Tuesday, November 30, 2021

REPORT: Biden Wants to Empower the IRS Despite Its Track Record of Trampling Rights and Violating Privacy

(Graeme Sloan/Sipa USA/Newscom)

Source: Reason

Published: November 26, 2021

By: Eric Boehm

  • The IRS' track record suggests that beefed up enforcement will also mean more trampling of Americans' due process rights.

President Joe Biden's plan to beef up IRS enforcement and snoop on Americans' bank accounts will require hiring more than 80,000 additional tax cops—expanding a federal bureaucracy with a long track record of flouting due process and undermining privacy.


As part of Biden's "Build Back Better" plan, the IRS would get $80 billion in additional funding over the next 10 years. The bulk of those new funds, nearly $45 billion, would be directed toward enforcement actions with the goal of doubling the number of annual audits of small businesses. By comparison, the bill spends a relatively meager $1.93 billion on improving taxpayer services, including education and filing assistance.

In short, for every new dollar the IRS will spend helping Americans understand the endlessly complicated federal tax code, the agency will spend roughly $23 new dollars on enforcing those same rules.


Everyone should pay the taxes they owe, of course, but the IRS' track record suggests that more enforcement will also mean more trampling of Americans' due process rights.

"It's a systematic practice at the IRS to violate due process and to abuse taxpayers," says Isabelle Morales, a policy specialist for Americans for Tax Reform, a conservative nonprofit that opposes tax increases. Biden is proposing to boost funding "for an agency that needs reform," Morales tells Reason, "and that will only lead to us fueling their bad practices."

In 2017, for example, an inspector general report found that IRS agents investigating so-called "structuring"—legal cash deposits that the agency believes to have been part of an attempt to skirt tax obligations—routinely failed to follow well-established procedures meant to protect the rights of individuals being investigated. Among other things, targets of IRS investigations are supposed to be told of the reason for the investigation and read their Miranda rights before an interview with an IRS agent. Of the 229 interviews reviewed by auditors, however, there were "only five" cases where targets were informed of their rights before speaking to investigators.

"Individuals and businesses who are not engaged in unlawful conduct may be less guarded in speaking with law enforcement about their banking transactions, and the absence of information about what their rights are might lead them to make statements that are later used against them," auditors wrote in the report.


Morales points out that the 2017 audit report is just one data point in a long line of similar behavior. The most well-known example of the IRS abusing its power, of course, is the 2012 scandal in which the agency was caught applying stricter scrutiny to conservative nonprofits.

But even when the IRS isn't engaging in outright political favoritism, there are reasons to worry about what expanding enforcement capabilities might mean for individuals and businesses. A 2016 inspector general report found that the IRS had lost track of more than 1,000 computers that might contain sensitive taxpayer information. A year later, an audit found that the IRS had recently rehired at least 200 employees who were previously fired for conduct or performance issues.

Biden is pitching his plan for enhanced IRS enforcement by promising that it's all about ensuring billionaires pay what they owe.


Read more at: Reason.com
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