Tax Notes contributing editors Robert Goulder and Joseph J. Thorndike consider the historical context of why the IRS Criminal Investigation division carries guns.

This transcript has been edited for length and clarity.

Robert Goulder: This past summer Congress passed the Inflation Reduction Act (P.L. 117-169), which boosted IRS funding to the tune of $80 billion spread over the next decade.

While that is a lot of money, it actually represents a return to normalcy. The IRS has been the target of decades of defunding, and currently it’s trying to muddle through with historically low staffing levels in several key departments. But this is the IRS after all, so not everyone wants to see it well-funded and well-staffed. Some people are even concerned that the agency will use this influx of money to weaponize their operations, literally.

I’m Bob Goulder with Tax Notes. Together with my colleague Joe Thorndike, we’re going to take a look at the IRS and its guns, because yes, they do have some, and we’re going to do it all in five minutes.

Joe, Congressman Matt Gaetz, R-Fla., went on Fox News a couple of weeks ago and lambasted the IRS for spending money on guns. He tried to make the point that all they really need to process our tax returns is a simple calculator.

Meanwhile, on social media you have these accusations that the IRS is developing its own SWAT teams and they’re poised to kick down your front door and audit you at gunpoint.

So tell us, what is the real story here? Traditionally are IRS employees authorized to carry weapons?

Joseph J. Thorndike: Let’s get right to it. As you said, some IRS agents do carry guns, but honestly that really shouldn’t surprise anyone. I know it’s old, but hasn’t anybody seen The Untouchables? Has everyone forgotten that it took an accountant to catch Al Capone?

Now that movie plays fast and loose with some of its history, but it does get one thing right: The IRS has been chasing dangerous criminals for more than a century.

Robert Goulder: OK Joe, I’m actually old enough, I have seen that movie. I remember it very well, and I also know the story about the IRS getting Al Capone. But here’s the thing, the reason we tell that story is because it’s so unusual.

Isn’t the IRS still basically just a federal agency that collects taxes? Why do they need guns to do that? Maybe it took an accountant to catch Al Capone, but at the end of the day, he was still an accountant.

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Joseph J. Thorndike: So yes, the IRS collects taxes, but it doesn’t just collect taxes. Collecting taxes is a big and complicated job, and it puts the IRS in the middle of some pretty dangerous and sticky situations.

When people start talking about armed agents at the IRS, what they’re really talking about is the agency’s Criminal Investigation division. It used to be called the Intelligence Unit, and it was created in 1919 with just six agents. They were former postal agents, including Elmer Irey, their chief.

The agents of the Intelligence Unit gained some fame in the 1930s for taking down notorious mobsters, like Capone, when other law enforcement agencies wouldn’t or couldn’t. Capone is really well known, but there were others, like beer baron Waxey Gordon in New York, and Enoch “Nucky” Johnson in Atlantic City. You might remember him from HBO’s Boardwalk Empire.

Irey and his agents also dismantled racketeering schemes that plagued all sorts of industries, including the famous poultry racket in New York run by the Herbert brothers, Charles and Arthur, and they were pivotal in solving the famous Lindbergh kidnapping case, definitely the most famous kidnapping in U.S. history.

Let’s be clear: in solving these crimes, the Intelligence Unit wasn’t just scouring checkbooks and bank records. They were doing that, but they were also working undercover inside criminal organizations at a time when J. Edgar Hoover wouldn’t allow his FBI agents to do undercover work because he didn’t trust his agents to stay clean. The FBI got most of the publicity in these years, but Irey and his revenue agents were doing most of the work.

Here’s the thing: undercover work with gangsters is dangerous. Doesn’t it seem reasonable that Irey wanted his agents to be armed?

Robert Goulder: All right, Joe, you’ve convinced me. It’s a dangerous world out there.

The IRS needed guns to take down Al Capone, but that was a long time ago. Haven’t times changed? Why do they need the guns now?

Joseph J. Thorndike: You know, Bob, times really haven’t changed in a lot of important ways. It’s not like criminals have gotten any nicer over the last 90 years. The Criminal Investigation division is still chasing bad guys, and they are still working undercover with those bad guys.

Here’s a story from the agency’s official history from a more recent period. One agent was stabbed repeatedly with an ice pick. Another agent was offered $10,000 to murder the wife of one of the targets. This is not green-eyeshade stuff for accountants armed with calculators, thank you very much Congressman Gaetz. Increasingly this kind of work involves the really bad guys of a globalized criminal world, including drug dealers, terrorists, money launderers, and other kinds of people that you don’t want to invite home for dinner.

So here’s what I say: Is it really so crazy to think that agents facing these kinds of people might need to carry guns?

Robert Goulder: Thank you, Joe. You’ve set the record straight on the sensitive topic of the IRS and their guns.

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