Trumping the IRS

The “Anti-Weaponization Fund” would once have brought down an administration that floated it. In fact, President Trump’s lawsuit that it gave it birth - a suit claiming $10 billion in damages for an IRS leak that happened during Trump’s first term - would have wrecked any prior presidency.

While the fund - a $1.776 billion taxpayer-funded bag of cash for distribution by a panel that the president can fire at will - is exceptionally outrageous, it differs from other Trump initiatives only in ambition. I use the present tense as I don’t think that it is really dead, especially given GOP congressional leadership’s opposition to legislative efforts to kill it.

Everything Trump does is surrounded by disorder and improvisation. He is easily moved by chance personal encounters and random brain flashes, and his standard operating mode is thoughtless impulsiveness. There is no 3D-chess master plan here.

That said, the arc of chaos tends always towards the use of government agencies to reap rewards and punish enemies.

Doing so requires the agencies to submit to the presidential will, whatever it may be during a midnight tweetstorm. The operation of the IRS since January 20 of last year is best understood with that in mind.

A necessary step was replacing IRS leadership. Trump made it clear before taking office that he would fire the IRS commissioner. His choice of underemployed Missouri politician Billy Long for the job signaled that the IRS would be operated as an administration political arm; Long had no obvious qualifications other than loyalty to Trump.

While the Senate Finance Committee slowly worked to swallow Long and his recent history of hawking bogus tax credits, the agency cycled through four acting commissioners as the administration made unprecedented demands for taxpayer data for use in immigration enforcement.

The Senate finally confirmed Billy Long as IRS Commissioner on June 12, 2025. It appears that he did not properly understand his mandate: to do what he was told, when he was told to do it. He reportedly upset his bosses by erroneously saying the start of filing season would be delayed and by prematurely announcing the end of the Direct File program. The Washington Post reports that he was sacked hours after “the Internal Revenue Service clashed with the White House over using tax data to help locate suspected undocumented immigrants.”

Treasury Secretary Bessent stepped in as Acting Commissioner. Long was exiled as Ambassador to Iceland, where he got off to a great start.

Bessent in turn gave Social Security head Frank Bisignano a second job with a newly-imagined title of IRS “Chief Executive Officer.” This post has never been authorized by Congress. It sidesteps the Vacancies Act and laws requiring an IRS Commissioner. This makes it easier for the White House to tell the IRS what to do with no Donald Alexander to push back.

Meanwhile DOGE set to work undermining the organizational stability of the IRS. Programming geniuses with no tax background received extraordinary access and influence in the agency, surely doing wonders for management morale. Over 7,000 probationary employees received termination notices on risible performance pretexts. Two IRS deferred resignation programs offered a way out for others who might not want to work in an increasingly political and chaotic agency. Overall, the result has been a reduction of IRS staffing from about 103,000 employees to around 77,000.

Just in case there remains any inclination among IRS employees to question orders, the administration has moved to reclassify the civil service status of some important IRS policy employees to make them easier to fire.

The IRS does continue to stagger along. Despite wildly unrealistic presidential statements about replacing the income tax with tariffs, the External Revenue Service is not going to replace the IRS. Having Bisignano - one of the few arguably competent people in the administration - as “CEO” shows that Bessent, at least, realizes the need for a functioning tax agency. But the function has become more political.

An obvious example is the threatened examination and revocation of tax-exempt status for colleges and universities as a result of their DEI initiatives or perceived political bias. This also shows up in the plans to modify Form 990, the exempt organization information report. While the stated purpose is transparency, it would gather more information that just might also be a targeting tool.

The president has been happy to pardon convicted tax criminals like Paul Walczak, who pleaded guilty to pocketing millions in withheld taxes, “after Walczak’s mother raised millions of dollars for MAGA candidates and paid a million dollars to dine with the president at Mar-a-Lago.”

Given the shameless use of the Department of Justice to hound political enemies, it’s foolish to think the IRS can’t be put to the same use. “Nice business you have there, it would be a shame if we had to audit you and your best customers.”

And, of course, there is the “addendum” to the corrupt “agreement” giving rise to the “Anti-Weaponization” fund that provides Trump, his family, and Trump-related entities absolution from past tax sins. Even though acting Attorney General Todd Blanche says the fund is “not going forward,” he says the addendum stays in place. A sufficiently housebroken IRS won’t push back against the dubious legality of the addendum.

With supine acquiescence by GOP-controlled Congressional tax committees, the independence of the IRS is compromised. A change in Congressional control will be unable to undo the institutional vandalism before Trump leaves office. When he does, don’t be surprised if his successor, of whatever party, finds political control of the agency too useful to surrender.

The views here are mine alone. They are not to be considered the views of any firm, person, faith tradition, polity, organization, extended family, or other assemblage that I am or have ever been associated with. Nothing here is tax advice to you, dear reader.

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