IRS’s new leader has ACA, other challenges

  • By Michelle Singeltary
  • Tuesday, April 8, 2014 2:33pm
  • Business

John Koskinen could be relaxing in retirement, spending time with his four grandchildren.

Instead, he decided to take on the task of running an agency that is both feared and attacked.

As the 48th commissioner of the Internal Revenue Service, Koskinen oversees the management of about 90,000 employees and a budget of about $11 billion. Given his background as a corporate and government troubleshooter, Koskinen was a good go-to choice, even if he does sometimes play hard to get.

When the George W. Bush administration was trying to get him to take the IRS job and found his private cellphone number, he joked, “I need better caller ID.” His answer was no. “This time around, I said I just need counseling,” he said of his decision to accept the Obama administration’s offer.

Koskinen, who has been on the job for a little more than three months, spent 20 years in the private sector and another 20 in the government work, primarily dealing with organizations under stress. He steered Freddie Mac during some of its toughest times following the crisis in the housing market. He also served as deputy mayor and city administrator of Washington, D.C.

The commissioner said in an interview that he wasn’t looking for another job but this time couldn’t resist the challenge. He said he told the Obama administration if they had “some big problem that nobody wants to touch, why, call.”

Except for what he calls the “background noise,” Koskinen says he enjoys taking on complicated circumstances and organizations, sorting things out and getting them to run more efficiently.

The noise he was referring to involves the controversy over the agency’s handling of certain organizations applying for tax-exempt status. Koskinen says the IRS has put into place procedures to prevent a recurrence of the obstacles thrown up by the agency for tea party and other mostly conservative-leaning groups.

“One of the most important things we have to do is restore public trust in the agency, which was shaken by the management problems that came to light last year with regard to the determination process used for applicants to become tax-exempt social welfare organizations,” Koskinen said in a speech to the National Press Club.

It’s vital that Koskinen makes sure the agency does indeed fix what led to the tax-exempt problems. But what lies ahead for the agency is work that also fits the commissioner’s natural disposition. In addition to dealing with identity fraud problems, assisting Americans who can’t pay their tax bills and managing the tax season, the IRS has a lot of responsibility for issues related to the Affordable Care Act.

If you can afford to pay for health care under the act but choose to go without coverage, you’ll have to pay a penalty when you file your federal income tax return.

But the IRS has an even bigger role than collecting penalty payments. Under the ACA, families with low or moderate incomes can qualify for what’s called an “advanced premium tax credit” to help them pay the monthly premiums for insurance purchased through the health care exchanges. People have the option of having the credit paid in directly to their insurance company or they can claim it when they file their tax return.

If a family’s size or income changes during the year, this could affect the amount of credit received. The IRS has to keep track of the differences in the credits payments because they could result in a refund or tax bill. All this means that the IRS is a key player in the mechanism by which people are going to get their health care subsidy.

Koskinen says the agency has had to shift a lot of resources, largely technology related, to make sure the agency’s systems can handle its responsibilities under the ACA.

In last year’s budget, the agency sought $440 million to comply with the ACA. It got none of the request. And given the politics surrounding the law, it’s not likely the agency will get the $452 million it has requested for the coming fiscal year.

“The problem is going to be that sometime in January, we’re suddenly going to have a lot of new callers,” Koskinen said. “So if the Congress, when I go to testify next week on the budget for 2015, decides that it’s terrific to watch us struggle where we are, our level of taxpayer services is going to be threatened. If you don’t like the time waits now, wait until next spring.”

But even if the money isn’t allocated, Koskinen said he’s going to make sure he finds the resources to handle the ACA mandate for his agency.

Well, he certainly got what he wanted: a complicated circumstance that’s going to need a lot of sorting out and efficiency.

Michelle Singletary: michelle.singletary@washpost.com.

Washington Post Writers Group

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.