NTU Offers Support for the Tax Administration Integrity Act

The Honorable John Katko
United States House of Representatives
1123 Longworth House Office Building
Washington, DC 20515

Dear Congressman Katko:

On behalf of National Taxpayers Union’s (NTU’s) members, I am pleased to offer our support for H.R. 3167, the Tax Administration Integrity Act. Your legislation would provide a vital safeguard against an IRS practice that could, left unchecked, grow into a huge menace for vast numbers of taxpayers: namely, the tax agency’s use of private contractors in examinations.

Earlier this year Senate Finance Committee Chairman Orrin Hatch made an important inquiry to Commissioner Koskinen regarding a $2.2 million contract extended to the private law firm of Quinn Emanuel for assistance with a near-decade-long tax dispute involving Microsoft; this included examination activities best described as overbearing and harsh. Chairman Hatch noted that:

The IRS’s hiring of a private contractor to conduct an examination of a taxpayer raises concerns because the action: 1) appears to violate federal law and the express will of the Congress; 2) removes taxpayer protections by allowing the performance of inherently government functions by private contractors; and 3) calls into question the IRS’s use of its limited resources.

From NTU’s standpoint, the IRS’s action is fraught with additional risks. Allowing more entities access to confidential taxpayer information only raises the likelihood of additional data security breaches in the future. Last year, before, well before the IRS announced that more than 330,000 taxpayer records were compromised in a hacking incident, a Policy Paper from NTU Foundation warned that even now “the IRS does not know the full extent of the occurrence of identity theft.”

Furthermore, if the agency is allowed to continue this practice, by issuing a “temporary regulation” without a comment period or notification, the door will be open for other grave trespasses against taxpayers’ rights affecting many constituencies.

Fortunately, your legislation would provide a remedy to this behavior before it becomes all too commonplace, by forbidding the IRS from designating non-employees to “receive summoned books, papers, records, or other data and to take summoned testimony under oath.” This language would effectively bar the agency from engaging in one of the few government “outsourcing” activities that would work to the detriment of taxpayers.

As you know, NTU has an active interest in many taxpayer rights challenges that should be addressed with all possible urgency. We have a 30-year lineage of advocacy to improve the checks and balances in the way taxes are administered. In our opinion, H.R. 3167 is a noncontroversial step toward this end, one that all Members of Congress should be able to support without reservation. Accordingly, NTU’s members stand ready to assist you in enlisting cosponsors and winning passage of the Tax Administration Integrity Act.

Pete Sepp