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IRS Is Hiring New Employees, Not Raising an Army

Aug. 18, 2022, 8:45 AM

“Is it true?” one of my friends messaged. “Is the IRS really raising an army?”

That gave me a start. An army? Honestly, I was just hoping the agency would start answering the phones again.

But like all rumors, this one had started with a grain of truth.

IRS Funding

The IRS has received a green light for additional funding: The Inflation Reduction Act—now signed into law—includes roughly $80 billion for the IRS to be phased in over 10 years. A Treasury Department report from May 2021 estimated that level of additional funding would allow the agency to hire roughly 87,000 new employees by 2031. New workers include those in many departments, such as customer service and IT, to be hired over the next decade.

It didn’t take long for that news to turn into a “new army of 87,000 IRS agents” following tweets such as this one from House Minority Leader Kevin McCarthy (R-Calif.).

Two days later, the rhetoric amped up with social media posts urging, “We don’t need 87,000 armed IRS agents” and others, including references to "$80B for armed IRS Agents.”

Tens of thousands of armed IRS agents? That was definitely a scary proposition. Only that also wasn’t true. As with the increased IRS funding, it started with a true story.

IRS Hiring

The IRS is hiring—you can read about their plans here. Even before the new law, the agency had been placing job ads. The ad that triggered the latest round of social media posts was a hiring announcement for an IRS Criminal Investigation Special Agent. The language in the ad made clear that a job applicant may be required to carry a firearm and may be in dangerous situations requiring the use of force.

It does sound alarming. But it’s not a new tack. I asked the IRS about it. Justin Cole, director of the Office of Communication for IRS-CI, confirmed the language was an 1811 job announcement and is not unique to IRS. It is, he said, standard language you will see in the hiring process for 1811s government-wide.

The 1811 federal criminal investigator classification series, established by the US Office of Personnel Management, includes positions that involve planning and conducting investigations relating to alleged or suspected violations of criminal laws. That includes jobs at agencies such as the Drug Enforcement Administration, Bureau of Alcohol, Tobacco & Firearms, Federal Bureau of Investigations — and the IRS.

Tax Crimes

The job description isn’t related to routine civil enforcement such as audits. It’s wholly associated with the criminal investigations arm, or CI. The IRS has had a criminal division for more than 100 years. While other federal agencies, such as the FBI, may chase financial criminals, IRS is the only federal agency that can investigate potential criminal violations of the Internal Revenue Code. You can read about some of their recent cases and priorities here.

When it comes to taxes, we tend to think about tax crimes as occurring only on paper—overstating deductions and underreporting income. Those behaviors might, in fact, be criminal—you can learn more about tax crimes here.

But there’s often more to it. As former IRS-CI Chief Don Fort once said, “Most crimes are financially driven.”

IRS Criminal Investigation Cases

Consider one of the highest profile criminals of all time: Al “Scarface” Capone. For years, the feds couldn’t make serious charges against Capone stick, even though he had been credibly accused of bribery, intimidation, and murder.

In 1928, the secretary of the Treasury summoned the first chief of the IRS Intelligence Unit (later IRS-CI), Elmer Irey, and told him to “get Capone.” Irey is said to have replied, “We’ll get right on it.” Irey’s division eventually would send Chicago gangster Johnny “The Fox” Torrio and Capone to jail—something J. Edgar Hoover’s flashier FBI G-Men hadn’t been able to do.

IRS-CI training also has proved crucial in the war on drugs. In the 1980s, Pablo Escobar, “The King of Cocaine,” was head of the Medellin cartel, said to be responsible for an estimated 80% of the cocaine smuggled into the US. It would be Robert Mazur who played a crucial part in the effort to bring down Escobar—his 11 years as a CI agent prepared him for the fact that Escobar’s weakness, as with many criminals, was finance.

In the same decade, the IRS worked with other agencies such as the US Drug Enforcement Administration, FBI, and US Customs Border Protection on high-profile drug and money-laundering cases such as Operation Polar Cap, which resulted in dismantling a $1.2 billion operation. Ultimately, 127 people and two Latin American banks were charged in the case. Attorney General Dick Thornburgh said at the time it was ″the largest money-laundering crackdown ever carried out by the federal government.”

Following the toppling of Saddam Hussein in Iraq, IRS Special Agent Scott Schneider and his CI colleagues traveled to Baghdad to track down Hussein’s illegally gotten gains. According to the Treasury Department, they recovered billions of dollars.

As crime has evolved, so, too, has crime fighting.

In 2020, the Justice Department announced it had dismantled three terrorist financing cyber-enabled campaigns. These campaigns—involving the al-Qassam Brigades, Hamas’s military wing, al-Qaeda, and the Islamic State of Iraq and the Levant—all relied on sophisticated cyber-tools, including the solicitation of cryptocurrency donations from around the world to garner attention and raise funds for their terror campaigns.

IRS-CI helped track and seize cryptocurrency accounts that laundered funds to and from the campaigns. They are the government’s largest-ever seizures of cryptocurrency relating to terrorism to date.

Months before, the IRS had announced the world’s largest dark web child pornography site had been taken down. According to the IRS-CI, agents became aware of the Welcome to Video site because of their work on previous dark web marketplaces. In addition to hundreds of arrests, the operation rescued at least 23 minor victims residing in the US, Spain, and the UK, who were being abused by the users of the site.

IRS Criminal Investigation Today

Today, IRS-CI is the sixth-largest law enforcement agency in the US. There are about 3,000 employees in CI—about 70% of whom are special agents, and only those special agents carry firearms.

Sorting Truth From Fiction

I’ve been on the opposite side of the audit table from the IRS. It can be super scary for taxpayers. The stakes are high when your finances are on the line—I get it.

It makes an even better story to suggest that armed IRS agents are coming for you and me. Only, it’s not true.

You don’t have to be a fan of the IRS. And you don’t have to be in favor of giving them more money. But when you’re talking about what it is the IRS does—and what it doesn’t do—you should arm yourself, but with the facts.

This is a regular column from Kelly Phillips Erb, the Taxgirl. Erb offers commentary on the latest in tax news, tax law, and tax policy. Look for Erb’s column every week from Bloomberg Tax and follow her on Twitter at @taxgirl.

To contact the reporter on this story: Kelly Phillips Erb in Washington at kerb@bloombergindustry.com

To contact the editor responsible for this story: Rachael Daigle at rdaigle@bloombergindustry.com