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Plans for IRS Overhaul Emerge
According to reports from The Wall Street Journal, the Trump administration is planning significant changes to the Internal Revenue Service‘s Criminal Investigation (CI) division that would enable targeting of political opponents. Sources indicate a Trump ally at the Treasury Department has prepared a list of investigation targets that includes donors to Democratic candidates and left-leaning organizations.
The reported initiative would include installing a team of political supporters within the CI division and easing IRS rules designed to prevent investigative abuses. This effort appears connected to broader domestic terrorism initiatives that would revoke tax exemption status for groups supporting what the administration has defined as “extremism on migration, race, and gender.”
Threats to Institutional Credibility
Analysts suggest these changes threaten the fundamental credibility of the IRS and the voluntary tax system. “The nation’s voluntary tax system is based on the IRS as a politically neutral tax collector, not a partisan weapon,” the report states, raising questions about how taxpayers would respond to audits perceived as politically motivated.
According to experts, the timing is particularly concerning given existing budget constraints. The administration and Congress have already implemented deep cuts to the agency’s compliance budget, with analysis showing Trump has proposed cutting enforcement budgets by another one-third in 2026. These enforcement budget cuts come amid broader conservative tax policy initiatives.
Legal and Ethical Concerns
The reported plan raises significant legal questions, according to tax law experts. By law, the IRS has only two political appointees—the commissioner and chief counsel—making the placement of political allies in investigative positions highly unusual and potentially illegal.
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Sources indicate the effort is being led by Gary Shapley, a former CI staffer who became an outspoken supporter of Donald Trump. Shapley was previously critical of the IRS’s handling of the Hunter Biden investigation before being briefly named acting IRS commissioner in April, an appointment rescinded two days later, according to CBS News reporting.
Historical Context and Double Standards
The current initiative contrasts sharply with Republican outrage a decade ago when IRS staffers targeted conservative groups seeking nonprofit status during the 2010-2012 period. A major difference, analysts note, is that the earlier targeting was initiated by mid-level staffers without White House knowledge, while the current effort appears to be encouraged directly by the president.
Similarly, Trump and congressional Republicans have repeatedly justified IRS enforcement cuts by claiming the agency was overly aggressive in audits, despite individual audit rates below 1 percent. House Ways & Means Committee Chair Jason Smith (R-MO) previously praised Trump’s efforts to reduce IRS staff, warning that “more invasive audits from the tax collector would be ripe for abuse.”
Broader Political Implications
The reported IRS initiative parallels other administration efforts to address what Trump has called “the enemy from within”. GOP leaders have labeled upcoming “No Kings” demonstrations as “hate America” rallies, with some suggesting organizers and funders could be targeted.
This approach represents significant political developments that could reshape enforcement priorities across federal agencies. The plan appears consistent with the Project 2025 conservative manifesto, which has become a blueprint for much of the second Trump administration’s approach to governance.
As these industry developments unfold, experts warn that using the IRS’s criminal division for political targeting could have lasting consequences for the agency’s credibility and the integrity of the tax system. The situation continues to evolve as the administration implements its agenda amid ongoing related innovations in enforcement approaches.
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