Washington News

IRS Commissioner Charles Rettig recently reached the one-year mark in his position. His first year included a 35-day federal government shutdown and the implementation of the Tax Cuts and Jobs Act.

Rettig's appointment was welcomed by many tax professionals. He had been in private practice for over three decades and served many tax clients. From 2008 to 2010, Rettig was the Chair of the IRS Advisory Council. His experience as a tax professional has helped him manage the 75,000 IRS employees.

Each IRS Commissioner sets several goals or objectives. Rettig has focused on three areas – compliance and enforcement, information technology and improving relations with Congress.

The IRS is responsible for collecting over $3 trillion in taxes each year. Rettig believes that proper enforcement is essential to encourage regular taxpayers to file and pay their taxes. He stated, "The IRS must maintain a visible presence in every neighborhood, based on areas of perceived noncompliance as well as geographic areas around the country. Absent a visible, robust enforcement effort, taxpayers with sophisticated representatives might feel free to pursue overly aggressive tax positions. If so, they are mistaken."

With over 140 million tax returns filed each year, the IRS information technology systems must regularly be updated. Rettig has advocated a six-year plan requiring $2.5 billion to improve the IRS information systems. He notes that digital services "must be expanded without ignoring traditional methods of interaction with the taxpayer and practitioner communities."

The third area of focus for Rettig is repairing relations with Congress. Increased staffing and better technology will require greater funding from Congress. During the past several years, conflict between Congress and the IRS has led to reduced budgets and fewer IRS staff.

For fiscal 2020, the House has proposed $12 billion and the Senate $11.4 billion in IRS funding. Upgrading information technology is funded with $290 million of this proposed budget. Rettig has met with about 70 Members of Congress to explain his vision for the IRS.

Editor's Note: While the IRS is not a popular organization with most Americans, it is important to the nation that it functions properly. The IRS computers are under continuous attack by hackers – mostly from overseas locations. They must be updated and protected because taxpayer personal information is held in the data centers. Honest taxpayers who pay the correct amounts have a reasonable expectation that the IRS will make the system fair by asking all citizens to pay their share. Part of that fairness process is enforcement for those who are reluctant to pay. Commissioner Rettig is attempting to build a capable and fair tax system.