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I.R.S. Fights Back Against House Republicans’ Attacks

Speaker Paul D. Ryan, who has derided the tax code and the agency charged with enforcing it.Credit...Zach Gibson/The New York Times

WASHINGTON — For five years, congressional Republicans have taken out their anti-tax wrath on the Internal Revenue Service, cutting its budget by nearly $1 billion, reducing its staff by about 17,000, and even threatening to impeach its chief.

Now they say no one at the agency receives a bonus until customer service improves. And that measure, which the Republican-controlled House easily passed Thursday, was just one of six anti-I.R.S. measures that it approved this week, mostly by party-line votes, to mark the annual tax-filing deadline.

To supporters of the agency — and there are some — years of such attacks have yielded exactly what Republicans seemed to want: a depleted, defanged tax collector.

“I’m appalled, that’s all I can say,” said Lawrence B. Gibbs, a tax lawyer at Miller & Chevalier who joined the I.R.S. during the Nixon administration and was President Ronald Reagan’s choice for commissioner in 1986. “It’s fine to demonize the I.R.S. It has always been a target. Listen, that goes with the job.”

But, he added, given the nation’s challenges, “the one thing people ought to agree on is that we should have a revenue system that works and works well.”

“And if we’re going to create a disrespect for our tax revenue system,” he continued, “I look at it and say I just don’t think it’s in our country’s best interest.”

House Republicans even gave this week a name, “I.R.S. Week,” though the lines of attack began last week, and were many. In debate, multiple hearings (the I.R.S. commissioner, John Koskinen, testified four times over eight days), news conferences and commentary in the news media, the agency even got the blame for the hated tax code, which Congress writes and Republicans have promised for five years to rewrite and simplify.

“Right now, we have a tax code that no one can understand being enforced by an agency that no one trusts,” said Speaker Paul D. Ryan, Republican of Wisconsin, who was the chairman of the tax-writing Ways and Means Committee before taking the House’s top job last fall.

As certain as death and taxes, tax season political attacks on the I.R.S. go back decades. But in recent years, the intensity has grown and the agency’s funding in turn shrank more than any other time in memory. The campaign gained strength in 2013, when Republicans seized on management failures to allege that I.R.S. employees had singled out conservative groups for greater scrutiny and delays in reviewing their applications for tax-exempt status as “social welfare” organizations, though liberal-leaning groups were examined as well, investigations showed.

The assaults and especially the funding cuts have reached a point that the agency’s defenders are speaking out.

“The Congress on one hand adds complexity to the tax system by the tax laws they enact but will not recognize the costs and administrative burdens placed on the agency to carry out the laws it passes,” said G. William Hoagland, who was a senior budget adviser to Senate Republican leaders for more a quarter-century.

Through the 1980s and 1990s, Mr. Hoagland said, Congress approved deficit-reduction measures that routinely included increases for the I.R.S. as a way to raise revenue: Analyses show that the agency collects at least $4 for every $1 it spends for tax compliance.

Late last year, Congress grudgingly gave the I.R.S. an increase, though still far less than it sought. In advance of that action, seven former I.R.S. commissioners including Mr. Gibbs — representing three Republican and three Democratic administrations — wrote to congressional leaders of their concern.

“Over the last 50 years, none of us has ever witnessed anything like what has happened to the I.R.S. appropriations over the last five years and the impact these appropriations are having on our tax system,” they wrote.

Federal reports document the impact. Tax audits are at the lowest level in a decade, affecting fewer than 1 percent of taxpayers. Reduced efforts to enforce compliance cost an estimated $6 billion in uncollected revenues in 2014 and $8 billion in 2015. The I.R.S. has a backlog of almost a million pieces of correspondence from taxpayers.

Yet the challenges deepen. Cases of identity theft to fraudulently get refunds quadrupled from 2010 to 2014, to 730,000. There are an estimated one million “malicious” attempts to access I.R.S. databases every day. As many as 20,000 alleged phone schemes are reported a week, mostly targeting older adults, the poor and recent immigrants, with callers pretending to be I.R.S. agents demanding money.

Mr. Koskinen testified that fraud had transformed from random individuals trying to pilfer refunds to organized crime syndicates here and internationally, requiring more sophisticated — and costly — enforcement efforts. Yet the I.R.S. has 5,000 fewer revenue agents, officers and criminal investigators than five years ago.

“We know the cases that we can’t deal, the audits that we can’t complete, because we just don’t have enough people,” Mr. Koskinen said in an interview. “If we had more resources, we’d collect more money, but we’d also pursue more of the fraudsters.”

In a hearing this week, Representative George Holding, Republican of North Carolina, complained to Mr. Koskinen that the I.R.S. was not putting enough priority on trying to catch criminals, saying, “You can’t deter crime unless you prosecute crime.”

The commissioner pointed to his reduced budget, down 17 percent from five years ago, and replied, “It’s a point I’ve been making for two and a half years.”

Before he took over in late 2013, Mr. Koskinen had a longstanding reputation as a top government manager as well as an executive at troubled corporations. Two presidents, Bill Clinton and George W. Bush, had enlisted him for troublesome assignments before President Obama picked him for the I.R.S., to try to give it a fresh start amid the furor over conservative groups.

But by mid-2014, he had so infuriated Republicans over the loss of emails related to the matter that by last fall, when the Justice Department decided against pressing any charges, some House Republicans filed a resolution to impeach Mr. Koskinen — an action that has not been taken against a federal executive in 140 years.

The resolution has not advanced. This week, instead, the House acted on the various relatively minor measures to slap the I.R.S. One would prohibit the agency from rehiring employees fired for misconduct, something Mr. Koskinen acknowledged happened in the past when the I.R.S. had to hire thousands of experienced temporary workers at tax time.

Five House Republicans summed up their party’s attitude toward the I.R.S. in a column on a conservative website on tax-filing day: “Clean up your act, because this is only the beginning.”

Stan Collender, a longtime federal budget analyst, now executive vice president at Qorvis MSLGROUP, has criticized such threats before, and this week was no different.

“You really shouldn’t be able to reduce the amount you spend on I.R.S., decrease their performance ability and then complain about their performance,” he said.

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A version of this article appears in print on  , Section A, Page 14 of the New York edition with the headline: I.R.S. Supporters Fight Back Against Republican Offensive. Order Reprints | Today’s Paper | Subscribe

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