Like other federal agencies, the IRS has come to the attention of Elon Musk. He is polling X users about IRS funding. This comes as congressional Republicans are trying to shave $20 billion from the funding windfall that the IRS has received in recent years. The Biden administration maintains that such a cut would have catastrophic effects on IRS enforcement efforts. However, the IRS is a world-class organization when it comes to wasting funds.

I attended a tax conference at the University of Virginia Law School in 2018. The acting IRS commissioner, David Kautter, was invited to speak and showed up in a motorcade of large SUVs. He had at least six armed IRS Criminal Investigation agents as bodyguards and was met by two UVA police officers.

In other words, he had at least eight people carrying guns to protect him from 100 tax lawyers and accountants.

I understand that the IRS is not popular, and I received a death threat back then. Why didn’t Kautter drive to Charlottesville and meet with a UVA police officer there?

The IRS has maintained that the extra funding would be spent only on customer service and audits of large companies and wealthy individuals. To quote John F. Kennedy, a rising tide lifts all boats.

After the funding windfall, the IRS Office of Chief Counsel busily filled senior-level counsel positions. According to a source, the office was trying to lock in the extra spending.  The Office of Chief Counsel has also rewarded its executives and managers with five- and six-figure bonuses and “retention” bonuses.

There are ways of right-sizing and reforming the agency, particularly the chief counsel. The number of chief counsel Senior Executive Service executives should be slashed, and the chief counsel national office size could easily be cut in half. It should be made prohibitively risky and time-consuming for the IRS national office to give lobbyists inside access, and the IRS should be prevented from paying external whistleblowers who inform on their fellow citizens.

The main issue with IRS funding is that the agency is so dysfunctional that no extra money will make up for a lack of accountability. The inspector general is a captive entity of IRS management.  I witnessed the inspector general arrogantly stonewalling a congressman’s staff for nine months, refusing to disclose why it did not contact nine witnesses to IRS misconduct.

Three sources, including the Justice Department attorney supervising the tea party district court litigation, told me there were significant issues concerning the IRS disclosing documents in that scandal. No one was investigated or held accountable.

Extra funding to audit large companies means nothing when those large companies can then hire lobbyists to use their inside access at the IRS. Extra funding to audit high-income individuals means nothing when those audits get sidetracked to go after vulnerable targets such as elderly taxpayers.

They say that money cannot buy love.  It also cannot buy accountability and integrity.

William Henck was an IRS attorney for 30 years/InsideSources