{"id":22572,"date":"2026-04-15T10:14:42","date_gmt":"2026-04-15T14:14:42","guid":{"rendered":"https:\/\/jimbovard.com\/blog\/?p=22572"},"modified":"2026-04-15T10:14:42","modified_gmt":"2026-04-15T14:14:42","slug":"the-growing-irs-dictatorship-wall-street-journal-1994","status":"publish","type":"post","link":"https:\/\/jimbovard.com\/blog\/2026\/04\/15\/the-growing-irs-dictatorship-wall-street-journal-1994\/","title":{"rendered":"The Growing IRS Dictatorship – Wall Street Journal 1994"},"content":{"rendered":"

On Tax Day 2026, remember that the IRS was unleashed long ago.\u00a0 \u00a0Here\u2019s a piece of mine published on April 14, 1994 \u2013<\/p>\n

\"\"<\/a><\/p>\n

Wall Street Journal\u00a0 -The Growing IRS Dictatorship<\/h2>\n

By James Bovard<\/p>\n

A Gallup Poll released last week found that two-thirds of Americans believe that the Internal Revenue Service abuses its power. Yet few people realize exactly how much arbitrary power politicians and judges have granted IRS agents over other Americans. The IRS has become the authoritarian means to paternalistic ends.<\/strong><\/p>\n

People can fall under the IRS\u2019s sway even when they believe they are dealing with their own tax accountant. The IRS has conducted hundreds of undercover operations in recent years in which IRS agents have been officially permitted to masquerade as professionals and to entice other citizens to violate tax laws. The IRS admitted in 1989 that it was using 900 controlled informants (double agents) and that 40 of those informants were accountants.<\/p>\n

IRS undercover and other agents are practically given official permission to scorn the law of the land. The IRS\u2019s official manual states: \u201cIn receiving unsolicited information for the first time from an informant, the Service may accept the information and, in accordance with its value, may pay for such information even if it may have been obtained illegally by the informant.\u201d A federal appeals court ruled on Dec. 30 that evidence illegally seized by an FBI agent can be used by the IRS in a tax prosecution.<\/p>\n

The IRS has multiplied its use of force against U.S. citizens in recent years<\/strong>. Since 1980, the number of levies \u2014 IRS seizures of bank accounts and paychecks \u2014 has increased fourfold, reaching 3.3 million in 1992. Unfortunately, the IRS makes tens of thousands of unjustified seizures each year, according to the General Accounting Office.<\/p>\n

The most frequent reason for the wrongful levies is the IRS\u2019s failure to accurately record citizens\u2019 and businesses\u2019 tax payments. The GAO noted: \u201cIRS procedures require that levy notices be reviewed for completeness and readability prior to mailing. This process, however, is normally limited to a check of the name and address appearing on the levy.\u201d This is a pathetic standard of review for seizing private citizens\u2019 savings.<\/p>\n

IRS officials have sweeping discretionary power to financially destroy people\u2019s lives.<\/strong> Take, for example, the case of Melvin Powers. In 1983 the IRS decided to investigate Mr. Powers\u2019s 1978 and 1979 tax returns. Mr. Powers was a Houston builder and owner of five office buildings; he had only an eighth-grade education. The IRS had made no effort to examine Mr. Powers\u2019s tax returns during the three years of the statute of limitations. Six weeks before the statute expired, an IRS agent asked Mr. Powers to sign a waiver of his statute of limitations, allowing the IRS to investigate him for another three years. Mr. Powers willingly agreed. In 1986, the IRS disallowed almost all of Mr. Powers\u2019s business deductions for 1978 and 1979 and demanded $7,145,266.71 in back taxes, interest and penalties.<\/p>\n

Shortly after the IRS\u2019s assessment, a bankruptcy court trustee \u201cseized all of [Mr. Powers\u2019s] operations, caused [Mr. Powers] to vacate his office premises, and took possession of his books and records for all years,\u201d as a 1993 Tax Court decision noted. Then, in early 1991, the IRS reversed itself and conceded that Mr. Powers actually had legitimate losses for the years under scrutiny and thus owed no taxes for those years. After IRS officials canceled the $7 million tax bill, Mr. Powers successfully sued the IRS to cover his legal costs for the case. U.S. Tax Court Judge John Colvin noted last year that the IRS \u201ccontends that there is a basis in law for the notice of deficiency because the notice of deficiency is presumed correct\u201d and that the IRS \u201cmade no attempt to obtain information about the case before\u201d demanding a $7 million payment.<\/p>\n

