Running Head: THE BUREAUCRATIC NATURE OF THE INTERNAL REVENUE SERVICE 1

The Bureaucratic Nature of the Internal Revenue Service

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Introduction

An organizational structure is the backbone to which an entity operational endeavors and

work are anchored to. The management’s administrative relationships and the stream of

thoughts, pronouncement and information are formally laid out by a corporation’s organizational

structure (Hales 2000). These can be flat or tall and none is better than the other. In the United

States Internal Revenue Service’s (IRS) is the biggest national bureaucracy (Merz 2011). It

collects taxes in excess of $ 2 trillion with over 230 million tax returns from individuals,

partnerships, corporate, estates, fiduciary, employment, excise etc literally affecting every

American (Cummings, Longo, & Rioux 2012).

IRS bureaucratic nature

IRS oversight is by the department of Treasury and it has two selected vacancies at its

apex which are the Chief Counsel and the Commissioner of Internal Revenue. Both these roles

are appointed by the president and confirmed by the senate (Merz 2011). The Commissioner

heads the agency and works for five years renewable while the Chief Counsel gives an opinion to

the IRS on legal matters especially those that relate to interpretation and enforcement of tax laws

(Cummings, Longo, & Rioux 2012). IRS oversight board has nine members that ensure IRS is

serving tax payers efficiently and reviews the IRS plans (Wilson 1989).

Its head office is in Washington. D.C and it is tasked with the role of setting up broad

policies, reviewing plans and goals of the operating units plus developing of major improvement

initiatives (Hales 2000). A large amount of the tax revenue and assessment of persons and

corporate is done at the provincial administrative centers scattered across the United States.
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These nine regional offices are found in Andover, Ma; Austin, Memphis, Tenn.;

Philadelphia, Pa, Calif.; Kansas City, Kan.; Texas; Cincinnati, Ohio; Fresno, Ogden, Atlanta,

Ga., and Utah. They shore up the wage and investments operating division by dispensation of tax

returns forms (See appendix one).

The four operating division are the wage and investments income (W&I), small business

and self employed (SB&SE), large and mid size business (LMSB) and Tax exempt and

Government Entities (TE&GE). IRS also has two service organizations i.e. the information

systems and agency wide shared services and a separate specialized independent channel for tax

payers i.e. the Appeals and the Tax payer advocate services (Wilson 1989). Where there is a

violation of the law, the criminal investigations unit comes in which is tasked with the sole

purpose of investigations (Cummings, Longo, & Rioux 2012). It is also involved in crimes that

are not related to taxes as the agency is the only one authorized to investigate crimes related to

the internal revenue code (Hales 2000). The communication and liaison (C&L) provides IRS

staff and external stakeholders with communications capability that promotes understanding of

the IRS’s corporate mission and goals that helps taxpayers to understand and meet their tax

responsibilities (Wilson 1989) .

The tax laws are complex and confusing and these results into numerous disagreements

involving taxpayers and the agency frequently. Hence the IRS appeals office is charged with

providing a neutral conclusion of tax disagreements without court involvement (Wilson 1989).

Furthermore, the National Tax Payer Advocates office is located within the IRS and supports

taxpayers in resolving the agency’s problematic issues (Merz 2011).

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The agency has written rules summarized in its mission statement that guides the entire

organization on how it is to provide the American taxpayers a top quality service and help them

to understand and meet their tax obligations through applying the tax law with integrity and

fairness to all. These rules relate to service to each tax payers, service to all tax payers and

productivity through a quality work environment (Cummings, Longo, & Rioux 2012).

Service to each customer relates to written communications and records where filling is

made easier and the provision of first quality service to the tax payers through faster

communication and helping in with returns or accounts and giving prompt, professional and

helpful treatment to the taxpayers (Hales 2000). It should be noted that after its reorganization in

the year 2000, the new IRS is much leaner and cleaner. The agency has a much flatter hierarchy

than before with four levels of management and half the old number of employees between the

top official and the front line employee thus facility a two way communication (Cummings,

Longo, & Rioux 2012). Also the organizations staffs do retire and others recruited to ensure the

perpetuity of the organization. This form of reorganization has helped the IRS to have a

simplified structure so as to tackle the problem of slow response to tax payer’s queries and needs

so as to provide faster resolution, make faster decisions and improve the ability to deploy new

technology (Wilson 1989).

Conclusion

Unfortunately, the IRS is persistently under a chorus of criticism because of the

bureaucratic nature of its operations as tax forms are difficult to follow and answers about them

are difficult to come by (Hales 2000). Many taxpayers feel their rights are often ignored or

trampled upon by many IRS’s field personnel and in many instances the tax collection and

compliance are spotty or worse.

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IRS loses billions in fraudulent payments as it lacks the ability to check many returns

accurately before refunds. It relies on tax preparers to file taxpayer’s returns many of whom are

poorly trained (Wilson 1989). The agency is short staffed and cannot answer nearly 40 percent of

phone calls and always fails to meet its 45 day deadline to respond to millions of letters from tax

payers. The loss of more than ten thousand employees has reduced its collections by $8 billion

dollars as it aims to cut budget (Merz 2011).

Furthermore, IRS is increasingly unable to administer and enforce the country’s tax laws

despite increased personnel and a modest budget. Its telephone assistance program provides

incorrect answers to even basic inquiries on tax laws to approximately 9 million Americans.

Many of its correction notices are erroneous that relate to tax assessments amounting to over $4

billion (Merz 2011). Up to 40% of the agency’s penalty assessments are declined when

challenged by taxpayers in courts. Also, yearly general accounting office audit finds widespread

financial malpractice and gross negligence as it always fails to account for up to 60% of its

congressional allocations hence failing to meet the standards of financial accountability and

diligence(Wilson 1989)..
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References

Cummings, R. G., Longo, P. J., & Rioux, J. W. (2012). Ethics of Tax Law Compliance: An

Interdisciplinary Perspective. American Journal Of Business Education, 5(1), 95-102.

Hales, C. (2000). Managing through organisation: The management process, forms of

organisation and the work of managers. London [u.a.: Business Press Thomas Learning.

Merz, F. (2011). Max Weber's Theory of Bureaucracy and its Negative Consequences. München:

GRIN Verlag GmbH.

Wilson, J. Q. (1989). Bureaucracy: What government agencies do and why they do it. New

York: Basic Books.

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Appendix one