‘Shadow Army’ Or Armed Militia Of IRS Agents: What’s True, What’s Not

ACROSS AMERICA — The $80 billion allocated in the Inflation Reduction Act to the Internal Revenue Service has spawned a new round of warnings from the political right about a “shadow army” or militia of armed auditors who will shake down your neighbor, your neighbor’s parents and their mom-and-pop businesses.

Republicans have a long history of enmity with the IRS, and the boost in funding for the agency gives them a ballot box issue in this fall’s midterm elections, where control of both the House and Senate are at stake.

The conspiracy theories that have spread quickly on social media and conservative news networks are sure to complicate the Biden administration’s efforts to overhaul the IRS.

Some of the stories circulating are true. Others aren’t. Here are some things to know:

Is The IRS ‘Coming For You’?

In a tweet, House Minority Leader Kevin McCarthy (R-CA) warned taxpayers who earn $75,000 that the “Democrats’ new army of 87,000 IRS agents will be coming for you — with 710,000 new audits …”

IRS Commissioner Charles P. Rettig said in a letter to Congress that audits won’t be proportionately increased on those making under $400,000 or less a year, according to a New York Times report.

“These resources are absolutely not about increasing audit scrutiny on small businesses or middle-income Americans,” Rettig wrote. “As we have been planning, our investment of these enforcement resources is designed around Treasury’s directive that audit rates will not rise relative to recent years for households making under $400,000.”

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Instead, the focus will be on wealthy tax cheats.

“Large corporate and high-net-worth taxpayers often engage teams of sophisticated representatives pursuing unsettled or sometimes questionable interpretations of tax law,” Rettig told Congress earlier this month. “The integrity and fairness of our tax administrative system relies upon the ability of our agency to maintain a strong, visible, robust enforcement presence directed to these and other similarly situated noncompliant taxpayers.”

Will 87,000 Armed Agents Be Hired?

In fact, there’s nothing in the Inflation Reduction Act regarding the number of new agents who will be hired to conduct audits, although the 87,000 figure does show up in a 2021 Treasury Department report.

In that report, the Treasury Department said additional funding would allow the IRS to hire almost 87,000 full-time employees by 2031 to help the agency crack down on sophisticated tax evasion; overhaul outdated technology to help the IRS better identify tax evaders and serve taxpayers; and further regulate third-party tax preparers in collusion with tax evaders.

By conservative estimates, those investments would raise $700 billion in additional tax revenue over the next decade, the Treasury said.

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“This revenue is backloaded in the 10-year budget window as several of these new investments — such as hiring revenue agents capable of complex global high net-worth examinations and building the technological infrastructure to support a new information reporting regime — take years to reach their full potential,” the report said, adding that after two decades, the revenue amounts to $1.6 trillion.

Did The IRS Spend $725,000 On Ammo?

In June, Republican Congressman Matt Gaetz of Florida told Fox News the IRS had purchased hundreds of thousands of dollars worth of ammunition.

“I imagine the IRS in green eyeshades and cubicles — not busting doors down and emptying Glock clips on our fellow Americans. Certainly it’s troubling that in 2022 alone, the IRS has spent around $725,000 on ammunition.”

It’s true the IRS Criminal Investigation division did spend $693,000 for ammunition in 2022. But it does that every year, averaging $675,000 for ammo every year from 2010-2017.

The Criminal Investigation division is a federal law enforcement agency of about 200 sworn agents who investigate tax violations, money laundering, cyber crimes and organized crime involving drugs and gangs.

“Many of these cases are typically worked in conjunction with other state and federal law enforcement agencies. IRS-CI special agents have been carrying firearms throughout the more than 100-year history of the agency, and have found themselves dealing with some of the most dangerous criminals,” an IRS spokesperson told the fact-checking site Verify.

What’s With The Ad, Then?

In an interview with Fox News, Republican Sen. Charles Grassley of Iowa raised the specter of a “strike force that goes in with AK-15s already loaded ready to shoot some small businessperson in Iowa.”

About the same time, a screenshot circulating on social media featured the IRS logo and text of “Major Duties,” including being able to “carry a firearm and be willing to use deadly force if necessary.”

Justin Cole, a spokesperson for the division, told The Associated Press the screenshot was of language that had appeared on the site, but said it was removed in error after a spate of online posts about it, but said it would be put back on the site. As recently as Aug. 19, the posting was found in a search of the Internet Archive.

An online job posting for Criminal Investigations unit positions does include the ability to use a firearm as a qualification.

The 2,000 special agents in the Criminal Investigations division represent a small sliver of the total IRS workforce of 80,000. Since the IRS was established in 1919, it has always employed armed agents whose duties include serving search and arrest warrants and conducting seizures.

Revenue agents who work on complex audits of corporations don’t carry weapons; neither do customer service representatives to answer tax-related questions, according to the IRS.

Why Are More IRS Staff Needed?

Currently, there’s a $1 trillion gap between what Americans owe in taxes and the amount of money the government has collected, and budget cuts that started during the Obama administration and have continued since have amounted to nearly 20 percent. Audits are down more than 50 percent.

“So that means a lot of people who should be audited, who are cutting corners or even cheating, are getting away with it because there aren’t enough revenue officers and revenue agents,” former IRS commissioner John Koskinen told PBS, saying the funding will cause “a sea change for the IRS.”

For the majority of taxpayers, there’s nothing to worry about, he said.

“I think it’s fair to say that the vast majority of people earning under $400,000 already file appropriate income taxes and never hear from the IRS,” he said. “Those who are cheating are going to be a little more nervous. I have always said that, when you underfund the IRS, it's really a tax cut for tax cheats, because they're the ones who benefit by the lowered rate of enforcement and lower audit rates.

“So the IRS with this funding is going to be able to be more focused on the people who are actually noncompliant. So, the hardworking Americans who are filing appropriate tax returns aren't going to hear any more from the IRS in the future than they have heard in the past.”

Taxpayers will be the ultimate beneficiaries, Kosskinen said.

As of July 29, the IRS still hadn’t processed a backlog of 10.2 million individual returns, due in part to the pandemic, but also because the agency still allows paper returns that can’t be scanned and must be entered digit by digit.

The Associated Press contributed reporting.