Former IRS Commissioners Differ On Politics, United Against Agency Cuts

Seven former Internal Revenue Service (IRS) commissioners have signed onto a joint letter to Congress speaking out against further reductions in the IRS' fiscal year 2015 budget. In the letter, the commissioners note that cuts of $838 million in the House and $470 million in the Senate would be the sixth year of cuts in a row. Total cuts over last five years have reached $1.2 billion, more than a 17% cut since 2010.

The former IRS commissioners who signed onto the letter are Mortimer M. Caplin, Sheldon S. Cohen, Lawrence B. Gibbs, Fred T. Goldberg Jr., Shirley D. Peterson, Margaret M. Richardson, and Charles O. Rossotti. Here's what you need to know about them:

• Mortimer M. Caplin (1961-1964). If the name Mortimer M. Caplin sounds familiar, it's because the nearly 100 year old lawyer is the founding member of the venerable Caplin & Drysdale. In January 1961, Caplin was originally appointed Commissioner of Internal Revenue by President John F. Kennedy; he served under President Nixon until July 1964. On May 1, 1961, President Kennedy became the first (and only, so far) sitting president to visit IRS. One of Caplin's notable achievements was the laying the groundwork for the first modern computer system. It was time: during Caplin's tenure, in 1964, the total number of tax returns filed by taxpayers in one year first exceeded 100 million (annual report downloads as a pdf).
• Sheldon S. Cohen (1965-1969). Sheldon S. Cohen, currently Of Counsel with Farr Miller & Washington, LLC, was appointed to serve as Commissioner of Internal Revenue under President Lyndon B. Johnson. A tax attorney and Certified Public Accountant (CPA), Cohen had previously served as a legislative draftsperson for the 1954 Code and Regulations and was Chief Counsel at IRS before taking the reins as Commissioner. In 1967, Cohen received the "Award for Excellence in Improving Communications and Services to the Public, Fiscal Year 1967" awarded by then Treasury Secretary Henry H. Fowler. Cohen, noting that IRS relied on personnel recruited from the Department of Defense (Since they were the only ones who had computers), calls one of his greatest accomplishments at IRS the installation of the computer system "without a major disaster."
• Lawrence B. Gibbs (1986-1989). With over 50 years of experience in federal tax, Lawrence B. Gibbs, a member of Miller & Chevalier, served as Commissioner of Internal Revenue from 1986 to 1989 after being selected by President Ronald Reagan. Gibbs walked into IRS facing two huge challenges: a glitchy computer software system following a bungled 1985 install, leaving IRS unable to process tax returns, pay refunds, or initiate audits; and implementing a complete overhaul of the Tax Code under Tax Reform Act of 1986 (downloads as a pdf). Gibbs considers his response to those challenges, as well as collaboration with the Treasury Department and Congress to revise tax penalty provisions of the Code, his greatest accomplishments at IRS (for more on the penalty provisions issue, check out this interview, downloads as a pdf).
• Fred T. Goldberg Jr. (1989-1992). Fred Goldberg is a partner at Skadden, Arps, Slate, Meagher & Flom LLP, where he returned in 1992 after serving as Commissioner of Internal Revenue. Goldberg, who had been Chief Counsel at IRS for years, was chosen to serve as Commissioner by President George H.W. Bush. Goldberg is perhaps best remembered for meeting with David Miscavige, the leader of the Church of Scientology (and good friend of Tom Cruise), which resulted in a controversial tax exemption for the organization. Goldberg has referred to his years at IRS as "a thrilling, rewarding, and humbling chapter of my life."
• Shirley D. Peterson (1992-1993). Nearly 130 years after the appointment of first Commissioner of Internal Revenue (though IRS was called Internal Revenue Bureau at the time), President George H.W. Bush selected Shirley D. Peterson as the first female IRS Commissioner. During her short tenure at IRS, Peterson made compliance issues a priority, including targeting non-filers. A former president of Hood College in Maryland, Peterson currently sits on the boards of several companies, including Goodyear Tire and Rubber Company.
• Margaret M. Richardson (1993-1997). Margaret M. Richardson, currently an attorney with O'Connell Soifer, was appointed Commissioner of Internal Revenue by President Bill Clinton in 1993. While Peterson might have been the first woman to be named IRS Commissioner, Richardson became the first woman promoted to executive rank in the Office of Chief Counsel, serving that position in the 1970s. Peterson faced a number of challenges during her tenure as IRS Commissioner, including a pair of government shutdowns in 1995 and 1996. Richardson called attention to the need to modernize the agency in 1994, saying, "You cannot implement a 1990s tax law with a 1960s computer system." Richardson was also an advocate for more funding IRS, noting, "We can't just take across-the-board cuts in government and expect the tax system not to be adversely impacted... Ninety-five percent of the government revenue comes in through the tax system."
• Charles O. Rossotti (1997-2002). Currently an Operating Executive for the Carlyle Group, Charles O. Rossotti served under President Bill Clinton as Commissioner of Internal Revenue from 1997 to 2002. With a background in technology, Rossotti made strides to upgrading computer systems at IRS, while also providing better customer service. When he was departing the agency in 2002, he warned that IRS was losing the war against tax cheats since, "Basically, demands and resources are going in the opposite direction." Not funding IRS with the dollars they need, he says, is "systematically undermining one of the most important foundations of the American economy."  In 2005, Rossotti was asked to serve on the President’s Advisory Panel on Federal Tax Reform under President George Walker Bush (you can read the panel's report and recommendations here).

Of recent IRS Commissioners who are still living, not including those who were Acting Commissioners, only Douglas H. Shulman (2008-2012) and Mark Everson (2003-2007) did not sign the letter. Commissioner Koskinen, of course, did not sign the letter since he is still part of the administration; however, he has previously voiced concerns about the cuts in the IRS budget.

You can read a copy of the letter here.

You can read more about the letter from my colleague, Peter J. Reilly, here.