Amazingly, the IRS declares that it is entitled to impose penalties or seize property for overdue taxes even after the agency admits sending tax deficiency notices to the wrong address. Turn to the case of Clayton and Darlene Powell.<\/p>\n

The Powells moved from Adelphi, Md., to Mitchellville, Md., in late 1987, and filed a tax return with their new address in early 1988. A few weeks after the IRS received the Powells\u2019 new address, the agency sent a notice of deficiency for their 1984 tax return to their old address. The local post office \u2014 though it had the forwarding address \u2014 returned the notice to the IRS. Though the three-year statute of limitations had expired on the Powells\u2019 1984 return, on Dec. 28, 1988, the IRS sent a notice to their new address giving the couple 10 days to pay $6,864 in back taxes, interest and penalties or have their property seized. The Powells paid and then sued the IRS to get a refund.<\/p>\n

The federal appeals court ruled that \u201cthe Powells are entirely innocent\u201d and ordered the IRS to issue a refund. The IRS then appealed the decision to the Supreme Court, contending that as long as the IRS mailed a tax deficiency notice to a taxpayer\u2019s \u201clast known address,\u201d the taxpayer must be presumed to have received the notice \u2014 even when it is indisputable that he did not receive it.<\/p>\n

The Justice Department, in its brief on this case, noted that the IRS \u201cissues more than 2 million notices of deficiency each year and approximately 240,000 of those notices were returned undelivered during the past year.\u201d The Justice Department whined that requiring the IRS to actually notify citizens of tax assessments before final seizure notices would impose \u201cunmanageable detective burdens\u201d on the IRS. \u201cThis case threatens to create a \u2018window of time\u2019 during which the Internal Revenue Service may be helpless to protect its rights in pursuing delinquent taxpayers,\u201d the Justice Department fretted.<\/p>\n

The Supreme Court denied the government\u2019s request to re-examine the Powell case. Yet even though the IRS lost in federal appeals court on this issue and paid back the Powells, the agency has formally chosen to disregard that court\u2019s verdict \u2014 to follow a policy of \u201cnonacquiescence,\u201d in legal terms. The IRS believes the court made a mistake and thus that the agency has no obligation to respect its decision. This means average taxpayers will have to spend thousands of dollars in legal costs to re-achieve the basic rights that the appeals court sought to give them. The Powell case epitomizes the IRS perspective that the citizen has an unlimited obligation to comply with its demands \u2014 even when the IRS fails to inform the citizen of its demands.<\/strong><\/p>\n

Supreme Court Justice George Sutherland declared in 1933, \u201cThe powers of taxation are broad, but the distinction between taxation and confiscation must still be observed.\u201d Unfortunately, this distinction is increasingly lost to the average taxpayer facing the full force of government revenue collectors.<\/p>\n

\u2014Mr. Bovard is the author of \u201cLost Rights: The Destruction of American Liberty<\/a>,\u201d just out from St. Martin\u2019s Press.<\/p>\n","protected":false},"excerpt":{"rendered":"

On Tax Day 2026, remember that the IRS was unleashed long ago.\u00a0 \u00a0Here\u2019s a piece of mine published on April 14, 1994 \u2013 Wall Street Journal\u00a0 -The Growing IRS Dictatorship By James Bovard A Gallup Poll released last week found that two-thirds of Americans believe that the Internal Revenue Service abuses its power. Yet few […]<\/p>\n","protected":false},"author":1,"featured_media":22573,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[4812,3285,49,4814,4811,4813,279],"class_list":["post-22572","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-george-sutherland","tag-internal-revenue-service","tag-irs","tag-john-colvin","tag-penalty","tag-tax-court","tag-tyranny-2"],"yoast_head":"\nThe Growing IRS Dictatorship - Wall Street Journal 1994 - James Bovard<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/jimbovard.com\/blog\/2026\/04\/15\/the-growing-irs-dictatorship-wall-street-journal-1994\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Growing IRS Dictatorship - Wall Street Journal 1994 - James Bovard\" \/>\n<meta property=\"og:description\" content=\"On Tax Day 2026, remember that the IRS was unleashed long ago.\u00a0 \u00a0Here\u2019s a piece of mine published on April 14, 1994 \u2013 Wall Street Journal\u00a0 -The Growing IRS Dictatorship By James Bovard A Gallup Poll released last week found that two-thirds of Americans believe that the Internal Revenue Service abuses its power. 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