Democrats seem to believe we’re a nation of tax dodgers. The same people who have repeatedly claimed that voter fraud does not exist believe that large sections of the public, particularly high-income Americans and businesses, are not only avoiding taxes, which is perfectly legal, but are cheating the government out of hundreds of billions of dollars in Federal Income Tax Obligations.
Hence the guidance of the Inflation Reduction Act (IRA) to the Internal Revenue Service (IRS). But the provisions of the law raise some important questions.
So far, the focus has been on how many new employees the IRS will hire: Apparently there should be 87,000. You’ll work in a range of agency positions, but the ones that will draw the most attention are the new enforcement staff.
But perhaps a more important question is who the IRS will hire.
Do you remember Lois Lerner? She is the former IRS official and “a central figure in a scandal that erupted over whether the IRS inappropriately targeted conservative political groups,” as Politico put it at the time.
In 2013, she was caught obstructing and blocking nonprofit applications from Conservatives and Tea Party groups. She initially blamed IRS officials working in the States, but it soon became clear that she was the ringleader.
When called before Congress in March 2014, she pleaded for the Fifth Amendment to avoid self-incrimination. The Obama administration’s Department of Justice (DOJ), unsurprisingly, decided not to prosecute her and she was allowed to retire with her welfare benefits intact.
But that’s not all. Politico reported in 2015, “Last June, more than a year after the investigation, the IRS announced that it had lost two years’ worth of Lerner’s emails in a 2011 computer crash. The agency said the emails were unrecoverable because it recycled its hard drive and overwrote relevant backup tapes.”
It appears that many important emails have been conveniently lost during the Democratic administration when potential criminal investigations against Democrats are ongoing.
Was the Lerner scandal an isolated case? Emily Brooks of The Hill recently reported on all the incidents that have caused Republicans to distrust the FBI, including the efforts of FBI’s Lisa Page and Peter Strzok to expose the lies of President Trump and another FBI agent to the FISA to undermine the court.
Given that the IRS and FBI, and perhaps the DOJ, appear to have had a number of senior officials actively trying to undermine conservatives and their organizations, conservatives have every reason to be skeptical of the thousands of new IRS employees.
President Biden and virtually every Democrat who voted for the IRA said the new IRS agents would only target taxpayers with incomes over $400,000. But the Congressional Budget Office (CBO) sees it differently.
The CBO recently released a letter to Sen. Mike Crapo (R-Idaho) estimating that about $20 billion of the projected increase in sales will come from people making less than $400,000. Even Treasury Secretary Janet Yellen backs her statements.
But there may also be a political purpose in hiring all new IRS enforcement officers.
The fact is that the tax code has become so vast and complex, especially for large corporations, that IRS agents could, with a vengeance, accuse or at least imply that individuals or corporations have broken the tax code when they did nothing wrong.
One way Washington makes life difficult for individuals and corporations is its investigative powers, particularly against political enemies and those who have discredited the party in power. The windfall of IRS enforcement opens the door to countless investigations that may or may not involve genuine tax evasion.
While the IRS occasionally finds wealthy individuals and large corporations who have cheated their taxes, the real threat to most people from the IRS’s expanded enforcement is the fear of being accused of being a tax evader. Everyone will remember the charge; few will remember the justification.
And few of the accusers will ever be held accountable. Just ask Lois Lerner.
Merrill Matthews is a resident scholar at the Institute for Policy Innovation in Dallas, Texas. Follow him on Twitter @MerrillMatthews.