The IRS shows its colors

 Kimberley Strassel at the Wall Street Journal.

It's no longer "our government".

I like the idea of a tax that does not require a huge IRS to keep track of. Flat tax, sales tax, value added tax look good to me. Just think - all those IRS people that could be doing something useful - like producing products.

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IRS Needs a Cage, Not More Cash

The cases of the whistleblower Gary Shapley and journalist Matt Taibbi show why the GOP should claw back that $80 billion infusion.

As House Republicans and the White House wrangle over a debt-ceiling deal, one GOP demand ought to be nonnegotiable. A politicized Internal Revenue Service has no business keeping its untrustworthy fingers on last year’s $80 billion cash infusion.

This week brought two more examples of IRS roguery that build on its already unsavory record of leaks, incompetence and partisan behavior. The first is the alarming story of journalist Matt Taibbi, who may have been targeted by the IRS in retribution for documenting the joint censorship efforts of Big Tech and the federal government.

Mr. Taibbi in March told the House Judiciary Committee a disturbing tale: an IRS agent had made a surprise visit to his New Jersey residence on March 9—the same day Mr. Taibbi testified before another House committee about censorship at Twitter. The journalist was subsequently told there were “identity theft” concerns with his 2021 and 2018 tax returns. The 2018 claim particularly troubled Mr. Taibbi, since his accountants possessed documentation showing the return had been electronically accepted, and neither they nor he had ever received notification of a problem. Judiciary Chairman Jim Jordan demanded the IRS explain.

The IRS earlier this month provided Mr. Jordan documents that only add to the appearance of targeting. It seems the IRS officially opened its examination of Mr. Taibbi’s return on Dec. 24—not only Christmas Eve but a Saturday. What could be urgent enough to inspire a government employee to work overtime? That was the day Mr. Taibbi capped three weeks of reporting with his ninth installment of the Twitter files, an exposé of a wide sweep of federal agencies working with social-media companies to censor online speech.

Documents also show that in addition to the unannounced house call, an IRS agent dived deep into Mr. Taibbi’s personal life, compiling a file of his voter-registration records, whether he had a concealed-weapon permit and even whether he possessed hunting or fishing licenses, among other data. The file contained his Wikipedia page detailing his Twitter files work. The IRS launched this excavation even though Mr. Taibbi didn’t owe the IRS any money.

More notable is what the IRS didn’t provide the House: any proof of letters it claimed to have sent to Mr. Taibbi alerting him to the purported 2018 problem. It also failed to cough up internal communications related to the case, despite Mr. Jordan’s demand and Mr. Taibbi’s signed waiver to allow Congress to see information related to his return.

Whether Mr. Taibbi is a target of harassment or not, these IRS tactics ought to alarm lawmakers. How many other Americans—those who don’t even owe the feds money—have an IRS file detailing their gun-permit status? How does that relate to tax liability? Federal tax forms require preparers to list their names and phone numbers. Is it IRS practice to jump to an investigation before picking up the phone? Is it now standard for an agent to show up unannounced at your door—in absence of any proof of lawbreaking?

Then there’s IRS Supervisory Special Agent Gary Shapley, the congressional whistleblower who this week went public with his claims of Justice Department political interference in the Hunter Biden probe. A 14-year IRS veteran, Mr. Shapley oversees a team that specializes in international tax and financial crimes. He says he was assigned control of the Biden investigation in 2020, but again and again watched prosecutors engage in “deviations” from the normal process, in ways that “seemed to always benefit the subject.” He explained he “couldn’t silence my conscience anymore.”

Mr. Shapley’s attorneys informed Congress that their client and his team had recently been yanked off the probe “at the request of” the Justice Department—which looks like clear (and forbidden) retaliation for his speaking out. IRS Commissioner Danny Werfel will undoubtedly try to slough this off on Justice, but a request is only a request, and nothing excuses Mr. Werfel from his own obligation to see tax justice done or protect whistleblowers. The IRS can hardly claim to need more money to pursue tax cheats when it is sidelining top investigators pursuing tax cheats.

No agency with this track record deserves last year’s $80 billion reward, especially as the IRS is openly promising to use the cash to hire tens of thousands of new agents for draconian enforcement activity. If Democrats are so concerned about discretionary spending cuts, they ought to be forced to choose between a cash infusion aimed at taxpayer harassment and the domestic handouts they claim are vital.

Meanwhile, look to see which enterprising GOP presidential candidate strikes on the obvious answer to the forever IRS mess: a flat tax. A vastly simplified system wouldn’t only strengthen the economy but carry the side benefit of completely eliminating the positions of legions of IRS employees, whose power rests in the gray area of a tangled tax code. Starve the beast—for now. Ultimately, put it in a tiny cage.