Democrats apparently are convinced we’re a nation of tax cheats. The same people who have repeatedly claimed there is no election fraud think that large swaths of the public, especially high-income Americans and corporations, are not just avoiding taxes, which is perfectly legal, but cheating the government out of hundreds of billions of dollars in federal income tax obligations.
Hence the Inflation Reduction Act’s (IRA) windfall handout to the Internal Revenue Service (IRS). But the law’s provisions raise some important questions.
The focus so far has been on how many new employees the IRS will hire: apparently there will be 87,000 of them. They will work in a range of agency positions, but the one getting the most attention are the new enforcement hires.
But perhaps a more important question is whom the IRS will hire.
Remember Lois Lerner? She’s the former IRS official and “central figure in a scandal that erupted over whether the tax agency improperly targeted conservative political groups,” as Politico put it at the time.
In 2013 she was caught impeding and stonewalling conservative and Tea Party groups’ applications for non-profit status. She initially blamed IRS employees operating in the states, but it soon became clear she was the ringleader.
When called before Congress in March 2014, she pleaded the Fifth Amendment to avoid incriminating herself. The Obama administration’s Department of Justice (DOJ) unsurprisingly decided not to prosecute her, and she was allowed to retire with her benefits intact.
But that’s not all. Politico reported in 2015: “Last June, more than a year into the investigation, the IRS announced it lost two years’ worth of Lerner’s emails in a 2011 computer crash. The agency said the emails were not recoverable because it had recycled her hard drive and written over relevant backup tapes.”
It seems like a whole lot of important emails have been conveniently lost during Democratic administrations when potential criminal investigations of Democrats arise.
Was the Lerner scandal an isolated occurrence? Emily Brooks of The Hill recently reported on all the incidents that have led Republicans to distrust the FBI, including the FBI’s Lisa Page and Peter Strzok’s efforts to undermine President Trump and another FBI agent’s lies to the FISA Court.
Given that the IRS and FBI, and perhaps the DOJ, seem to have had a number of high-ranking officials who were actively seeking to undermine conservatives and their organizations, conservatives have every reason to be skeptical of thousands of new IRS hires.
President Biden and virtually every Democrat who voted for the IRA said the new IRS agents will only target tax filers with incomes above $400,000. But the Congressional Budget Office (CBO) begs to differ.
The CBO has recently released a letter to Sen. Mike Crapo (R-Idaho) estimating that some $20 billion of the projected revenue increase will come from people making under $400,000. Even Treasury Secretary Janet Yellen is hedging her statements.
But there may also be a political purpose for hiring all the new IRS enforcement agents.
The fact is the tax code has grown so large and complex, especially for large corporations, that IRS agents with a vendetta could accuse, or at least insinuate, that individuals or companies had violated the tax code when they had done nothing wrong.
One way Washington makes life difficult for individuals and companies is its power to investigate, especially political enemies and those who haven’t paid homage to the party in power. The IRS enforcement windfall opens the door for countless investigations that may or may not be about real tax evasion.
While the IRS occasionally finds wealthy individuals and large corporations that cheated on their taxes, the real threat to most people from the IRS’s enforcement expansion is the fear of being accused of being a tax cheat. Everyone will remember the accusation; few will recall the vindication.
And few of the accusers will ever be held accountable. Just ask Lois Lerner.
Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas. Follow him on Twitter @MerrillMatthews.