With Integrity and Fairness: An Interview with Mark W. Everson, Commissioner of Internal Revenue
Think you're busy this month? Imagine being Mark W. Everson, Commissioner of Internal Revenue, heading into tax season with a $10 billion budget and a staff of 100,000 to manage. Appointed by President Bush in 2003, Everson is a man on a mission. He's almost halfway through his five-year term--and determined to deliver on his charge to reorganize and modernize the nation's tax administration agency without sacrificing its goal: to serve the American public "with integrity and fairness for all." But even as tax season revved into high gear, he took some time in March to talk with the JofA's Geoff Pickard about his personal priorities, his enforcement efforts and his high hopes for closer relationships between his fellow CPAs and the IRS. JofA: What do you consider your major accomplishments since taking office two years ago? Everson: As I came through the confirmation process, and even in the initial months, Congress, the public and business community people felt that enforcement was a dirty word. I think we're beyond that now; there's a recognition that the IRS needs to provide service but also enforce the law. Enforcement has to be done correctly, of course--evenhandedly, fairly, with respect for taxpayer rights. There has to be a balance. We say, "Service plus enforcement equals compliance." The big change in the past couple of years is that it's now understood and appreciated as an appropriate approach for tax administration. We have started to bring enforcement back. JofA: How would you compare your overall policy direction with that of previous commissioners? Everson: I'm the second IRS commissioner to come in under the Reform Act of 1998, which established a five-year term for the commissioner and a new model that saw the executive as a leader of this sprawling organization of 100,000 employees, with lots of different responsibilities. It's difficult to compare what Charles Rossotti and I faced with the previous model, where typically the commissioner was a tax practitioner and not a manager. When Charles came in there was concern about the services the IRS was providing--or, more correctly stated, failing to provide--to the public. He worked to improve services, to reorganize the IRS around taxpayer segments and to make the service more transparent and efficient. I think he achieved that goal. There's no doubt the IRS made a lot of progress. But for a variety of reasons the enforcement side did languish; the presence receded. We've improved the services, and now the principal work here is to rebalance the agency. We have three strategic priorities: to continue to improve service, to enhance enforcement and to modernize the agency. The first two are operational objectives, but in order to make them work you have to spend a lot of time on the third. Charles launched a lot of very important actions in that area that we're building on. JofA: How do the enforcement statistics from recent years weigh on policy? Everson: Clearly, there has been erosion over a long period--through the 1990s to about 2000--in the number of audits and criminal investigations. The IRS did a lot less enforcement at just the wrong time, just when corporate governance was going off track, when a culture of greed seemed to take hold. Mix that with a sad and precipitous erosion in the accounting and legal professions and it made for a bad cocktail. Over the past two years in particular we've been rebuilding enforcement. In the fiscal year that ended in September, we surpassed a million audits of individuals for the first time in four years. And we've started to bring back corporate audits, after years of decline. Last year our audits, document matching and collection activities resulted in our collecting $43.1 billion in direct revenues--up more than 15% from the year before. And that number doesn't include the incremental positive effect on compliance. …