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Outgoing IRS chief ‘deeply concerned’ about cuts to already strained agency

IRS Commissioner John Koskinen has been a lightning rod for Republican lawmakers who have called for his impeachment and criticized the agency he’s been running since 2013. As one of the last Obama administration holdovers, he’ll complete his term this Sunday. Koskinen sits down with Judy Woodruff to discuss the strains on the IRS and President Trump’s controversial tax returns.

Read the Full Transcript

  • Judy Woodruff:

    As Republicans try to pass a tax overhaul, the IRS is once again expected to be in the spotlight.

    For years, Commissioner John Koskinen has been a lightning rod for Republican lawmakers, who have called for his impeachment and criticized the agency he’s been running since 2013.

    As one of the last Obama administration holdovers, he will complete his term as the IRS commissioner this Sunday.

    I sat down with him yesterday, and we talked about the strains on the IRS, his thoughts about the agency, and President Trump’s controversial tax returns.

    John Koskinen, thank you very much for talking with us.

  • John Koskinen:

    I’m delighted to be here.

  • Judy Woodruff: 

    So, how do you feel about leaving this job?

  • John Koskinen:

    It’s a poignant time. I have had, actually, surprisingly enough, a wonderful time at the IRS. It’s a great group of people to work with, and I’m going to miss them.

  • Judy Woodruff:

    Well, as you know, there are some Republicans in the Congress who have been calling for your head practically since the day you arrived.

    You came in the midst of this dispute over whether the IRS had been unfairly scrutinizing applications for non — for tax-exempt status on the part of Tea Party groups, and there was a lot of discussion around that.

    Did you feel you came in almost at a time of being under siege?

  • John Koskinen:

    It was pretty close to that.

    In my history as such, I usually get called in when agencies are under great stress, and so this certainly met that criteria.

  • Judy Woodruff:

     Did you ever feel your job was in jeopardy from this criticism?

  • John Koskinen:

    Again, I thought there were a lot of very thoughtful, responsible congressmen in both parties who understood that I had not personally created this problem and that I was doing the best anybody could expect getting through it.

    So, the move to impeach me, I thought, was probably not going to succeed.

  • Judy Woodruff:

    You had been in several years when President Trump was elected. He came into office. I think some people thought, initially, well, he’s going to make a change at the IRS, but, lo and behold, he didn’t.

    And it turns out the two of you have known each other a long time. You go back, what, four decades. You knew each other in business.

  • John Koskinen: 

    Correct. I negotiated with him the first transaction he ever did as an individual outside of Brooklyn.

  • Judy Woodruff:

    What was it like to deal with him?

  • John Koskinen:

    He was young. He was 29 at the time. I wasn’t much older.

    We spent several months negotiating the sale of the Penn Central’s Commodore Hotel to him, which is he turned into the Grand Hyatt, which sits on top of Grand Central. And, as I have said, he was energetic, irrepressible. He was a pleasure to deal with. We actually negotiated hard for a long time, but we enjoyed it.

  • Judy Woodruff:

    Did you stay in touch with him over the years?

  • John Koskinen:

    I have talked to him, I have seen very occasionally over the time.

    He’s been kind a couple of times along the way to make positive comments about me, but we haven’t seen each other regularly.

  • Judy Woodruff:

    This is a president who has not made public his own tax returns.

    We know or we have read, because you have said so, that they are kept in a certain place inside the IRS facility. Do you know where they are?

  • John Koskinen:

    I know generally where they are. I haven’t seen — they’re in a locked room in a locked cabinet near my office, but I have actually not seen either the room or the Cabinet.

  • Judy Woodruff:

    So you haven’t seen the returns?

  • John Koskinen:

    No, I actually have no authority to see anybody’s returns.

    We are very careful in the IRS. No one can look at anyone’s return unless they have a specific need to know as part of an audit.

  • Judy Woodruff:

    Is it normal for a president’s taxes to be kept in a special place? I mean, what — how did they happen to be where they are?

  • John Koskinen:

    Actually, all the president’s returns are kept in that famous locked cabinet in the locked office.

    They are separated out, because we feel very strongly they need to be handled separately. They need to be protected.

  • Judy Woodruff:

    So, as soon as they are elected, this happens automatically? Is that what you’re saying?

  • John Koskinen:

    Yes. And so, even in this case, a year-and-a-half ago, in the summer of 2016, I asked our people to make sure that, for all the candidates, once the nominees were known, that we protected their existing tax returns, as well as being prepared for the filing of their next tax returns.

  • Judy Woodruff:

    Do you have an opinion, John Koskinen, about whether President Trump should have made his tax returns public?

  • John Koskinen:

    I don’t think that’s a position the IRS commissioner should take. I think that’s a decision the president makes on his own.

    We respect that decision. Our goal is to, in fact, ensure the privacy of everyone’s tax returns and tax information.

  • Judy Woodruff:

    As you leave — and we have talked to you about this when I have interviewed you in the past — you have expressed concern over the years about how much strain has been placed on the IRS.

    You have been concerned about budget cuts, about losing employees. How stretched is the Internal Revenue Service right now?

  • John Koskinen: 

    Well, my farewell tour of the Hill over the last four to six weeks has been to advise them or warn them that I am deeply concerned that we have cut the agency far more than it can and should be cut if it is going to continue to function effectively.

    It’s either its I.T. system is going to fail. And it’s running an antiquated system, out of date in many ways. And we won’t be able to do the processing of filing season. Or, as we continue to do fewer audits, the compliance system will erode, and that will cost the government billions of dollars.

  • Judy Woodruff:

    Of course, you’re leaving just as the Congress is discussing the president, the Republicans’ proposal to reform the tax code.

    Again, major — they’re calling for a major overhaul. How do you look on that?

  • John Koskinen: 

    Well, I think and I have always thought that the tax code is far too complicated and far too difficult for taxpayers to navigate their way through.

    So, we have been clear from the start that, while we don’t have, again, an interest in any of the policy decisions, anything that can be done to simplify the code for taxpayers, we would strongly support.

    So, in this case, you can’t do significant tax reform without providing the agency the financial resources it needs to actually implement it. But there is no doubt it would be and will be the highest priority of the all of the employees.

  • Judy Woodruff:

    So, finally, to all those Americans who curse the IRS on April the 15th or at other times of the year, what do you say to them?

  • John Koskinen:

    Well, first, they have to remember the taxes they pay fund the operations of the government.

    And the IRS, notwithstanding the views a lot of people have, spends a significant amount of its time trying to help taxpayers figure out how much they owe and how to pay it.

    I have often said, if you’re having difficulty with your taxes, you don’t have to hire somebody off late-night TV to help you. We’re anxious to help those who want to become compliant.

  • Judy Woodruff:

    John Koskinen, stepping down as commissioner of the IRS, thank you very much.

  • John Koskinen:

    Thank you, Judy.

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