IRS reverses “no records” claim, admits they have records on 87,000 new agents

The IRS previously and repeatedly stated that they had no records on the controversial budget increase.

January 23, 2023

(Washington, DC) – Today, the Functional Government Initiative is announcing a significant development in our investigation into the Biden Administration’s plan for an $80 billion increase to the IRS budget to hire 87,000 new agents, as well as their proposal to require taxpayers to report transactions that total as little as $600. After FGI filed suit against the Treasury Department and the IRS, the IRS walked back claims of having no records about the massive budget increase. In court filings, they have now admitted that they do likely have thousands of records on these issues.

In February 2022, FGI launched an investigation into the Biden administration’s controversial IRS proposal for the budget increase, additional agents, and other supposed enforcement measures, as well as their plan for lowering the mandatory reporting threshold. FGI received an alarming response: the IRS stated they had no records or analysis regarding the proposal for these controversial policy items. Finding this to be impossible and believing that an adequate search was not conducted, FGI appealed the response through the administrative process. The IRS denied that appeal and, for a second time stated that no such records existed. Only after FGI filed a suit against the IRS did the agency signal that they do, in fact, have the records that they previously denied possessing.

The initial lack of transparency from the agency tasked with collecting taxes from Americans raises several questions and concerns. Why did the IRS take almost nine months to admit they had records? Were records properly kept as required by the Federal Records Act? What will these records these show us about the IRS’s plans to further surveil Americans’ finances with its 87,000 new agents? Did the IRS really not conduct any analysis of the controversial change to lower the bank reporting requirement to $600, which will impact millions of taxpayers and force peer-to-peer payment systems such as Venmo, PayPal, and Zelle to send tax forms to individuals with small-dollar transactions? Our mission at FGI is to shine a light on government dysfunction, and we will continue pressing the IRS and the Treasury Department in court to release the information the public has a right to review.

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

“What do you know? The IRS budget proposal for 87,000 new agents at a cost of $80 billion did not just appear out of thin air. Based on the 8,000 documents and 150,000 potentially responsive pages exposed in litigation, this type of record-keeping would land most Americans in hot water or worse. Yet, FGI’s success is hardly worth cheering for as the battle for transparency is just beginning in what appears to be a long legal fight ahead. Sadly, the American public – oftentimes lower-income citizens – won’t have the resources or expertise to challenge the IRS when their new army of auditors comes knocking. FGI will continue to press in court for the release of the information that will shine a light on the plans posing a real threat to many law-abiding Americans.”

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