Neil H. Buchanan, J.D. Ph. D. (economics), is a Visiting

Scholar at Cornell Law School, an Associate Professor

at George Washington University Law School, and a

former economics professor.

Thursday, February 25, 2010

Last week, a deranged man lit his house aflame with his wife and child inside, drove to a local airfield, and flew his plane into the IRS office building in Austin, Texas, killing himself and one IRS employee, and injuring thirteen others. The man left behind a bizarre, rambling message, in which he complained about a wide range of issues, including a long-running tax problem. Because of the target of his terrorist act, commentary understandably has focused on the tax issues on his list of grievances (as opposed to, say, the anti-capitalist comment at the end of his screed).

It is sadly unsurprising that some on the political fringes would applaud this appalling act. What is surprising, however, is that a great deal of more mainstream commentary has taken this act of domestic terrorism as a platform from which to attack the IRS. These discussions, of course, come phrased in the safe language of disapproval. The message goes essentially like this: "While no one could approve of this man's insane acts, one must admit that taxes are annoying," or, "No one should condone these crimes, but the IRS really is out of control."

Such commentary—deliberately or not—justifies the actions that it claims to reject. The tragic fact is that it is politically advantageous in this country to vilify the Internal Revenue Service and its employees.

Moreover, while the Austin attack is the worst attack on the IRS to date, it hardly presents an isolated threat. To the contrary, as The Wall Street Journal reported after the attack, threats against IRS employees have been steadily rising in recent years, with over 1000 reported in 2009 alone. The agency has been forced to provide armed security for many of its employees and spokespeople, and it has been the subject of serious threats. A number of years ago, for example, a planned bombing of an IRS building was discovered and prevented.

What makes all of this ugliness especially poignant and inexplicable is that the IRS is a model government agency. The reality of its operations is far afield from the frequent claims that its agents "run amok." It is an agency with policing powers that has an enviable record of commendable behavior. While no agency—public or private—can claim to be above reproach, our tax collectors continue to set a standard for behavior that is a testament to how well a large bureaucracy can operate, even under severe constraints.

The IRS as a Political Target: Turning Understandable Grumbling into Over-the-Top Rage

No one expects an enforcer of rules to be popular. For instance, people do not like being pulled over for speeding, and they have choice words (usually muttered under their breath) for the officers who do so. Officers who give out parking tickets, too, are routinely berated, threatened, and spat upon. With much larger amounts of money at stake, then, it is hardly news that people would prefer not to be cited by the tax collector. Even so, "I wish I could have gotten away with it" should not be the basis of a political movement.

The IRS has, of course, long been the object of political scorn. Politicians know a good applause line when they see it, and pledges to reduce taxes too easily slide into efforts to reduce the enforcement powers of the IRS. President Nixon famously punished the IRS for doing its job with respect to his personal taxes: Soon after, he cut funding for the agency, thus delaying for years an upgrade of the Service's computer system. In an especially absurd twist, the IRS's subsequent inability to keep up with changes in technology sparked criticism of the agency itself, not of the politicians who crippled it.

In addition to Nixon, former U.S. Supreme Court Justice William O. Douglas (probably the most liberal justice the court has ever seen) was famously hostile to the government in tax cases, frequently dissenting from otherwise-unanimous Court decisions with little or no comment. If it was a tax case, it seemed, the government could never win his vote.

The popular culture has fun at IRS employees' expense as well. Even when a Hollywood movie depicts an IRS agent in a sympathetic way—as, for instance, "Stranger than Fiction" did with Will Ferrell's character—the agent is almost inevitably portrayed as a stunted, robotic, unemotional object of pity.

Of course, these depictions of, and these misleading claims about, the IRS go back for decades. The question the Austin attack and its reception in some quarters raises is: What has changed recently? The biggest change is that a large number of politicians have cast their political fortunes with those who take extreme views challenging the legitimacy of the IRS, and of taxes themselves. Congress has passed laws requiring the IRS not to use disparaging language to describe people who believe, for example, that paying taxes is voluntary rather than mandatory, or that one is only a "citizen" of the United States for tax purposes if one is a resident of the District of Columbia or some U.S. territories.

Being jailed for tax evasion -- another fear stoked by the anti-tax movement—is also quite rare. Moreover, to prove criminal tax evasion, the federal government must meet a different standard from that which applies to any other criminal act. Rather than being shown to have "knowledge" of the illegality of their claims, tax evaders must be shown to lack a good-faith belief (no matter how ill-informed or illogical) that they do not need to pay taxes. Would we even consider applying such a forgiving standard to the laws applying to, say, embezzlement?

In short, there are far too many politicians who have lent their credibility to those who wrongly attack the IRS. The result is a legal landscape that makes it more difficult to collect taxes owed, and a social landscape that makes growing numbers of people feel justified in evading taxes.

