Steven Miller IRS: Did the IRS' Head Mislead, Or Did He Just Lead Poorly?


Nothing quite like flipping through channels and landing on C-SPAN. Not only is it a great place to hear your favorite Jay-Z quotes recited by Marco Rubio, you also get to learn about the bizarro world that is our government agencies. Generally you would expect, indeed demand, leaders to have deep knowledge of their respective organizations including acceptable tasks, procedures, and a general philosophy and mission statement regarding how business is conducted. Not exactly the leadership the IRS had under Steven Miller. How can it be acceptable or even possible for the head of an agency to be so clueless with regards to his own agency? Yes, corporations are far from omniscient (i.e. JP Morgan's Jamie Dimon vs. the London Whale) with regards to their business, but surely they don’t pride themselves on ignorance. Yet not only is this commonplace in the public sector, it seems to be preferred. Perhaps the political risk is greater for a perceived "scandal" than it is for general incompetence. Alas, our collective moral finger-wagging attracts more fear than our admiration for efficacy. This hubbub with the IRS is quite revealing indeed. The leaders of the IRS not only shared their incompetence, they lauded it in a characteristically political manner. However, I feel the biggest failure in leadership was not that of any of the IRS heads, but rather of our favorite non-leaders of the day, Congress. Yes, our legislative branch and its inability to pass a comprehensive and intelligible tax code.

The IRS has a long tradition of targeting political groups. While it is true that the IRS were targeting conservative groups with extra scrutiny, from someone with the IRS’s point of view … it made sense.  501c4 groups have long been viewed with suspicion as recipients of unfair tax exemptions (including by Mitch McConnell). It follows, by that same logic, that the IRS would indeed target those groups. When, over the last four years, a number of groups sprung up claiming tax-exempt status, it probably did make sense to target them, perhaps to catch a few that could be viewed as purely political organizations and not deserving of the tax-exempt status.

This doesn’t absolve the IRS, of course, which had no right to take it upon itself to decide who received such exemptions. However it was in the absence of good leadership that the agency moved down this path. The true disappointment here is a tax system that allows for such a gray area. Not only does it clearly fail in efficiency and encouraging investment, it also fails to promote the behavior (i.e. charitable giving) that it intends to.   

During these troubling times in our political process, we may be a little skeptical of government as a whole. But let me suggest placing our demand for efficacy and prudent management on equal footing with our disdain for scandal. Perhaps we could encourage future IRS chiefs to loudly proclaim that they know what's going on in their agency when they're summoned before Congress. And perhaps a streamlined tax system would allow us to cut the IRS staff by half, and that way maybe the next commissioner will know what’s actually going on.