It took some time and an issue as seemingly innocuous as Katrina tax relief for the Internal Revenue Service to get dragged into a public relations skirmish this election season.The trouble start a couple of weeks ago, when Commissioner Mark Everson made an announcement that the IRS will postpone collection activities against taxpayers in the hardest-hit areas struck by Hurricane Katrina until 2007. That’s essentially buys those taxpayers a couple more months -- through the holidays -- after a one-year filing extension expired Oct. 16.
About 1.2 million taxpayers lived in the seven Louisiana parishes and three Mississippi counties where the agency had allowed people to delay payment of 2005 income taxes. Everson made his announcement during an Oct. 10 conference call, according to a New York Times article that ran Oct. 27, with the paper noting that while it’s far from unusual for the agency to postpone collection activities around the holidays, Everson made mention of the upcoming election in delivering his decision.
That same article rolled a trio of former IRS commissioners out of mothballs to deliver their take on whether tax collections had ever been delayed to keep up political appearances around election season. Not surprisingly, the commissioners -- Sheldon Cohen (who served from 1964 to 1969), Donald Alexander (1973 to 1977), Jerome Kurtz (1977 to 1980) and the more contemporary Charles Rossotti (1997 to 2002) -- all said that election season would have never weighed into their administration’s collection decisions. The articles also made reference to Everson's "close ties" to the White House.
The same day, Everson denied in wire reports to the Associated Press and Bloomberg News that political considerations has weighed into his decision. The money quote ran like this: "There's no politics in this," Everson said. "As to the idea that I'm somehow close to the president, I wasn't even invited to the White House Christmas party last year."
On Saturday, the Times published an editorial criticizing Everson for both the Katrina move, as well as the agency’s decision to cut the positions of half the lawyers who audit estate tax returns earlier this year -- saying that the attorneys were not needed, but not releasing enough data to verify the claim. As the paper wrote, “The possibility that Mr. Everson is wielding power in ways to please his boss, President Bush, is especially disturbing given that he has courted that suspicion before.”
The paper called for Everson to make his agency more transparent, a call that carried some additional weight, considering the IRS went to court in April, losing a battle to keep detailed statistics on how the agency enforces the nation's tax laws out of the hands of the non-profit research group, the Transactional Records Access Clearinghouse.
There’s no question that the IRS as a federal agency doesn’t elicit the warm and fuzzy feelings of, say -- well, just about any federal agency. But the idea that delaying collection enforcement in any of the Katrina-impacted areas would somehow tilt the election -- that seems a bit of a stretch. If feelings of resentment and dissatisfaction make their way to ballot boxes in those Louisiana parishes and Mississippi counties, there are likely larger driving forces than tax collection.
There might not have been a need to broadcast the small kindness of the delay into 2007, and whether politically motivated or not, the fact is that the IRS is still sending out collection notices to those taxpayers, even if it’s not going to begin immediate enforcement. I’m betting Everson didn’t see any problem with burnishing his agency’s appearance, even if it was for appearance’s sake. There’s no question the IRS likes to send out news with a positive spin, just look at the latest release headlines at www.irs.gov/newsroom.
Everson did a good job at containing the questions about his political motivations and aspirations this time. It’ll be interesting to see how he handles things the next time they arise. And of course, whether or not he gets that invite to the White House Christmas party this year.
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