The "Evidence" of IRS Misbehavior: Fixing a Problem that Did Not Exist

Some readers might ask: But haven't I heard about cases of gross IRS abuse of taxpayers? Shouldn't we be worried about that? The answer is yes, you have probably heard such stories; but no, they are not true.

Indeed, one of the more shocking commentaries on the Austin bombing case was posted by the owner of a technology company on The Huffington Post, probably the leading liberal online news source in the country. This essay is a perfect example of the form that I described earlier. The author begins, "I do not own or have access to a plane, but I know what it's like to be frustrated with the tax system in this country." Later, he says, "It goes without saying that the proper solution to the crisis of complexity is not violence. But …" The author then urges readers that we should not ignore the problem of a supposedly out-of-control IRS merely because it would be "politically incorrect" (whatever that might mean) to discuss the suicide bomber's complaints.

The essay then says: "The Senate Finance Committee held hearings in 1998, just as I was incorporating my business, looking into the ways the agency had failed to serve taxpayers. Former IRS agents testified about the routine practice of punishing taxpayers they didn't like with the explicit consent of agency management. It isn't hard to understand why some taxpayers might be angered by that. Not much has changed since 1998, sadly."

This claim is wrong on two levels: First, the hearings to which the essay refers were revealed to be a farce; and second, a great deal has changed since 1998, even though there was not much wrong in the first place.

The Truth About the 1998 Hearings—and About the IRS

The 1998 hearings were the result of what amounted to a "casting call" by some members of Congress, an invitation for any taxpayer to come to Washington and tell how the IRS had abused them. One particularly lurid bit of testimony came from a taxpayer who claimed that IRS agents had raided his home, knocked his colleague's 12-year-old son to the ground, held him there at gunpoint, and forced his 14-year-old daughter to get dressed in front of them. The problem is that this was all false. In a subsequent civil suit against the IRS, testimony from the people involved revealed that every part of the story had been fabricated

Similarly, in response to claims that IRS agents were abusing their power to punish particular taxpayers, the independent auditing arm of the federal government, the General Accounting Office (now known as the Government Accountability Office), found no evidence of retaliation or improper decision-making on the part of IRS agents or managers. The GAO, moreover, is widely respected for its neutrality and ability to take a careful, reasoned approach.

What is especially surprising about the 1998 IRS hearings, in the end, is their failure to turn up even the hint of any systemic problems with the agency and how it went about its work. When one considers how many complaints of abuse are brought (and sustained) against other law enforcement agencies, one would expect, as a matter of course, that the IRS—an agency that deals with almost literally every citizen in the country every year—would have some incidents that would cause real concern. Instead, the hearings turned up no evidence of systemic problems, and even the isolated incidents of concern turned out generally to be false or exaggerated.

Again, consider this track record: This is an agency that processes legal documents from well over 100 million citizens and businesses each year, and that must engage in enforcement actions against a large number of recalcitrant taxpayers each year. Yet it is so well run that even a highly-sympathetic Congressional committee could not gather evidence of more than a handful of possible problems. Not a handful each year, a handful in total.

I am not claiming, of course, that the IRS never does anything wrong. A large agency run by fallible human beings cannot help but make mistakes. Happily, however, those mistakes appear to be relatively minor and relatively infrequent.

Nevertheless, Congress reacted to those hearings by enacting legislation that significantly changed the way the IRS interacts with the public. The agency was directed to deploy more of its employees into "customer service," and agents were told that they could lose their jobs if there was even a complaint filed against them. The Office of the Public Advocate, formed within the IRS, became a very aggressive investigator of the public's complaints. The number of audits plummeted. Whatever misbehavior might have been going on was certainly put under renewed scrutiny.

Dousing Fires With Water, Not Gasoline

The Austin bomber's barbaric acts have been roundly—and appropriately—criticized. Unfortunately, discussion of the attack has too often taken on the tone of accepting his basic premise: that the IRS routinely and wantonly harms people in an abuse of its power. Those who have considered his specific complaint about his treatment under the tax law have found, in fact, that the IRS properly enforced the law as written. At most, it can be argued (as in a recent guest editorial in The New York Times) that the law itself should be changed. Maybe so, but that is hardly the IRS's fault; if anything, the fault lies with Congress.

The most important lesson that we should learn from this incident is not that some especially unstable people might go over the edge, though of course, that is true. We should instead remind ourselves just how routinely we accept without question rhetoric and actions that vilify conscientious people who are doing their jobs well. Politicians and commentators who contribute to the atmosphere of fear, repeating lies about IRS malfeasance, are responsible for amplifying false arguments, feeding public cynicism, and making public servants' lives unnecessarily dangerous. We should demand better for our public employees.