The IRS Is Up to No Good

If there is one federal agency that has clearly run amok during the Obama administration, it's the United States Internal Revenue Service. From the harassment of tea party groups applying for nonprofit status to the defiance of congressional subpoenas, it's an agency badly in need of a thorough housecleaning.

IRS Commissioner John Koskinen is already under threat of impeachment by the U.S. House of Representatives. That might be a good start, but removing him won't fix the problems any more than the ouster of his predecessor did. The problems run too deep. Congress needs to act, not just by stepping up oversight of the tax collectors but by jerking their chain and narrowing their authority.

From top to bottom the agency is engaged in a wholesale abuse of its authority – and is defying attempts to investigate what it has been doing. Groups on the right are still reportedly having their applications for tax-exempt status slow-walked through the process. Confidential data is still leaking out and the auditing process is out of control.
For example, the agency apparently presumes that U.S.-based corporations doing business overseas are not accurately reporting their U.S. taxable income or paying what the liberals like to refer to as "their fair share."

There are companies that have a strong presence overseas – which is good for their bottom line but doesn't add much in the way of revenue to the U.S. Treasury. Under current law, corporate profits earned overseas and left overseas – where the corporate tax rate is uniformly lower than it is here – are not subject to taxation in America. It's only when those profits are brought home that they become subject to federal taxes. This means they're taxed twice, once in the country where they were earned and once again when they are brought home. So leaving them where they're earned is smart business.

The IRS and the other big spenders don't like this. To them it's hiding taxable income rather than effective management of corporate resources. The spending class wants this tax money and the penalties they think these companies should be paying in order, one assumes, to narrow the gap between income and spending and to have money to spend on expanding existing programs and to create new ones.

One company that has had to deal with this is Microsoft, which for some time has been fighting with the IRS over a previous filing. The agency refuses to affix a dollar amount to what it believes the company owes but has instead gone on a fishing expedition, taking numerous and lengthy depositions from company executives, subpoenaing reams of documents and, in something that should be of concern to all, bringing in outside counsel to assist them with the project.