IRS Comes Under GAO Scrutiny for Stimulus Performance

The Government Accountability Office evaluated Internal Revenue Service performance on five new tax provisions from last year's "Stimulus" law: the [first-time] homebuyer credit; the Making Work Pay (MWP)credit; the subsidy for taxpayers paying for health insurance under COBRA; the extension (to five years) of NOL carrybacks and Build America Bonds for state and local infrastructure projects. The Treasury has already done some review of defects in IRS compliance monitoring on the homebuyer credit but GAO pointed out that the IRS should have done better at identifying the qualifying year. The GAO did acknowledge that the IRS was taking steps to pursue taxpayers who abused the provisions of the homebuyer credit. The GAO found that the IRS had defective withholding tables on the MWP credit which led (among other things) to unnecessary interest payments with some refunds and inefficient use of revenue agent time in some cases. For the COBRA and Build America Bonds issues; the biggest known problem is that insufficient data was collected on entities receiving benefits from these programs, making it difficult to determine whether abuse of the programs had occurred.

It appears that the GAO did a thorough job of reviewing IRS performance and that there were and to some degree there still are problems with IRS implementation. Rather than throw the IRS back under the bus; however, it seems to me that the key here is not what the IRS accomplished or failed to accomplish--instead, the key point is that the U. S. Government has become so large that its ability to quickly make changes in operations to accomodate new laws is dubious.