FGI Files Suit Against IRS for Records on Former Lois Lerner Crony Nikole Flax

The IRS is again claiming they have no records from official in charge of hiring 87,000 agents.

October 12, 2023

(Washington, DC) – Today, the Functional Government Initiative (FGI) announced a transparency lawsuit against the Internal Revenue Service (IRS) for withholding records regarding former IRS official Nikole Flax while she was overseeing a major budget increase and hiring initiative.

In March 2021, President Biden signed the American Rescue Plan Act of 2021. This Act requires “third-party settlement organizations,” like PayPal, Venmo, Cash App, etc. to report individuals to the IRS who receive more than $600 through those services. The Inflation Reduction Act (IRA) of 2022 also earmarked $80 billion in funding to the IRS for increased tax enforcement and staffing, totaling 87,000 new employees. These laws significantly expand the power of the scandal-plagued agency.

Ms. Flax has held several high-level jobs at the IRS, including chief of staff during the scandal when IRS was targeting conservative organizations applying for non-profit status. Back then, an unfortunate “hard drive crash” (one of seven that curiously happened to IRS personnel linked to the scandal) kept congressional investigators and the press from inspecting her official records.

Hopefully, the IRS has availed itself of advances in personal computer and backup technology over the last decade because Ms. Flax more recently led the IRS’s IRA 2022 Transformation and Implementation Office, overseeing the implementation of the Inflation Reduction Act and hiring the new 87,000 IRS agents. In the interest of government transparency, it is to be hoped her emails are safe.

However, in February 2023, FGI filed a Freedom of Information Act (FOIA) request with the IRS for records from Flax related to implementing significant changes in tax enforcement, transaction monitoring, and other matters. Initially, the IRS responded that searches could not be conducted by keywords, and they could only search “subject lines” of emails, which preclude other types of records, such as text messages, letters, etc. The IRS then claimed that no records were located. FGI then appealed to the Independent Office of Appeals, which agreed that a reasonably adequate search was not completed. Since then, the IRS has continued to withhold records, thus prompting FGI to file suit.

Peter McGinnis, spokesman for FGI, issued the following statement:

“This isn’t the first time the IRS has claimed they can’t find records. When FGI first started an investigation into the IRS’ plan to hire 87,000 new agents, the agency claimed it had no records or analysis regarding the issue. After FGI filed suit, the IRS then magically said they likely have thousands of records. Now it’s happening again. You would think that an agency that exists to inspect the records of more and more U.S. taxpayers would at least make a show of being transparent itself.”