Far-right actors who rely on dark money want to keep the IRS defunded

Extreme voices from the far-right fringe in our country are crafting some scary fairy tales about the Inflation Reduction Act of 2022, especially about the increased IRS funding it will provide. 

Fox News’ Brian Kilmeade warned that the IRS is “Joe Biden’s new army” that will “hunt down and kill middle class taxpayers that don’t pay enough.” 

Rep. Lauren Boebert said fire-arm carrying IRS officials would be “committing armed robbery on Americans.” 

And as he so often does, the local “Freedom” Foundation CEO Aaron Withe jumped on the bandwagon, too, declaring the IRS funding “an ominous power grab” with the “insidious motivation” of expanding union membership.

Back in reality, the IRS has been systematically defunded for over a decade, with its current headcount just about matching that of 1974. A Washington Post article documented the outdated, overwhelmed, and backlogged system that staff are suffering through. 

Crippled by underfunding, it has meant that the IRS can’t afford to audit the rich and their complicated holdings and filings. In fact, millionaires were 80 percent less likely to be audited in 2018 than they were in 2011.

That could change dramatically with the passage of the Inflation Reduction Act. IRS leadership told Congress it would heed the U.S. Treasury directive to not raise audit rates for households making less than $400,000 a year. Which means America’s middle class is not being targeted by the new funding. 

So why are the extremist talking heads working overtime on crafting such menacing conspiracy theories?

Crucially, the IRS has said they will use part of the increased funding to crack down on wealthy tax evaders. IRS Commissioner Charles Rettig explained, “Large corporate and high-net-worth taxpayers often engage teams of sophisticated representatives” pursuing questionable tax loopholes. Simply put, the IRS has not had the resources to hold the wealthy and power accountable for their fair share of taxes. Now they could.

In the case of Withe’s “Freedom” Foundation, we know that their donor base often occupies the millionaire and billionaire class. It includes the far-right behemoth Lynde and Harry Bradley Foundation of Wisconsin and Sarah Scaife Foundation of Pennsylvania. Perhaps Withe is weaving his ghost stories in defense of some nervous funders.

But there may be another, deeper level of concern for Withe. The “Freedom” Foundation, like many other so-called “conservative” think-tanks around the country, has been accused of violating their non-profit tax exempt status with the IRS for years. His group has a federal tax exemption with the understanding that they remain politically non-partisan. According to a 2015 complaint, they’ve been doing the exact opposite.

In a newsletter to donors, “Freedom” Foundation President Tom McCabe explained the origin of their political agenda. Recounting his 2015 master plan to oust “left-wing politicians” from Washington state, he recalled how he took the helm at the “Freedom” Foundation and drove it forward with the goal to defund public sector unions and Democrat politicians – to “replicate [Gov. Scott] Walker’s remarkable successes in Wisconsin…” 

The “Freedom” Foundation’s dream was to turn Washington into a “red state” with far-right politicians in office that would strip workers of collective bargaining power, keep wages low and cut public employee pensions. It doesn’t matter that they’ve failed entirely – they’ve been wasting their millions for seven years on a clearly partisan, political mission. When an organization thumbs its nose at federal tax law for this long, and this egregiously, it’s no surprise when they get nervous about a more robust Internal Revenue Service.