There may be some jobs tougher than beach master for the initial landing force at Omaha Beach during the Normandy invasion, or Commissioner of Internal Revenue, but off-hand I can’t think of any. Both positions are intense, all-consuming, and attract a great deal of incoming fire. And Mortimer Caplin has done both.

Mortimer Caplin

Yet Caplin, the commissioner during the terms of Presidents Kennedy and Johnson, believes the Internal Revenue Service is currently facing a tougher task than it did back when he was commissioner as a result of the additional roles handed it by Congress through the enactment of new social programs.

“I’m a great defender of our tax system, with all its pockmarks,” he said. “What people forget is that a sound tax system is at the heart of a democracy. Without it, we couldn’t maintain our defenses and continue as the leader of the free world.”

However, IRS responsibilities today revolve not only around tax collecting, but also include policing social and economic policies with limited resources. The passage of the health care bill add exponentially to an already packed list of administering homebuyer credits, economic stimulus disbursements, and work pay credits, among others, he noted. You can listen to a podcast of the interview with Caplin here.

“It tends to move the IRS from its basic responsibilities, which is to help raise the revenue of this country,” he said. “IRS personnel are people with accounting, economic and investigative abilities. The new programs require them to carry out other functions for which they’re not qualified.”

For example, he noted, “Even the Earned Income Tax Credit could have been handled by Health and Human Services. What has happened is that there are a tremendous amount of fraud and deficiencies associated with the program. This has produced a great loss of revenue, because the Service has to focus attention on the wrong returns. Rather than looking at high-income returns, with, say, foreign investments, they have to examine the EITC. Their mission has been watered down.”

Moreover, socially oriented programs involve sympathy for the underlying recipient, and the Service isn’t attuned to this, according to Caplin. “HHS could examine the qualifications and send out the checks,” he said. “You would have people handling it that understand the program more.”

And instead of having an annual appropriation, which gets examined yearly, the programs get into the Tax Code but never get out. “Congress has to be more selective,” said Caplin. “They’re leaning more on giving credits than on appropriations.”

And adding credits to the Tax Code is like getting trapped in a roach motel — you can check in, but you can’t check out.

“It’s more difficult to amend the Internal Revenue Code than cut an appropriation,” he observed. “Congress should not be in the habit of just automatically adding another credit to the code.”

Part of the remedy is to make related agencies the main part of the process, suggested Caplin. “There may be a need for the IRS to play backup, but it should not have the full responsibility imposed on it. I’m concerned that it’s distorting the mission, which is to collect the proper amount of tax and encourage voluntary compliance.”

“Our record is better than any other country, and as a result we’re highly respected throughout the world. The American public is entitled to courtesy and fairness and the total integrity of the revenue service, but in recent years taxation has had a bad connotation,” he said. “There has not been enough emphasis on the underlying obligation of Americans to fund our democracy.”