Congress Gave $80 Billion to a Lawless IRS

After nearly eight months of deliberation, the Internal Revenue Service has finally released a lightly detailed plan for how to spend the additional $80 billion Congress allotted in 2022. Taxpayers should be dubious of IRS promises to use this funding to ensure fairer and more lawful tax-code enforcement. The few details in the report’s vague language indicate that the IRS wants to use its newfound money to enforce sections of the tax code that courts struck down twice as unlawful last year. Congress should stop funding the illegal purposes at the IRS.

One of the few definite action items the IRS included in its 150-page report was an enforcement objective to levy tax penalties against taxpayers engaging in “listed transactions”: practices the service has labeled as prone to tax abuse. These currently consist of a series of 36 transactions that the IRS has simply published on its website and in taxpayer notices over the last two decades. The IRS enforces and cites these notices as having the force of law even though taxpayers had no opportunity to voice concerns about these rules. Because the notices didn’t undergo the proper review process to become regulations, they can’t legally be enforced and should be nonbinding.