Is There a Major Flaw in Criticism of the IRS?

New Cap Part 3Here’s an interesting article by Peter Reilly from Forbes that looks at the wasteful conference spending by the IRS:

Like everyone else, we were shocked when we heard that the IRS spent $50 million on conferences. The story breaks down the details behind this number:

How Do We Know The IRS Does Not Do This A Lot?

We know this because of the other number that is causing so much outrage.  $50,000,000.  That’s how much the IRS spent on conferences in the course of 3 years.  That’s a lot of money until you consider that the IRS has almost 100,000 employees.  So that works out to less than $200 per employee per year.  Of course, maybe they don’t all go to conferences, but even if it is only 25% of them that would work out to less than $800 per year.

They relate these numbers to the cost of private industry conferences and it looks pretty cheap by comparison. They also outline that because of our complicated tax system, we need a lot of people to enforce the federal tax law. Unless there is serious tax reform, a big complicated organization like the IRS is necessary. This is not exactly a glamour position and most employees earn considerably less than their private counterparts.

The article goes on to contrast the job of an IRS agent against that of his CPA counterpart. While they both have the same basic education, the relationship can often be adversarial even though they are both focused on helping companies comply with federal law. So before you trash the IRS for over spending, take a look at this story:

Many people think we should have a much smaller federal government that needs a lot less revenue.  It is a legitimate viewpoint.  If we get there by changing the tax laws and cutting spending through democratic process, we’ll get to see how much we like it.  If the lower revenue is achieved by gutting enforcement and demoralizing the enforcers that is a less happy result.  It pretty much takes the same education and same skill set to work on gaming the tax system as it does in keeping the gaming under control. If we choose to take out our frustration with tax complexity on the people tasked with enforcement, we will be in for another decade like the nineties, during which, for those who could afford it, taxes really were voluntary.

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