Benjamin Franklin remarked in 1789 “Nothing is certain in life, but death and taxes”. Unfortunately, this has shown to be true throughout history, even when the organization is not designed or run under optimum conditions. The article was a summary of the transformation the IRS was beginning in 1998. Change was mandated in 1996 by US President Bill Clinton in the Restructuring and Reform Act 1998. The organization was receiving a major structural reorganization from a geographic based model to a market-based service. As with most government agencies the IRS looked towards the private sector and appointed Charles Rossotti as the 45th Commissioner who drew from lessons learned in the private sector. For this government agency the taxpayer’s are the customer.
The IRS is at the least an outdated organizational structure. The first major structural changes were attempted by President Truman in 1952. President Truman established a three tiered, geographically based organization with national, regional, and local offices. There were 40 regional districts that were managed independently and budgets were handed down from central functional groups. The budgets were often not allocated as intended once it made its way down and through the district directors – who might use funds for other projects – who had little accountability for resources spent.
One of the good things, if it can truly be described as such, is that the IRS has developed an employee base that is loyal and insular. This unfortunately is probably due to what former commissioner Margaret Richardson said “No one likes the tax man”. The culture was described by stating “IRS employees were unusually committed to the organization and to one another”. However, it was noted that the employees were more comfortable with receiving criticism from taxpayers rather than management.
It is noted that the service was