Congressional Democrats and President Biden spent $80 billion to increase the size and power of the IRS but included zero new taxpayer protections. House Republicans have proposed a trim of $14.3 billion.
Here are 10 reasons to reduce the IRS supersizing:
1. IRS just inked a contract to shovel up to $2.6 billion of taxpayer funds to the firm that employed the IRS thief who stole thousands of Americans’ private tax files and gave them to a progressive group. According to RealClearInvestigations and The Washington Examiner, the man responsible for the worst theft in IRS history was working for Booz Allen. The thief gave the documents to the progressive group, Pro Publica, which unveiled the stolen material on the very same day Democrats ramped up a tax hike campaign.
The thief also stole many years of Donald Trump’s tax files and gave them to the New York Times.
The Booz Allen firm recently touted its new contract with the IRS worth up to $2.6 billion. Are taxpayers expected to trust this decision?
And the Biden DOJ has cut a Hunter Biden-style sweetheart deal with the thief who committed thousands of felonies – and obstructed the criminal investigation into the theft – by charging him with only a single count.
Between the enormous contract with Booz Allen and the lack of punishment for the IRS thief, this is a clear signal the Biden administration and the IRS does not take taxpayer privacy seriously.
Biden’s message to progressive IRS employees tempted to steal your files: go ahead and steal everything in sight because if we catch you, you’ll only face a single charge.
2. Even the Obama-appointed IRS chief John Koskinen said the $80 billion IRS supersizing was too much. Regarding Democrats’ $80 billion IRS supersizing request, Koskinen in April 2021 told the New York Times, “I’m not sure you’d be able to efficiently use that much money.”
Koskinen added: “That’s a lot of money.”
3. IRS is still stonewalling congress regarding its intentional destruction of 30 million taxpayer documents. The IRS still will not reveal its internal decision memo detailing its decision to intentionally destroy 30 million tax forms submitted by taxpayers attempting to resolve their taxes. The documents were destroyed at the Ogden, Utah facility and the IRS tried to get away with it without notifying anyone. But they got caught during an onsite visit from the Treasury Inspector General for Tax Administration.
After getting caught, the IRS claimed that no taxpayer would face negative consequences as a result of the destruction of the 30 million documents. But as reported by Tax Notes on Aug. 28, 2023 taxpayers received audit letters wherein the IRS accused taxpayers of failing to file their tax forms — as in, the same forms the IRS had destroyed.
As noted by Tax Notes:
“The decision by the IRS to expunge 30 million information return documents — mostly third-party income reporting on Forms 1099 — meant the agency didn’t have records to match income reported by thousands of low- and middle-income taxpayers claiming EITCs. But it continued auditing those taxpayers for ‘missing’ Forms 1099 anyway.”
The volume of material destroyed by the IRS is considerable: if stacked in a single pile, 30 million pieces of paper would reach a height of two miles. IRS has not revealed the manner of destruction but possibilities include incineration, landfill dumping, or industrial shredding.
If a taxpayer intentionally destroyed an information return along the lines of what the IRS did, the taxpayer would face a penalty of $630 per destroyed form, with no limit. So if the IRS were to hold itself to the same standard, it would owe the taxpayers $18.9 billion in penalties (30,000,000 X $630).
4. IRS got caught illegally backdating penalty documents and signatures in U.S. Tax Court in order to run up the bills on taxpayers. The court caught the IRS lying.
While testifying to congress last week, IRS Commissioner Werfel declined to say whether anyone has been fired for this practice. It is suspected the backdating incident was not an isolated occurrence within the IRS. Another indication that the IRS has a severe accountability problem that is only going to get worse after getting rewarded with $80 billion from Democrats.
5. IRS is retaliating against whistleblowers on the Hunter Biden tax dodging case. From July 19, 2023 congressional testimony:
“Since I made these disclosures that are legally protected, the IRS has chosen to retaliate against me in multiple ways.” – IRS agent / whistleblower Gary Shapley.
6. IRS without congressional authorization is inserting itself as tax preparer. IRS CommissionerWerfel repeatedly asserted that the IRS was simply doing a “Direct File” feasibility study as authorized by the Inflation Reduction Act. Werfel assured congress and the American public that he’d wait for the report and “reflect” with congress before making any decisions.
In reality, the IRS was secretly working the entire time on building a prototype software system with plans for a 2024 launch, as revealed in a Washington Post scoop on May 15, 2023.
Congress did not give the IRS the authority to do this. The Inflation Reduction Act authorizes at least a half-dozen pilot programs in other areas of the federal government. The bill does NOT authorize a pilot for Direct File. If it wanted to do so, congress would have included pilot program language in the bill text.
In addition to being legally problematic, Werfel’s actions send a clear message that the IRS is not interested in addressing its longstanding trust and credibility problem.
7. An IRS agent paid an “unannounced and unprompted” visit to the home of journalist Matt Taibbi on the same day he was in Washington D.C. testifying about government abuse. In a March 27, 2023 letter, Chairman of the House Judiciary Committee Jim Jordan (R-Ohio) revealed that an IRS agent had visited the home of journalist Matt Taibbi on the very same day Taibbi testified before Congress. The IRS visit to Taibbi’s personal residence was “unannounced and unprompted.” Jordan’s letter is here.
Taibbi is a longtime progressive journalist who in 2018 was praised by Bernie Sanders for his fearless investigative journalism, for his “courage to take on some of the most powerful people in the world and write about it in a way that ordinary people can understand.”
But the moment Taibbi’s investigative work became inconvenient for Democrats, they questioned his journalistic credentials and an IRS agent visited his private home on the very same day he was testifying against government abuse.
8. IRS got caught opening a case on Taibbi on Christmas Eve 2022 – on a Saturday! The Jim Jordan investigative work revealed that the IRS opened up a file on Taibbi on Christmas Eve, 2022. This was a Saturday. This was during Taibbi’s investigative work on the Twitter files where he revealed the actions of various federal government entities. The IRS agent who opened the case file on Christmas Eve dug into Taibbi’s voter registration status and concealed carry gun permit status.
9. IRS Commissioner brushed off significance of Lois Lerner’s denial of non-profit status to conservative groups critical of then-President Barack Obama and then-Vice President Biden. As part of rebuilding trust with the public, it is important for the IRS to acknowledge the actions of the Lois Lerner-era IRS.
As noted by an Aug. 2015 Senate Finance Committee report, only ONE conservative group was granted nonprofit status by the IRS over a period of more than three years:
“Due to the circuitous process implemented by Lerner, only one conservative political advocacy organization was granted tax-exempt status between February 2009 and May 2012.”
But in an April 2023 Ways and Means committee hearing, IRS commissioner Werfel hand-waved away the scandal as merely an “allegation.”
10. IRS refuses to change its internal definition of “high-income” households, despite a Treasury Inspector General for Tax Administration request. TIGTA recommended the IRS update its definition of “high-income” households from its current definition (in place since 1976) of $200,000 per year in order to avoid an increase in audits of middle-income households and small businesses.
But the IRS refused, asserting that it needs “agility” to target whomever it wishes.
In other words, the IRS is not equipped to fulfill Biden’s supposed vow to avoid an increase in audits on households making less than $400,000.
TIGTA said: “There is no way to identify the complete population of taxpayers that meet the criterion of $400,000 or more specified by the current Treasury Secretary.”