GOP House queries IRS on plan to have agency as tax preparer and auditor.

IRS Picks Left-Wing Think Tank for $15 Million Review of Tax Return Proposal

IRS officials picked a left-wing think tank to conduct a $15 million “independent review” of a proposal long supported by the same foundation to empower federal officials to prepare Americans’ tax returns, according to House Ways and Means Committee Chairman Jason Smith (R-Mo.).

The think tank in question is New America, a Washington-based nonprofit foundation with deep ties to Democrat officials, appointees, and advocates.

“The characterization of New America as a strictly non-partisan, non-profit is surprising since the organization is known to be a left-leaning think tank. Specifically, some of the non-profit’s top officials include alumni from the Obama Administration … and other top officials of the organization are tied to left-leaning mainstream and openly left-wing media outlets,” Smith said in a March 6 letter to Acting IRS Commissioner Douglas O’Donnell.

Rep. David Schweikert (R-Ariz.) co-signed the letter.

Smith and Schweikert told O’Donnell that they want copies of all IRS documents generated during the selection process that resulted in New America getting the nod to do the review. The requested documents haven’t been provided to the committee.

The Proposal and Concerns

The proposal on the table is to establish the IRS Direct File program, under which taxpayers would have their annual income tax returns prepared by the agency using a new government software program to be developed. The $15 million funding for the review was authorized in an obscure provision of last year’s Inflation Reduction Act.

Even before New America was selected to conduct the review, the IRS had established a pilot program to begin testing the idea of turning federal officials into tax preparers, in addition to tax collectors and enforcers.

President Joe Biden’s administration and the Democratic majorities that controlled the 117th Congress approved $80 billion in funding that would allow the addition of 87,000 new IRS agents to its payroll, many of whom could be assigned to tax preparation if the Direct File initiative continues and expands from a pilot project.

But experts within and without the federal government wonder if the IRS could handle such a huge expansion of its powers and duties, if only because the tax agency’s management record in recent years has been the subject of multiple critical reports.

The Government Accountability Office (GAO) has been recommending for years that the IRS update its internal management systems, most recently in a December 2022 report.

Republican Criticism

Smith has no doubt that the project will be expanded as fast as Democrats can do it.

“From the start, the Biden Administration cooked the books to get exactly the outcome it wanted. The IRS chose a left-wing think tank and professor to run the study, both of whom are already on the record supporting the IRS becoming America’s tax preparer, filer, and auditor,” Smith said in a May 16 statement.

“IRS control of tax preparation is the latest step in Democrats’ ongoing efforts to supercharge the agency to go after working-class families, after giving the agency $80 billion to increase audits on taxpayers making less than $75,000. Americans will be powerless when the IRS completely controls the tax filing process from start to finish,” he said.

Smith is particularly upset that IRS officials initiated the pilot program without prior congressional authorization.

“Americans don’t want to give the IRS such sweeping control and authority, yet the Biden Administration refuses to listen,” he said in the statement.

If a truly independent review had actually been sought, New America was an odd choice, he said, given its lengthy record of advocating on behalf of expanding the IRS to be tax preparer, auditor, and collector.

Conclusion

The $15 million review of the IRS Direct File program by New America, a left-leaning think tank, has raised concerns among Republicans about the IRS becoming America’s tax preparer, filer, and auditor. The pilot program initiated by the IRS without prior congressional authorization has also been criticized. While the Biden administration and Democratic majorities in Congress have approved $80 billion in funding to add 87,000 new IRS agents to its payroll, experts question whether the IRS can handle such a huge expansion of its powers and duties given its management record in recent years.