Fox News pushed falsehood that the Inflation Reduction Act adds 87,000 new IRS employees more than 200 times

MATT GERTZ/Media Matters

 Fox News has promoted the false claim that the Inflation Reduction Act adds 87,000 employees to the Internal Revenue Service at least 203 times since Senate Democrats announced the bill’s framework on August 5, according to a Media Matters review of the network’s programming. That false talking point fuels Fox’s incendiary smear that President Joe Biden is turning the IRS into a “new Gestapo” that will “hunt down and kill middle-class taxpayers.”

The IRA, which Biden signed into law on August 16, includes $80 billion over the next decade in additional funding for the IRS. A portion of those funds would support tougher tax enforcement targeted at Americans making more than $400,000, which the Congressional Budget Office estimates would raise $204 billion. The net gain of $124 billion, along with prescription drug pricing reform and tax increases on billion-dollar corporations, helps the bill fund investments in clean energy and health care while also reducing the deficit by over $300 billion over 10 years. 

Republicans and their right-wing media supporters oppose increased funding for the IRS; they prefer to hobble tax enforcement so that wealthy people can continue to cheat on their taxes with impunity. GOP politicians spent years defunding the tax police and have focused their IRA criticism on this provision, deceptively warning that the bill creates a “new army of 87,000 IRS agents” who “will be coming for you,” in the words of House minority leader Kevin McCarthy (R-CA). 

Fox has played a key role in stoking right-wing ire against the IRS, including by spreading the false claim that the bill would lead to the hiring of 87,000 employees at least 203 times. The talking point has been commonplace both on “news side” programs like The Faulkner Focus (20 instances), America’s Newsroom (15), and America Reports (12), and on “opinion side” shows like Fox & Friends First (23 instances), Fox & Friends (16), The Ingraham Angle (15), Tucker Carlson Tonight (12), and Hannity (10). The purported 87,000 new hires were specifically described as “agents” at least 169 times.  

But it is false to claim that the IRA provides for 87,000 IRS hires, agents or not. The IRS has not announced any hiring plans in response to the IRA — the figure comes from a separate Treasury Department proposal from 2021 detailing what the IRS could do with additional funding, which predates that bill. That proposal includes 87,000 new hires across all positions, including secretarial and IT staff, not strictly auditors or “agents.” GOP-driven budget cuts in recent years have reduced the IRS headcount to near-1974 levels, and the hiring plan is meant to address a major loss of employees to retirement and “simply maintain current levels,” according to PolitiFact.

Fox has also regularly promoted the wildly inflammatory and false claim that the new IRS hires would all be armed, doing so at least 40 times over the same period, 9 of which came on Fox star Tucker Carlson’s program. That’s a conflation of a separate talking point the right has used to fearmonger about the IRS. In fact, as the network’s White House correspondent Jacqui Heinrich has noted on Twitter, only a tiny fraction of the service’s employees belong to the Criminal Investigation division, a century-old unit whose special agents carry firearms because they handle dangerous cases involving crimes like public corruption, narcotics, and money laundering.

These Fox falsehoods are part of a wave of right-wing demagoguery targeting the IRS. As I noted last week after Carlson alleged that the Biden administration is hiring “87,000 armed IRS agents to make sure you obey”:

Carlson’s falsehood follows a week of unhinged demagoguery from Fox and others in the right-wing media that links the new IRS funding with the Mar-a-Lago search as dark signs that the Biden administration has weaponized the government against Americans. Fox pundits have described the potential wave of IRS hiring as an “economic, financial militia against regular people” deployed by those who “want to control you”; a “new army” that will “hunt down and kill middle class taxpayers”; a “new Gestapo” Biden will use in an “abusive, corrupt manner”; “a Praetorian Guard that will be unleashed again” to “grab all the cash they can by any means necessary”; and “part of an orchestrated campaign to target Americans and have the federal government be at war with those Americans.”

The virulence of the right-wing attacks on the IRS has triggered concerns that its employees may be subject to violence. On Tuesday, IRS Commissioner Charles Rettig announced “a full security review of its facilities nationwide” in light of staff safety concerns, The Washington Post reported. Rettig, a Trump appointee, suggested that Republican criticisms of the service are fueling far-right extremism and threats.

That isn’t giving Fox hosts a reason for pause. On Tuesday, Laura Ingraham once again falsely claimed that the IRA funds “87,000 IRS agents,” and described Rettig’s statement as “preemptive action against its critics” by the Biden administration.

Methodology

Media Matters searched transcripts in the SnapStream video database for all original programming on Fox News Channel for any of the terms “Internal Revenue Service,” “IRS,” “Inflation Reduction Act,” or “IRA” or any variation of the phrase “tax enforcement” within close proximity of any of the terms “hire,” “employee,” “personnel,” “agent,” “armed,” “87,000,” “87000,” “87 thousand,” “eighty-seven thousand,” “80 billion,” or “eighty billion” from August 5, 2022, through August 23, 2022.

