WHAT’S BEHIND THE DEMOCRATS’ IRS EXPANSION?

WHAT’S BEHIND THE DEMOCRATS’ IRS EXPANSION?

 BY JOHN HINDERAKER IN DEMOCRATS, IRS

Nearly half of the Democrats’ Inflation Promotion Act is devoted to increasing the budget of the IRS. Think about that: when has more IRS ever been popular? Never. So what are the Democrats up to?

Monica Showalter writes:

The other half [of the Inflation Promotion Act], some $300 billion, will be dedicated to IRS enforcement, surveillance upgrades, and audits against small businesses, who have now been re-labeled “the rich.”

$300 billion to the IRS? Seriously?

Sinema got her demand to not close the carried interest tax loophole which is what her hedge fund donors wanted. Democrats replaced that with a provision to tax businesses even more.

This is ironic. Democrats say the IRS will go after “the rich,” but the one provision in the Inflation Promotion Act that actually would have been bad for the rich–repeal of the carried interest treatment of income earned by hedge fund managers–is now out of the bill. A friend of mine who made a lot of money as a hedge fund manager describes the carried interest concept as “completely unjustifiable.” Yet Chuck Schumer has protected it against reform for many years, on behalf of Democratic Party donors.

Now, finally, the Democrats ostensibly were ready to turn on their hedge fund backers–Wall Street is not entirely a Democratic enclave, but almost–and what happens? Kristen Sinema rides in to save the day not only for her own hedge fund supporters, but for Schumer’s as well. Coincidence?

That was a digression. More on the IRS:

The [Washington] Post reports the IRS expects a much lower return on all those “rich” people they claim they are going to audit with those 87,000 new agents, which is an eightfold increase in their budget….

Wait! 87,000 new IRS agents? Can this possibly be right? And an eightfold increase in the IRS enforcement budget? What do you suppose the IRS will do with that massive influx of money and manpower?

Showalter and others think the Democrats’ IRS will attack small businesses in a major way. That probably is true. But, as the president of a conservative policy organization, I have another concern. We all remember how Barack Obama’s IRS went after Tea Party groups and other conservative organizations before and after the 2010 midterm wipeout. Mostly, they slow-walked the 501(c)(3) approval process. But imagine an IRS hostile to conservative principles, and emboldened by an eight-fold budget increase and 87,000 new agents. What would the IRS do in the liberals’ wildest dreams?

I think the liberals who run the IRS would sic their agents on every conservative nonprofit in the country. They would audit such organizations, looking for evidence that they somehow had violated the extremely vague regulations governing political activity. Such audits would require even squeaky-clean organizations like my own to hire lawyers to defend them. Government lawyers work for free–that is, courtesy of the taxpayers–while private lawyers have to be paid. Thus, a concerted attack by the IRS could largely disable conservative nonprofits, whose revenue would be dissipated by paying for lawyers, and whose energies would be dissipated in dealing with IRS attacks.

Call me paranoid, but I think this lies behind the Democrats’ sudden desire to drastically upsize the IRS.

https://www.powerlineblog.com/archives/2022/08/whats-behind-the-democrats-irs-expansion.php