WIRE

The IRS Scandal Should Scare the Heck Out of You. Here's Why.

It's not about politics. It's about a fundamental breach of trust.
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Of the many scandals swirling around Washington right now, one in particular should scare you most as an entrepreneur.

It's the news that the Internal Revenue Service applied blatantly political filters to its review of nonprofit organizations, and targeted conservative groups. Notwithstanding my colleague Gene Marks's recent take on this, I think this a very big deal--and a fundamental breach of the public trust.

I know a bit about the IRS from personal experience. A dozen years ago I left my job as a Washington lawyer to follow a dream. I packed everything I owned in a used Kia Sportage and headed to Hollywood to be a screenwriter. I needed a "day job" while I attended UCLA's extension school and wrote scripts, so I put my law degree to work at the IRS Office of Chief Counsel, starting at the federal building in downtown Los Angeles.

There were some good people among my colleagues there, and I'm still friends with a few of them. However, the overall bureaucratic atmosphere and culture of micromanagement I encountered at the IRS was stifling, even degrading to my way of thinking. It was a horrible professional fit.

In the end, I left both the IRS and Hollywood, served in the U.S. Army JAG Corps, and then launched a different writing career. The life lessons I learned could easily fill another column, but for now I want to focus on one of my takeaways from working at the IRS.

It's this: Society needs bureaucracy.

Let me explain. Think about how much you enjoy dealing with big government bureaucracies--the Department of Motor Vehicles, the different regulatory agencies that affect your business, or of course, the IRS. Now, imagine who it is that actively seeks to work there.

Some of these workers are truly decent people, of course, but a career government bureaucrat is almost the professional polar opposite of an entrepreneur. He or she likely values stability and security and excels at performing routine processes over and over again. Some of the processes might be very complex, but by their nature they are supposed to become routine.

In other words, career government bureaucrats give up the chance at a unique, extraordinary professional career in exchange for something predictable. They buy into a system in which seniority and longevity are at least as important to personnel decisions as proficiency (to say nothing of dynamic new ideas).

Some may love the work, although many of my government colleagues were there mainly to gain experience before going into the private sector. Others appreciated the jobs because they wanted to focus on their families, or their hobbies. (Granted, a few others were career dead-enders of the worst stereotype--bitter, boring drones who put in their 37-1/2 hours a week, complained endlessly, and spent more time on office politics than work.)

Regardless, the rest of us, in exchange for giving these people almost limitless job security and generous pensions, are supposed to get something very specific in return. We're supposed to get predictable, even-handed enforcement of society's rules. The entrepreneurs among us count on that even-handedness in order to be able to make good decisions.

In other words, the line at the DMV might be long, but it's supposed to be equally long for everybody. The forms you have to fill out to comply with government regulations might be a pain in the neck, but they're supposed to be the same even-handed, predictable pain in the neck for you and for your competitors.

And, the process of getting through an IRS examination might be slightly less pleasant than root canal without anesthesia, but it's supposed to be even-handedly, predictably unpleasant for everyone, regardless of their background or political persuasion.

I was never naive enough to think that government processes were totally absent personal feelings, but the idea that IRS workers introduced systemic political bias into their work is abhorrent. I'm honestly not sure whether it's more damaging if the direction to do so came from on high or was the result of the personal biases of a few lower-level bureaucrats.

Regardless, it's a blatant violation of trust, and the episode reminds us that if itxc2xa0can happen at the IRS, it can happen at any government bureaucracy. I hope the other government workers investigating this whole thing keep that in mind as they work.

Then, I hope they figure out exactly who's responsible--and, even handedly and predictably--throw the book at them.

IMAGE: agrilifetoday/Flickr
Last updated: May 16, 2013

BILL MURPHY JR. | Columnist

Bill Murphy Jr. is a journalist, ghostwriter, and entrepreneur. He is the author of Breakthrough Entrepreneurship (with Jon Burgstone) and is a former reporter for The Washington Post.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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