hold him personally in contempt.” The judge also issued a minute order on July 29 which reads, in part: “[I]n the event of non-compliance with future Court orders, the Commissioner of the IRS and others shall be directed to show cause as to why they should not be held in contempt of Court. The Court’s July 1, 2015, ruling from the bench stands: (1) the Government shall produce relevant documents every Monday; (2) the Government’s document production shall be accompanied by a status report that indicates (a) whether TIGTA [Treasury Inspector General for Tax Administration] has turned over any new documents to the IRS, (b) if so, the number of documents, and (c) a timeframe for the IRS’s production of those documents.”

The Government Accountability Office (GAO), in a report released on July 29, has called on IRS to improve its oversight of two key Affordable Care Act provisions – individual shared responsibility and the premium tax credit. (GAO-15-540) According to GAO, problems surfaced this past January when incomplete and delayed marketplace data limited the agency’s ability to be able to match taxpayer premium tax credit claims prior to the first returns arriving at IRS. As of March 21, IRS had complete data available for verification of taxpayer credit claims for just four of 51 marketplace jurisdictions (50 states and the District of Columbia). “IRS does not know whether these challenges are a single year or an ongoing problem,” the report said. Furthermore, this situation means IRS does not know the total amount of advance premium tax credit payments made to insurers for 2014 marketplace policies and the correct amount of credit taxpayers should have reported on their 2014 tax returns. “Thus, IRS does not know the size of the gap between advance premium tax credit paid and reported or the extent of noncompliance with the requirement for recipients of advance premium tax credit payments to accurately report those payments on their tax return, a measure that could help IRS assess the effectiveness of its education, outreach, and compliance efforts,” GAO said. The report is available atgao.gov/assets/680/671708.pdf

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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