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Regulation and Compliance > Federal Regulation > IRS

Republicans cut off IRS nominee hearing

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WASHINGTON (AP) — Republicans today protested Democrats’ recent change in the Senate nominee confirmation process by disrupting a Senate Finance Committee confirmation hearing for John Koskinen.

Koskinen is President Barack Obama’s nominee to be the head of the Internal Revenue Service (IRS).

The IRS, an arm of the U.S. Treasury Department, is supposed to help administer the new Patient Protection and Affordable Care Act (PPACA) premium tax credit program and other tax-related PPACA programs and provisions.

The Senate has followed a tradition that lets one opponent of a nomination keep a nomination from getting to the floor for a vote with a filibuster, or a continuous round of debate. To end a filibuster, supporters have had to round up 60 votes.

In November, Democrats decided to break with tradition and let the Senate end a filibuster over an executive branch nomination and most judicial nominations with a majority vote. The change does not apply to bills or to Supreme Court nominations.

Republican senators protested the change in rules today by cutting the Koskinen hearing short, by invoking a little-used rule that prohibits Senate committees from meeting later than two hours after the Senate starts its daily session. The Senate opened at 10 a.m., so the Finance Committee’s hearing, which was interrupted by several votes in the Senate floor, was abruptly stopped at noon.

In the past, committees have routinely waived the hearing cut-off rule.

In spite of the sudden end of the hearing, it appears likely the Senate will confirm Koskinen — a 74-year-old turnaround specialist — to a five-year term, which would last beyond Obama’s stay in office.

Both Sen. Max Baucus, D-Mont., chairman of the Finance Committee, and Sen. Orrin Hatch, R-Utah, the committee’s top Republican, said they support Koskinen’s nomination.

Baucus, a Montana Democrat, said he will re-schedule the conclusion of Koskinen’s hearing. Baucus said he hopes the committee will quickly approve Koskinen’s nomination, sending it to the full Senate. The IRS has been without a confirmed commissioner for more than a year.

“Mr. Koskinen has a history of succeeding in demanding roles,” Baucus said. “He is the right person to take on this challenge, and with filing season approaching, the IRS needs its leader in place.”

The IRS came under fire in May when agency officials acknowledged that agents had improperly targeted Tea Party and other conservative groups for additional scrutiny when they applied for tax-exempt status. The Justice Department and three congressional committees, including the Finance Committee, launched investigations.

The investigations, which are ongoing, have shown that IRS workers in a Cincinnati office started singling out conservative political groups in the spring of 2010, and continued to do so until 2012. IRS supervisors in Washington oversaw the targeting, but there has been no evidence released so far that anyone outside the IRS knew about the targeting or directed it.

After the targeting became public, Obama demanded the resignation of the acting IRS commissioner and several other top officials were removed from their positions or allowed to retire. The commissioner in charge of the agency when the targeting occurred, Douglas Shulman, left last year when his term expired. Shulman was a Bush appointee.

Obama nominated Koskinen, a retired corporate and government official with experience managing numerous organizations in crisis, to take over the IRS in August.

While the confirmation hearing was still under way, Koskinen told senators he will work to restore public trust in the agency.

“In every area of the IRS, taxpayers need to be confident that they will be treated fairly, no matter what their background or their affiliations,” Koskinen said. “Public trust is the IRS’ most important and valuable asset.”

Hatch said he expects Koskinen to fully cooperate with congressional investigations into the agency’s targeting of Tea Party groups. Koskinen said he would.

“As far as I’m concerned, the top priority for the next IRS commissioner should be to restore the agency’s damaged credibility with the American people and their trust that the actions taken by the IRS are fair and impartial,” Hatch said.

During the hearing, Koskinen also talked about PPACA implementation. He said that he thinks the IRS has prepared well for PPACA administration duties but needs a bigger budget.

“The IRS will have 11,000 fewer people working during this upcoming filing season while processing the largest number of returns in its history,” Koskinen said. “I don’t care how efficient you become, that is not a recipe for success or improved compliance and taxpayer service.

Koskinen has extensive experience in the public and private sectors. He came in to overhaul mortgage buyer Freddie Mac after its near-collapse in the financial crisis at the end of President George W. Bush’s administration. He also helped restructure the assets of the largest failed life insurance company in U.S. history, Mutual Benefit Life, and helped reorganize the Penn Central Transportation Company after it became the largest bankruptcy in U.S. history.

He worked with insurance regulators and insurance company executives in the late 1990s, when he helped U.S. companies cope with the threat of Year 2000 computer problems.

Allison Bell contributed information to this report.

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