We counted segments, which we defined as instances when the Internal Revenue Service funding provision of the Inflation Reduction Act of 2022 (IRA) was the stated topic of discussion or instances when we found significant discussion of the provision. We defined significant discussion as instances when two or more speakers in the multitopic segment discussed the provision with one another. We also included passing mentions, which we defined as instances when a speaker mentioned the provision in a segment about another topic without another speaker engaging with the comment, and teasers, which we defined as instances when the anchor or host promoted a segment about the provision scheduled to air later in the broadcast.

We then reviewed all segments, mentions, and teasers for any claims suggesting that the IRA funding for the IRS would result in the hiring of 87,000 new employees. Within those claims, we also noted when speakers described the employees as “agents” or “armed.”

We split Fox programs into “news” and “opinion” sides. We defined “news” programs as those with anchors, such as Bret Baier or Martha MacCallum, at the helm, while we defined “opinion” programs as those with hosts, such as Tucker Carlson or Laura Ingraham. We used the designations from each anchor or host’s author page on FoxNews.com. We also considered the format of the program; we defined those using a panel format, such as Outnumbered and The Five, as opinion programs.

Mitt Romney's 2010 Tax Disclosure May Be Lacking 'Unrelated Business' Form

Jason Cherkis/Huffington Post

WASHINGTON -- Presidential candidate Mitt Romney's tax returns may be more incomplete in their public release than was previously thought. Filings related to Romney's individual retirement account, already subject to press scrutiny, indicate that the presumptive GOP nominee should have filed a form accounting for unrelated business income taxes.

The unrelated business income tax is set up for tax-exempts like nonprofits and IRAs that engage in commercial activity. Not filing the form, known as a 990-T, may indicate that Romney's IRA funds are held by an offshore account in order to shield them from taxation.

The unrelated business income tax is set up for tax-exempts like nonprofits and IRAs that engage in commercial activity. Not filing the form, known as a 990-T, may indicate that Romney's IRA funds are held by an offshore account in order to shield them from taxation.

Romney campaign spokesperson Andrea Saul did not return multiple requests for the 990-T form, nor did she answer repeated questions related to the matter.

From what Romney has disclosed, there is mounting circumstantial evidence that the IRA may hold offshore investments through what are known as "blocker corporations," which help him avoid paying taxes. Senator Max Baucus (D-Mont.) told The New York Times, "From what I have read about Governor Romney's tax returns, I think it raises very serious questions."

"We know Romney's IRA has Bain funds in it," explained Rebecca J. Wilkins, senior counsel for federal tax policy with the nonpartisan Citizens for Tax Justice. "Bain private equity funds are listed in those assets and those funds are located in the Cayman Islands."

Wilkins says that if Romney's IRA held those funds directly, instead of through a blocker corporation, a 990-T should have been filed. "Typically it doesn't even have to file a tax return," Wilkins says. "But if it has unrelated business income, then it has to pay the unrelated business income tax." And a 990-T would need to have been filed.

HuffPost previously uncovered another document that likely should have been filed among Romney's 2010 tax returns, which would have provided more details on his overseas bank holdings. Such a form has yet to be released by the Romney campaign.

The offshore tax avoidance could be huge. HuffPost recently reported that the candidate has between $20.7 million and $101.6 million in his IRA -- well above the average IRA value of $67,438 in 2010.

Vanity Fair raised the issue in its piece on Romney's offshore accounts:

Romney's I.R.A. also appears to have invested in so-called blocker corporations in the Cayman Islands and elsewhere. U.S. pension funds, foundations, and even I.R.A.'s routinely use offshore blocker corporations to avoid something called the Unrelated Business Income Tax, which was designed to keep nonprofits from competing with ordinary companies in areas outside their core purpose: if you invest directly you get hit with the tax, but if you invest in a blocker, which then invests in the U.S. business, you escape it. Romney's I.R.A. appears to have employed this lawful escape route, and his campaign has used language suggesting that it has. But that would mean the Romney camp's claim that Mitt's tax consequences of investing via the Cayman Islands is 'the very same' as it would have been had he invested directly at home is simply not true."

If Romney had been operating a nonprofit, his use of the offshoring loophole would be similar to the sort of activities Sen. Chuck Grassley (R-Iowa) has long sought to shut down. The senator has made similar tax avoidances a priority since 2007.

Two years ago, Grassley and colleagues in the Senate were stunned to learn that the Boys and Girls Club of America held more than $50 million in offshore accounts and funds, including some held in the Cayman Islands. The organization had to admit that it had used the Caymans to avoid paying the unrelated business income tax.

Grassley's proposed legislation to close the loophole has yet to come up for a vote.

Jill Kozeny, a Grassley spokesperson, told HuffPost that the the senator is not focused on IRAs that may employ offshoring. "This focus hasn't been on unlikely UBIT avoidance by pension funds, IRAs, or other tax-deferred retirement accounts since those funds and accounts are generally not using debt, such as tax-exempt bonds or real estate mortgages, to finance investments, which is what usually triggers UBIT for charities," she said via email.

Wilkins of Citizens for Tax Justice believes the loophole should be closed for IRAs. "Clearly it's an unintended loophole in the tax code," she says. "The reason they are making these investments offshore is to avoid paying the unrelated business tax."