The Jekyll and Hyde of Funding the IRS

There are calls from various quarters regarding the need to adequately fund the Internal Revenue Service. The spectrum of such concerns is quite diverse, and includes not only the National Taxpayer Advocate and the National Treasury Employees' Union, but also some respected taxation scholars as well.

Indeed, there is a pressing need to police the tax return preparers, else a dynamic similar to that of Gresham's Law will result in the unscrupulous tax return preparers driving the ethical ones out of business.

Shortly after leaving the Internal Revenue Service for the private practice of law twenty-something years ago, a potential client insisted that I prepare a tax return in an inappropriate manner. I declined to take the case under such circumstances; the potential client walked, and I have since had no further contact with this individual who, in all likelihood, sought out more accommodating counsel.

My own personal experience is hardly a unique sample of one. Former tax-return preparer Thomas Thorndike "routinely falsified his clients’ returns by fabricating deductions, resulting in illegitimate tax refunds for his clients and repeat business for Thorndike." And Constantine and Carol Ann Sakkis deserted their long-time tax-return preparer for two successively less scrupulous individuals who were more willing to play fast and loose with questionable deductions.

But there is much aversion in the current political client to entrusting the IRS with more money. It seems that hardly a week goes by without the IRS's mishandling and abuse of its mission and function, and its use as a political instrumentality to trample the Constitutional rights of the American public.

And so, while the IRS's function to keep the tax return preparers honest and to stop identity theft needs to be maintained and nurtured, its excesses as a political weapon need to be reined in and tethered.

The question now is whether the legitimate and illegitimate uses of the IRS have become too intertwined with one another to facilitate their separation.

Kenneth H. Ryesky is a lawyer who has taught business law and taxation at Queens College CUNY.  He formerly served as an attorney for the IRS.

There are calls from various quarters regarding the need to adequately fund the Internal Revenue Service. The spectrum of such concerns is quite diverse, and includes not only the National Taxpayer Advocate and the National Treasury Employees' Union, but also some respected taxation scholars as well.

Indeed, there is a pressing need to police the tax return preparers, else a dynamic similar to that of Gresham's Law will result in the unscrupulous tax return preparers driving the ethical ones out of business.

Shortly after leaving the Internal Revenue Service for the private practice of law twenty-something years ago, a potential client insisted that I prepare a tax return in an inappropriate manner. I declined to take the case under such circumstances; the potential client walked, and I have since had no further contact with this individual who, in all likelihood, sought out more accommodating counsel.

My own personal experience is hardly a unique sample of one. Former tax-return preparer Thomas Thorndike "routinely falsified his clients’ returns by fabricating deductions, resulting in illegitimate tax refunds for his clients and repeat business for Thorndike." And Constantine and Carol Ann Sakkis deserted their long-time tax-return preparer for two successively less scrupulous individuals who were more willing to play fast and loose with questionable deductions.

But there is much aversion in the current political client to entrusting the IRS with more money. It seems that hardly a week goes by without the IRS's mishandling and abuse of its mission and function, and its use as a political instrumentality to trample the Constitutional rights of the American public.

And so, while the IRS's function to keep the tax return preparers honest and to stop identity theft needs to be maintained and nurtured, its excesses as a political weapon need to be reined in and tethered.

The question now is whether the legitimate and illegitimate uses of the IRS have become too intertwined with one another to facilitate their separation.

Kenneth H. Ryesky is a lawyer who has taught business law and taxation at Queens College CUNY.  He formerly served as an attorney for the IRS.