Republicans push for IRS defunding

Republican leaders in the House proposed legislation this week to strip the Internal Revenue Service of much of the $80 billion in extra funding it won in last year’s Inflation Reduction Act as a gambit to reopen negotiations with the Biden administration over increasing the debt limit, while calling for the Justice Department to investigate allegations by an IRS whistleblower of a coverup involving Hunter Biden’s taxes.

House Speaker Kevin McCarthy, R-California, introduced a bill Wednesday that would impose spending cuts of billions of dollars, estimating it would save the federal government $4.5 trillion over the next 10 years, while allowing the government to raise the debt ceiling by $1.5 trillion to avoid a default this year. The 320-page bill would repeal most of the extra funding dedicated to the IRS in the Inflation Reduction Act, especially the amount dedicated to extra tax enforcement, along with incentives for clean energy tax credits. The bill would also block student loan forgiveness and debt cancellation, expand work requirements for Medicaid and food stamp recipients, return discretionary spending for federal agencies to fiscal year 2022 levels and limit future spending growth to 1% a year. It’s unlikely to be passed by the Senate, and may not even be passed by the House, but it represents a gambit by McCarthy to reopen talks with the Biden administration over increasing the debt limit, while President Biden and Democrats have called for a “clean” bill without preconditions to raise the debt ceiling to avoid a catastrophic default.

“If Washington wants to spend more, it will have to come together and find savings elsewhere, just like every household in America,” McCarthy said, according to CBS News. “President Biden has a choice. Come to the table and stop playing partisan political games, or cover his ears, refuse to negotiate and risk bumbling his way into the first default in our nation’s history.”

After McCarthy was elected Speaker of the House earlier this year, Republicans passed a repeal of the extra IRS funding as their first bill in the new Congress. They have also revived investigations of President Biden’s son, Hunter Biden. An IRS whistleblower’s law firm sent a letter Wednesday to congressional leaders alleging a coverup at the IRS of Hunter Biden’s taxes and stonewalling by the Justice Department. 

“I represent a career IRS Criminal Supervisory Special Agent who has been overseeing the ongoing and sensitive investigation of a high-profile, controversial subject since early 2020 and would like to make protected whistleblower claims to Congress,” said the letter from his attorney Mark Lytle, a partner at the law firm of Nixon Peabody in Washington, D.C. “Despite serious risks of retaliation, my client is offering to provide you with information necessary to exercise your constitutional oversight function and wishes to make the disclosures in a non-partisan manner to the relevant committees on both sides of the political aisle.”

The letter doesn’t identify the subject of the whistleblower claims as Hunter Biden, but they reportedly involve the president’s son’s taxes and suspicious activity reports from banks. Lytle said the whistleblower made the allegations internally to the IRS, and through his attorneys to the Treasury Inspector General for Tax Administration and the Justice Department’s Office of Inspector General. 

Hunter Biden’s attorney suggested the IRS whistleblower may have committed a crime. “It is a felony for an IRS agent to improperly disclose information about an ongoing tax investigation,” attorney Chris Clark said in a statement, according to NBC News. “The IRS has incredible power, and abusing that power by targeting, embarrassing, or disclosing information about a private citizen’s tax matters undermines Americans’ faith in the federal government. Unfortunately, that is what has happened and is happening here in an attempt to harm my client.”

Republicans are nevertheless promising to investigate the claims. House Ways and Means Committee chairman Jason Smith, R-Missouri, issued a statement Wednesday after receiving the letter from the whistleblower’s attorney.

“We appreciate this outreach and look forward to sitting down promptly with this individual to better understand the scope and detail of the concerns raised,” he said in a statement. “The committee takes seriously any allegations of misconduct by government officials or offices and will, on behalf of American taxpayers, look into concerns that are brought to our attention. It is our responsibility to ensure the tax code is applied fairly and appropriately to all Americans – whether through the oversight efforts this committee initiates or the need for oversight that is brought to our attention. From the first days of this new Congress, I made clear that we will value the importance and the role of whistleblowers in ensuring the integrity of our governing institutions — which is why we established an online portal providing IRS employees a direct avenue to provide information regarding any wrongdoing they may have witnessed or believe to be occurring. We also take seriously the importance of protecting whistleblowers in accordance with the law. As with all matters before the committee, we will go where the facts lead and conduct a review of this matter in an appropriate and timely manner.”

House Oversight and Accountability chairman James Comer, R-Kentucky, has already been investigating Hunter Biden and vowed to continue to probe.