IRS’s new leader has ACA, other challenges

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

More in Herald Business Journal

Snohomish inventor makes changing beds magical

He hopes to make his big push in the hotel industry, where injuries to housekeepers are increasing.

Boeing planes designed for Alaska to make final flights

The special Boeing 737-400s carry cargo in the middle of the plane and 72 passengers in the rear.

Boeing creates a Renton office to oversee its new airplane

Experts expect the company to make a formal 797 launch decision no later than next year.

Equifax dumps its CEO after the damaging data breach

Many applauded Equifax’s handling of the problem, but management was under fire for lax security.

Job fair planned for Tulalip community members

Tulalip Tribes Employment is holding an employment clinic from 9 to 11:30… Continue reading

New memory care community opens in Mukilteo

Health care insurance is the next topic on KSER’s monthly personal finance… Continue reading

Marysville Tulalip chamber plans to host candidates forum

The next Greater Marysville Tulalip Chamber of Commerce Business Before Hours event… Continue reading

Adidas exec, 4 coaches charged in college bribery scheme

Prosecutors said at least 3 recruits were promised up to $150K to attend schools Adidas sponsored.

New US sanctions hit 8 North Korean banks, 26 bank workers

The sanctions are part of an effort to use economic pressure and diplomacy to end the nuclear crisis.

Most Read