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Blog Post | April 16, 2021

To Achieve Tax Justice, Biden Must Restore IRS Oversight Board

Independent AgenciesIRS
To Achieve Tax Justice, Biden Must Restore IRS Oversight Board

As part of our Agency Spotlight, the Revolving Door Project is tracking independent agencies for vacant seats, expired terms, and pending nominations. These independent agencies exist across the federal government and possess enormous responsibilities over a wide array of policy areas. Yet they often receive far less attention than Cabinet-level agencies. Far from the public eye, many have been left to suffer with an insufficient number of members to perform their statutory authorities. 

It is relatively well known, for example, that the Internal Revenue Service has long suffered from under-investments in its budget. Less appreciated, however, are independent facets within the IRS which, rather than being primarily burdened by budget constraints, have simply been forgotten. One such facet is the IRS Oversight Board (IRSOB), which is supposed to provide guidance to the president on the IRS Commissioner and develop long-term strategic plans for the agency. The Board has lacked the five members necessary for a quorum since 2015. 

The IRSOB originated in 1998 based on a recommendation by the National Commission on Restructuring the IRS. It is composed of nine voting members, of whom two are the Treasury Secretary (or Deputy Treasury Secretary, if designated) and the IRS Commissioner. The other seven are presidential appointees, of whom one must be a federal employee or IRS employee representative. Those seven members are nominated specifically for the IRSOB and confirmed by the Senate for five-year terms.  

Currently, besides Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig, the only current member is Robert M. Tobias, who has been a member since President Bill Clinton nominated him and the Senate confirmed his nomination in September 2000. Tobias’s term expired in 2005, but he has remained on the IRSOB without a successor over the course of three distinct presidencies. 

Although it has been ignored, IRSOB has incredible responsibilities to ensure that the IRS is performing its duties fairly, that taxpayer services are adequate, and that the IRS is prepared for future tax-related demands. It is also tasked with reviewing and approving the IRS’s yearly budget request (something it would be doing right about now if it had sufficient members) and with conducting a yearly survey on taxpayer attitudes. And, importantly, it is the main oversight body for the IRS Commissioner and advises the president on who to appoint for the position and on whether or not the Commissioner should be fired. 

That’s lucky for current Commissioner Charles Rettig, who’s record in cutting taxpayer services and redirecting audit resources away from high-income and wealthy individuals and big corporations should otherwise subject him to a strong recommendation for dismissal

It’s unlucky for just about everyone else, particularly poor taxpayers who rely on IRS taxpayer services to resolve complicated tax issues and questions regarding their returns and eligibility for certain tax credits. Without a functional IRSOB, the IRS may struggle without the guidance required to adjust to increasing demands, something it has already encountered with rising numbers of tax returns each year, the need to rapidly upgrade its technology and establish online services, and the growing complexity of tax evasion schemes. 

Notably, the IRSOB’s lack of quorum is not for lack of trying. Former President Trump nominated a number of people to fill the Board’s seats, but Mitch McConnell’s Senate never voted on them, instead famously prioritizing judgeships. President Biden and Senate Majority Leader Schumer should reverse this trend, reject the idea that nominations must have tradeoffs, and reinstate the IRSOB as a functioning body. Biden has not yet nominated any members for the IRSOB, but he would only need to nominate two new members (and have the Senate confirm them) to restore the Board’s quorum. It would be a worthy investment in ensuring that the IRS can perform its duties justly and fairly over the coming years. 

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