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A year ago, the private tax returns of thousands of Americans spanning a 15 year period were released by the progressive news organization ProPublica. Despite swiftly promising to launch investigations into this unprecedented leak, the Biden administration still has provided no update explaining how this happened and who is responsible. 

This data breach is just one recent case of the IRS failing to do its job. Instead of reforming the agency and investigating leaks and wrongdoing, the Biden administration continues to push to expand the size and scope of the IRS so that they have more control over the lives and finances of American taxpayers.

Just last week, Treasury Secretary Janet Yellen appeared before the Senate Finance Committee and the House Ways and Means Committee. While Secretary Yellen repeatedly advocated for increased IRS funding, she had no update for lawmakers on the ProPublica leak.

Administration officials have failed to provide any update on this investigation on a dozen separate occasions. It remains unclear when they will have answers, what, if anything, has been uncovered, or even how serious the investigation is.

This leak should be concerning to taxpayers because this private data could have only been obtained in one of two ways: it was either obtained through someone hacking the IRS database or through an IRS employee illegally disclosing the information, a felony punishable by up to five years in jail time. 

The data was clearly obtained and used for partisan, political purposes. The ProPublica reporters first released the information the morning of a Congressional hearing that Democrats used to advocate for higher taxes on the wealthy. 

Broadly, this stolen taxpayer data is just another example of the IRS failing to do its job and acting in a partisan, political way. 

Each year, IRS agents spend tens of thousands of hours on taxpayer-funded union time while picking up just one in five taxpayer phone calls. The agency has repeatedly failed to update its computer systems despite working to modernize it tech for the past four decades.

In 2016, the IRS also lost track of laptops containing sensitive taxpayer data. The Treasury Inspector General for Tax Administration estimates that the IRS had failed to properly document the return of 84.2 percent, or more than 1,000 computers due to be returned by contract employees.  

The agency has also intentionally leaked taxpayer data for political reasons. The Obama IRS was caught unfairly denying conservative groups non-profit status ahead of the 2012 election during the Lois Lerner tea party targeting scandal.

Agency officials have also leaked the sensitive information contained on Schedule B forms for political purposes, such as leaking of the schedule B belonging to the National Organization for Marriage.

While the administration is unable to provide any information on the data breach, they continue to push to increase the IRS’s funding by $80 billion in order to hire 87,000 new IRS agents.

This would just provide new avenues for the agency to target and harass taxpayers.

$45 billion of this funding would go toward enforcement activity which will fund 1.2 million more annual IRS audits, half of which will hit households making less than $75,000.

The Biden administration also wants to grant the IRS new powers and responsibilities, including having the agency snoop on every personal and business bank account and Venmo account in the country, a proposal that could impact up to 134 million taxpayers earning less than $400,000 per year.

They want to create a new a government tax preparation system which would require the IRS to collect more personal data to properly assess taxes.

In addition, they are proposing a new tax on unrealized gains that would have given the IRS the power to subjectively value assets of taxpayers.

This would dramatically expand the power of the agency and give bureaucrats more control over the lives and finances of American families and businesses.

The fact is, the agency should not be given new funding and new responsibilities given it fails to perform its most basic duties with the substantial amount of funding it has been given for decades.  

The ProPublica leak represents an unprecedented leak of taxpayer information and shows the agency cannot perform existing responsibilities. However, it is just the latest example of the IRS in an overly partisan, political way and failing to protect taxpayer information, and is more proof that the agency needs reform, not more taxpayer dollars.

Alex Hendrie is Director of Tax Policy at Americans for Tax Reform. 

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