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  • Writer's pictureThe San Juan Daily Star

More money for IRS spurs conspiracy theories of ‘shadow army’

The Internal Revenue Service building in Washington.

By Alan Rappeport and Tiffany Hsu

It has been called President Joe Biden’s “shadow army,” described as a strike force to shake down small businesses with assault rifles and likened to a militia of auditors on search-and-destroy missions.

Decades of Republican antipathy toward the Internal Revenue Service have reached new levels of enmity with the passage of a Democratic-backed bill that gives the agency $80 billion to beef up its ability to go after tax cheats. The legislation, which Biden signed into law this week, will allow the beleaguered agency to hire more than 80,000 employees, upgrade outdated technology systems and improve its ability to respond to taxpayers.

The agency’s staff is the same size today as it was in 1970, when it processed far fewer individual tax returns. Its enforcement staff has fallen more than 30% since 2010, and audits of millionaires have declined more than 70%. As of late June, millions of taxpayers were still waiting for the agency to process their 2021 tax returns.

But Republicans, who have long accused the IRS of unfairly targeting conservatives, have seized on the law to fan unfounded conspiracy theories about the threat that mom-and-pop shops and middle-class Americans will face from an emboldened tax collector.

The scale and speed at which rumors about the agency have spread portend the political and logistical challenges that the Biden administration will confront as it embarks on the biggest overhaul of the IRS since its inception. From Twitter and TikTok to newsletters and cable news, Republicans have embraced the notion that a bigger IRS is poised to be weaponized against them, often distorting facts to make their points.

“This has become the lightning-rod issue that’s really aggravated and activated conservative activists around the country,” said Stephen Moore, a conservative economist affiliated with FreedomWorks, a right-leaning organization that promotes small government. “I think it’s a total outrage.”

Moore, whose personal fight with the IRS surfaced in 2019, has been leading a group of conservative activists in an attempt to “kill the bill” for nearly a year. Now that it has passed, Republicans have amped up their efforts to demonize the IRS, including misconstruing how big it will grow and what new employees will be doing.

“Stop Biden’s shadow army of 87,000 IRS agents,” Sen. Ted Cruz, R-Texas, blared on Twitter last week with an ominous ad recalling the agency’s targeting of Tea Party groups set against the sound of soldiers marching.

Sen. Chuck Grassley, R-Iowa, a member of the Senate Finance Committee, warned Fox News viewers last week that the new IRS agents, a small percentage of whom are allowed to carry firearms, might be coming with loaded “AK-15s” and “ready to shoot some small-business person in Iowa.”

“I think they’re going after middle-class and small-business people,” Grassley said. “With 87,000 additional employees, you can imagine what that harassment is going to be to middle-class Americans and our small-business people.”

The IRS is beefing up its staff to keep pace with the growth in taxpayers and to replace departing employees. The Biden administration expects that about 50,000 IRS. employees will retire within the next decade and that the agency will hire 87,000 new employees, bringing the overall size of the agency to around 120,000. The number of enforcement agents is expected to double to about 13,000 from 6,500 over the next decade.

And despite claims on social media that the IRS hires will be heavily armed, a Treasury official said that just 1% of the new employees would be agents working in jobs that require carrying guns.

Still, the IRS recently altered a job posting for criminal investigators amid the backlash, deleting that one of the role’s major duties was to “be willing to use deadly force, if necessary.” The amended ad now lists “Be legally allowed to carry a firearm” as a key requirement.

“The wording change on one webpage followed continued misstatements and inaccuracies about IRS employees carrying weapons,” said Khaalid Walls, an IRS spokesperson.

Republicans have been eager to fan fears about a scaled-up IRS ahead of midterm elections, which will determine which political party controls Congress.

Rep. Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, said this week that families making less than $75,000 would face 710,000 additional audits, suggesting that the Biden administration had lied about its pledge to not increase audit rates of taxpayers who make less than $400,000. Brady also suggested that the IRS would have to target middle-income families to generate the kind of tax revenue that it has assumed the new law will generate.

“Middle-class families ought to be frightened,” he said on Fox News.

Right-wing outrage over the search of the property dovetailed with the charged language about war and dictatorship that has been circulating for weeks on platforms like Truth Social and helped amplify the IRS backlash, said John Scott-Railton, a senior researcher at the Citizen Lab at the University of Toronto’s Munk School of Global Affairs and Public Policy.

“It was a piece of disinformation that was floating around and salient at the time that involved government overreach,” he said.

Mentions of the IRS and its hiring plans, already elevated after Biden discussed the Inflation Reduction Act in late July, surged 254% after the Mar-a-Lago search compared to the week before, according to data from Zignal Labs. Chatter around “armed IRS” and “IRS firearms” on social media, online forums, broadcast channels and traditional media increased 1,044% and 532% after the search.

The IRS has acted inappropriately in the past, including unfairly targeting conservative groups that applied for tax-exempt status during the Obama administration. In 2013, the agency acknowledged that it had been singling out terms such as “Tea Party” and “patriot” as a shortcut for deciding if organizations were engaging in social welfare, which would qualify them for tax-exempt status, or if they might be political organizations. Former President Barack Obama called the agency’s actions “inexcusable” and ultimately demanded the resignation of the acting IRS commissioner. A 2017 report from the Treasury inspector general found that progressive groups had also been improperly scrutinized.

Still, for all the ads and rhetoric, it is not clear whether the message is resonating ahead of the midterms.

A poll conducted by the market research firm YouGov with The Economist magazine this week found that around half of Americans supported the bill that included the IRS funding when they were given a brief overview of what it contained. Around one-third of the respondents opposed it.

A separate survey from Morning Consult and Politico found that most voters are not worried about being audited by a beefed-up IRS because they think that high-income Americans will bear the brunt of the increase in audits.

John Koskinen, who served as IRS commissioner in the Obama and Trump administrations, said that he thought the attacks on the agency by Republican lawmakers were irresponsible and that he worried that they could lead to violence against members of the agency. He suggested that the only taxpayers who would end up having to pay more were those who were not paying their taxes, and said that agents do not wield their weapons without good reason.

“The idea that the IRS is going to show up and audit all sorts of people for the fun of it are either ignoring reality or just don’t know how the IRS operates,” Koskinen said. “Honest taxpayers, who are the vast majority, aren’t going to be bothered at all.”

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