The power to tax has long conferred the power to destroy political opponents. But in the glorious era of President Joe Biden, all previous cases of government abuse of power are being expunged, at least by the media and Biden supporters. That is why it is supposedly safe to vastly increase the power of perhaps the most feared federal agency, the Internal Revenue Service.
After announcing his endless wish list for new federal spending, Biden told Congress last week: “I’ve made clear that we can do it without increasing deficits.” Biden believes he has found a goose that will lay golden eggs for federal revenue — a new army of IRS agents to hound Americans and corporations to pay far more taxes.
The Washington Post reported that “the single biggest source of new revenue in the plan comes from dramatically expanding the clout of the nation’s tax agency.” Slate reported, “Biden wants to fund a massive upgrade to the American welfare state by making the IRS great at audits again.”
But the agency Biden seeks to expand and unleash has an appalling record. As author David Burnham noted in “A Law Unto Itself: The IRS and the Abuse of Power” (1990), “In almost every administration since the IRS’s inception the information and power of the tax agency have been mobilized for explicitly political purposes.”
President Franklin Roosevelt used the IRS to harass newspaper publishers who were opposed to the New Deal, including William Randolph Hearst. FDR also dropped the IRS hammer on political rivals such as the populist firebrand Huey Long and radio agitator Father Coughlin, and prominent Republicans such as former Treasury Secretary Andrew Mellon. President John F. Kennedy spurred the IRS to launch the Ideological Organizations Audit Project, which targeted right-leaning groups, including the Christian Anti-Communist Crusade, the American Enterprise Institute and the Foundation for Economic Education. Nixon Administration officials gave the IRS a list of official enemies to, in the words of presidential assistant John Dean, “use the available federal machinery to screw our political enemies.” Congress enacted legislation to severely restrict political contacts between the White House and the IRS.
But the power of IRS agents continued to increase decade by decade. In 1988, then-Sen. David Pryor, a moderate Democrat from Arkansas, warned that the IRS “operates a near totalitarian system.” Pryor complained that the IRS had encouraged a “bounty-hunter mentality among revenue officers” and called for reforms to assure that the IRS “operates on the basis of public respect rather than fear.” Congress enacted a so-called Taxpayer Bill of Rights but it failed to curb the revenuers.
The Clinton administration, like many of its predecessors, exploited the IRS to punish its political enemies. In 1995, the White House and the Democratic National Committee produced a 331-page report entitled “Communication Stream of Conspiracy Commerce” that attacked magazines, think tanks, and other entities and individuals who had criticized President Bill Clinton. In the subsequent years, many organizations mentioned in the White House report were hit by IRS audits. More than 20 conservative organizations — including the Heritage Foundation and the American Spectator magazine — and almost a dozen individual high-profile Clinton accusers, such as Paula Jones and Gennifer Flowers, were audited.
Members of Congress also routinely exploited their power to send the secret financial police against their enemies. The Associated Press reported in 1999 that “members of both parties in Congress have prompted hundreds of audits of political opponents in the 1990s,” including “personal demands for audits from members of Congress.” Audit requests from congressmen were marked “expedite” or “hot politically” and IRS officials were obliged to respond within 15 days. Because the abuse was bipartisan, there was little enthusiasm on Capitol Hill for an investigation.
In the Obama era, the IRS again became a political hit squad. The IRS demanded donor lists from 24 conservative nonprofits and proceeded to audit 10% of their donors — an audit rate ten times higher than average for the country. A 2013 Inspector General report confirmed that IRS employees had devoted far more scrutiny to nonprofit applications that used the terms “tea party” or “patriot” or that criticized government spending or federal deficits. In 2017, the IRS formally apologized to scores of conservative groups that it had wrongfully targeted in tax audits.