With the agency squarely in the hot seat over its role in vetting tea party groups and enforcing Obamacare, President Obama's choice to head the IRS vowed during his confirmation hearing Tuesday to restore the public's trust in the scandal-plagued agency.
John Koskinen, who served as the non-executive chairman at housing finance giant Freddie Mac in the wake of the financial crisis, told the Senate Finance Committee that he will work with the panel to make sure the Internal Revenue Service is the "most effective, well-run and admired agency in government."
"In every area of the IRS, taxpayers need to be confident that they will be treated fairly no matter what their backgrounds or their affiliations," he said. "Public trust is the IRS' most important and valuable asset."
Mr. Koskinen appears to be well on his way toward being confirmed and would take over the agency at a difficult time given the ongoing investigations into the agency's political targeting of conservative groups seeking tax-exempt status and the role it will play in implementing Mr. Obama's health care law.
Mr. Koskinen, who was nominated to the post in August, said the agency also has to strengthen its ability to combat fraudulent tax returns and operate under a tight budget.
"To make all of this happen and to protect the revenues coming into the government, we need to solve the funding problem facing the IRS," he said. "This is a view shared today by the IRS oversight board, the taxpayer advocate, and most recently the Treasury inspector general for tax administration and the Internal Revenue Service's advisory council. As the inspector general report earlier this fall noted, the government has saved $1 billion in cuts to the IRS budget on an annual basis and lost $8 billion in compliance revenues."
His confirmation hearing was cut short Tuesday because of floor votes and after Republicans invoked a procedural rule — which is normally waived — that prevented the hearing from continuing in the afternoon.
The GOP's action was seen as a protest against Democrats who rewrote Senate rules to power through Mr. Obama's nominees to fill executive branch or independent agency jobs. The change, which does not apply to Supreme Court nominees, opened the door for lawmakers to cut off debate on a nominee with 51 votes, as opposed to the age-old 60-vote threshold.
Mr. Baucus said the hearing will reconvene at the earliest possible time.
"John Koskinen is the right man for the job," said Sen. Max Baucus, Montana Democrat and Senate Finance Committee chairman. "He has broad support from Democrats and Republicans. And I hope we can approve this nomination quickly and take it to the full Senate for a vote. It's time we get this done."
Sen. Orrin G. Hatch of Utah, the top Republican on the committee, said he did not want the new commissioner to get confirmed until the investigations into what went wrong at the agency were completed.
Despite that, Mr. Hatch told Mr. Koskinen, "I believe you'll make a great IRS commissioner, and I intend to support you."
The confirmation hearing comes about eight months after the Treasury inspector general for tax administration, the IRS watchdog, released an audit that said the agency was inappropriately targeting conservative groups that had "tea party," "patriot" or "9/12" in their names, giving them extra scrutiny in their applications for tax-exempt status.
The audit found that the IRS delayed the applications, in some cases for years, and Mr. Obama forced acting IRS Commissioner Steven Miller to step down as a result.
The news sparked outrage from Republicans, who said it unearthed a nasty political streak within the government. Some groups are still waiting for their tax exempt applications to be approved.
Dianne Belsom, president of the Laurens County Tea Party in South Carolina, told The Washington Times on Tuesday that her group has been waiting since July 2010 for the IRS to approve its application.
Asked about Mr. Koskinen's promise to restore the agency's credibility, Mrs. Belsom said, "the IRS has repeatedly abused its power and what would most benefit the public would be to totally abolish it."
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