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Tea party investigation: Is the problem the IRS or the tax code? (+video)

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That angry disposition certainly matches the attitude on Capitol Hill, where House Speaker John Boehner (R) of Ohio said that jail time, not resignations, would be the true measure of accountability.

But the IRS, despite its troubling performance in the matter at hand, is otherwise playing a losing hand.

First is an issue of dollars.

“The tax code has become unmanageably large, and there hasn’t even been an attempt to keep the IRS paced with that,” in regard to funding, says Lloyd Mayer, a professor of law at Notre Dame University in South Bend, Ind.

For that reason, Nina Olsen, the nation’s taxpayer advocate, argued in congressional testimony last week that since her tenure began with the IRS in 2001 she has “never been more concerned” about its ability to advise taxpayers and accurately collect taxes.

Spending reductions mandated by the sequester and the tripling of new applications for 501(c)4 status (the provision in question in the current scandal) accentuate the agency’s problems, says Nina Crimm, a law professor at St. John's University in New York.

“They are totally overwhelmed,” says Professor Crimm. “They don’t have sufficient manpower to really cull through [nonprofit applications] and thoughtfully work this whole thing out.”

Beyond budget problems, there’s another good reason why the IRS should get out of the business of adjudicating the tax status of political groups, argues Professor Mayer. The agency has been purposefully held away from politics and is not equipped to handle political issues.

“The IRS is badly suited to deal with these fast-moving, politically sensitive types of disputes,” Mayer says. “Partially because it is so politically insulated to make sure it’s not abused, it also has a tin ear when it comes to politics. It doesn’t recognize when it’s dealing with a politically sensitive thing and, when it does, it doesn’t handle it right.”

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