Is the IRS Operating Constitutionally?

 

 

Recent events surrounding the Internal Revenue Service (IRS) and possible misconduct has prompted me to ponder two questions: One, exactly what is the IRS and what is it supposed to do? Two, Is it conducting it's mission in accordance with the Constitution? I hope to avoid any partisanship (but sometime I can not help myself).

The first income tax was created in 1862 by the Revenue Act of 1862 to help pay for the Civil War (1861-1865). By the end of the war 10% of America's households were paying between 5% and 10% in income tax which paid for 21% of the war. Prior to 1862, the government avoided the income tax issue because most politicians believed it was unconstitutional, because it was strictly a revenue tax that could easily be abused for political purposes. The Supreme Court agreed in 1894 when it declared in Pollock v. Farmers' Loan and Trust Co. that a tax on income was outside of the intent of Congress' power to levy taxes.

The Progressive Era of the early Twentieth Century led to the creation of many new government agencies and offices to oversee immigration, consumer protection, corporate monopolies, and other progressive programs. This expansion of government required funding, so the income tax was resurrected in the form of the 16th Amendment, which was approved in February, 1913. The IRS was born.

The basic mission of the IRS is simple. It is to collect income taxes and interpret and enforce the Internal Revenue Code (about 10,000 pages of laws and regulations). With about 100,000 full time employees, the IRS is the largest law enforcement agency in the United States and is three times the size of the Federal Bureau of Investigation (FBI). It is responsible for over a trillion dollars in revenue, has a second to none computerized data base (this is one reason why it will handle healthcare records for all Americans according to the Affordable Care Act or ACA), can order many institutions to turn over information--without a court order--about Americans, may impose civil (monetary) penalties at will in which the accused has to prove their innocence--contrary to the legal foundation of "innocent until proven guilty," and has the final authority in determining the tax-exempt status of any group. The IRS can also make a "jeopardy assessment" in which the assets of someone may be seized without the approval of a judge.

Although a law enforcement agency, most IRS agents are not gun toting cops, although they do have a criminal investigative unit and even a SWAT Team. The average "agent" is there to check tax information and assist you with your tax questions. Unfortunately the tax code has created a situation in which reliable information, even from an IRS agent, is hard to get. An internal study by the IRS and Government Accounting Office (GAO) in the late 1980s showed that when presented with a taxpayer question only one-third of 1000 IRS agents got the answer right. The power to tax opens the door to abuse of power and when an uncontrolled code of laws and regulations is attached to that, it gets even worse.

Using the IRS for political purposes has been around for one hundred years. Few Presidents escaped the convenience of utilizing the little controlled investigative powers of the IRS to intimidate political rivals. The two most famous are probably Franklin Roosevelt and Richard Nixon. FDR's own son once said, "(My father) may have been the originator of the concept of employing the IRS as a weapon of political retribution." In reference to his appointee as Commissioner of the IRS Richard Nixon said, "I want to be sure he is a ruthless son of a bitch, that he will do as he's told, that every income tax return I want to see I see..." The IRS has been involved in numerous smaller political scandals and just about every year about 20,000 valid complaints are made but internal oversight has not been an important part of the IRS mission.

So is the IRS operating constitutionally? Until there is a mass movement to reign in the extraordinary powers the IRS has been given it will continue to operate under the basic parameters of the Constitution. However, a case could be made that the IRS stretches to the limit certain rights outlined in the Bill of Rights and the 14th Amendment.

For national security purposes most Americans would agree that allowing for a classified type of search warrant is legitimate, but in the case of the IRS why is it the case? The 4th Amendment clearly protects the public from unreasonable search and seizures unless a warrant approved by a judge with supporting "Oath and affirmation" is issued. The IRS does not have to do this. Even though the 5th and 14th Amendments say Americans can not be "deprived of life, liberty, and PROPERTY (emphasis added)" without due process, the IRS can do that. The 7th and 8th Amendments discuss our right to a jury trial and excessive fines, but the IRS can change the rules putting the burden of proof on the accused in a trial and may through "jeopardy assessment" seize property and impose fines without a trial.

I am convinced the Founding Fathers would not approve of the unaccountable power wielded by the IRS. While reference to the Founders is not always popular with my progressive friends, they had a healthy distrust of concentrations of power (hence federalism, three branches of government, bicameral legislature, etc.) While the Founders may well agree with the necessary evil that is the income tax and a government bureau to collect it, the extraordinary investigative and prosecuting power of the IRS would draw protest and criticism from Franklin, Jefferson, Adams, Washington, Madison, and others (only Hamilton might think its a great idea). The challenge facing the government and voters (in light of the latest scandal) is how do we hold the IRS accountable for its actions, limit its abuse by political expedient politicians, while also investigating and punishing those that truly are tax evaders or "playing the system?"

I offer the following suggestions (which I admit I have not fleshed out at this point):

1. Simplify the damn code. When only one-third of IRS agents understand it then how are the rest of us suppose to do so? If there is less room for unintentional mistakes, then everyone benefits.

2. Follow the Constitution. Require a proper warrant to look at any personal records of any American, including the requirement that they must be notified when it s happening. Any punishment should be imposed by a judge or jury and not some IRS official. The IRS is not above an Americans right to due process.

3. An independent, bipartisan oversight group should be responsible for holding the IRS accountable not its own internal auditor because even if that person is doing their job the report can be filed away. I understand that this just enlarges government, but the IRS has proven historically and in recent weeks that it can not regulate itself.

4. Develop criteria for professional conduct that includes clear definitions and punishments. And get rid of "pleading the 5th" when questioning is job related. Protections against testifying against yourself should never have been applied to public employees when being questioned about a job related issue, especially when that testimony may involve the cover-up of a questionable practice for political purposes or protecting a higher level official.

 

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