IRS chief addresses debunked claim that a flood of new ‘armed’ agents is coming

In the weeks since passage of the Inflation Reduction Act, one provision has generated more heat in certain corners of the internet than any other: an $80 billion infusion coming to the IRS.

The money is set to help the tax-collecting agency chase down cheats and refresh its shockingly outdated technology over the coming decade. But many critics on the right who say the agency is politically motivated contend the money will also make tax collectors a more pernicious presence in Americans’ lives.

One claim in particular has gained traction in right-wing circles: that the money would not only lead to a flood of 87,000 new IRS agents — but also that those agents will be largely armed.

Fact checkers have debunked the claim. But now the agency itself is pushing back directly in a new op-ed from IRS Commissioner Charles Rettig published on Yahoo Finance Thursday.

The viral claims are “absolutely false,” Rettig writes. He said his agency “is often perceived as an easy target for mischaracterizations of what IRS employees do — and that’s exactly what’s happened in recent weeks.”

IRS chief addresses debunked claim that a flood of new ‘armed’ agents is coming

Internal Revenue Service Commissioner Charles Rettig during congressional testimony earlier this year. (REUTERS/Emily Elconin)

During a Yahoo Finance Live interview on Thursday, Charles O. Rossotti, a former IRS commissioner, added that the armed IRS agent claims were “such nonsense” and he would “smile and laugh if it wasn’t so serious.”

The op-ed comes the same week the IRS announced a security review of its facilities around the country in the face of what Rettig says are concerns among his employees about their personal safety.

“We take threats seriously and their safety is a top priority,” says Treasury Secretary Janet Yellen, who oversees the IRS.

‘Not about increasing audit scrutiny’

The purpose of increasing funding for the IRS is relatively straightforward. Lawmakers are adding $80 billion to the IRS budget, which is then expected to have a hefty return on investment by bringing in over $200 billion in increased tax revenue.

The target is the the so-called “tax gap” — the difference between what taxes are owed to the government and what is actually paid. Estimates of the gap range from $280 billion to as much as $1 trillion annually as thousands of Americans who don’t want to pay their full tax bill find they can fly under the radar of the understaffed IRS.

But the bipartisan desire to fix that problem has run up against conservative suspicions of the agency that run far deeper than the universal dislike of handing over money to the government.

Many GOP criticisms are rooted in a controversy during the Obama administration when it was revealed that the agency had looked specifically at the tax-exempt status of political groups. Conservatives claimed the IRS targeted them, while a 2017 Treasury report on the controversy found that groups on both sides of the political spectrum had faced scrutiny.

Nevertheless, the suspicion has lingered and led conservatives to mobilize against increased funding in recent years — including removing it from last year’s Bipartisan Infrastructure law. But now, on a party-line vote, Democrats have made the new money a reality.

“You can bet your boots the tax-collecting agency is gearing up to conduct more audits,” Sen. Chuck Grassley (R-IA) said recently.

Lower- and middle-income Americans would be among those impacted, Grassley added, going on to claim the agency has a record of fiscal mismanagement.

Others have gone further. A favorite meme on the right in recent weeks is that the additional money will lead to 87,000 new IRS agents. Sen. Rick Scott (R-FL) repeated that claim and also added that the new hires would be “mostly armed”

Thursday’s op-ed from Rettig is apparently the agency’s first direct pushback against those specific viral claims.

“Less than 1% of new hires will be in our IRS Criminal Investigation (IRS-CI) area,” Rettig says, pointing to plans to only increase headcount there by about 300.

The new hires there will focus on illegal activities such as money laundering and terrorist financing, and not audits of everyday Americans.

A job description for IRS agents in the criminal investigation area — which does describe being armed — apparently spurred the fear of weaponized agents repeated by figures ranging from Republican lawmakers to Elon Musk.

Rettig says that overall, the vast majority of any new hires would focus on tasks such as answering phones at IRS headquarters and catching up on the IRS’s massive backlog of unprocessed claims.

“The top priority is to just to get service back,” says Rossotti, adding that right now it’s a “really sad situation [with] the IRS answering maybe 10% of the phone calls that it gets and the backlog is huge.”

“These resources are absolutely not about increasing audit scrutiny on small business or middle-income Americans,” Rettig writes.

The agency will not raise audit rates to rise for households making under $400,000, he said. In fact, he said, regular taxpayers would see better customer service as a result of the upgrades. The IRS has long pushed back against claims that more money would lead to more audits of regular Americans.

The agency has promised more details in the coming months on how it will spend the money.

Ben Werschkul is a Washington correspondent for Yahoo Finance.

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