Can IRS Criminal Investigation be politicized?

In October, multiple news reports, citing a Wall Street Journal investigation, disclosed that the Trump administration is considering sweeping reforms of IRS-CI.

These proposals would install political allies in CI leadership and "weaken the involvement of IRS lawyers" in case vetting. Reports state that Gary Shapley — a former IRS-CI supervisory special agent who briefly served as acting IRS commissioner in 2025 — has told associates he intends to replace the current CI chief, Guy Ficco, and has compiled lists of left-leaning groups, nonprofit organizations and major Democratic donors for potential inquiry. 

The press reports that proposed targets include George Soros and the Open Society Foundations, along with other pro-democracy and racial-justice organizations. According to the media, these changes are driven by a desire to exert firmer control over IRS-CI and make it easier to pursue investigations of liberal political actors. As of today, none of these proposals has been formally announced.

DOJ oversight and IRS procedures

Even as these plans circulate, a host of legal and procedural safeguards constrain CI's operations. By law, the Department of Justice exercises ultimate control over criminal tax prosecutions. Under DOJ policy, U.S. attorneys must obtain DOJ Tax Division authorization to initiate tax-related grand jury investigations or bring Title 26 charges, subject to limited delegated exceptions (for example, specific false-or-fictitious refund schemes). IRM 9.4.9 requires a written evaluation by Criminal Tax counsel of the intrusiveness for all tax and tax-related search warrant requests; CI also consults CT counsel on defined issues during investigations. At each stage, from field review teams up through the Tax Division, career prosecutors can reject prosecutions that lack sufficient evidence or a proper foundation. In short, CI cannot unilaterally indict; its case files must pass through DOJ channels and meet established standards 

Parallel safeguards reside in the IRS's own manuals. The Internal Revenue Manual requires agents to follow detailed procedures when opening, conducting and closing investigations. For example, agents must obtain supervisory approval to initiate a case and routinely consult Office of Chief Counsel lawyers on evidence and legal strategy. If implemented, the proposed changes would likely require revising IRM provisions such as 9.4.9 (CT Counsel warrant evaluations) and related CI procedures — rules many practitioners and lawmakers view as critical checks on investigative intrusiveness. 

Statutory protections against political interference

The Tax Code also contains explicit prohibitions on partisan interference. 26 U.S.C. § 7217 makes it a crime for the president, vice president, White House aides or Cabinet-level officials to "request, directly or indirectly, any…IRS employee to conduct or terminate an audit or other investigation of [a] particular taxpayer". By statute, any IRS officer who receives such a request must report it to the Treasury Inspector General for Tax Administration. Willfully violating Section 7217 or failing to report under Section 7217(b) is punishable by a fine up to $5,000, imprisonment up to five years, or both, plus costs of prosecution. 

In plain terms, if a political appointee tried to demand a probe of, say, a left-wing donor, they would not only violate the law but also trigger a criminal reporting requirement. (Notably, Section 7217 was enacted in 1998 in the bipartisan IRS Restructuring Act as a direct response to Nixon-era abuses.) Other statutes — e.g., Section 7212 (omnibus obstruction of IRS duties) and the strict taxpayer confidentiality rules of 26 U.S.C. § 6103 — similarly prohibit IRS officials from disclosing returns or taking direction outside normal channels. In short, any attempt by the White House or political appointees to "weaponize" IRS-CI would run headlong into these federal laws, which were explicitly designed to prevent partisan tax probes.

Historical context: The Nixon precedent

This debate echoes a dark chapter in IRS history. In 1971–74, it was revealed that President Richard Nixon's aides had compiled an "enemies list" of hundreds of individuals and organizations they wished to harass via the IRS and other agencies. Contemporaneous records show an enemies list of about 576 names was delivered to IRS Commissioner Johnnie Walters, who refused to act and secured approval from Treasury Secretary George Shultz to do nothing. The scandal contributed to Nixon's downfall and cemented Congressional resolve to safeguard the IRS. In the 1998 IRS Restructuring and Reform Act, Congress responded by severely limiting political appointments at the IRS and adding Section 7217 to the Tax Code. That law passed the House by a vote of 402–8 and the Senate by 96–2 votes, reflecting bipartisan consensus that politics must never drive IRS actions. The current proposals, which would effectively reverse those reforms, are therefore unprecedented since the Watergate era. Senator Elizabeth Warren and other Senate Democrats have publicly warned against politicizing IRS-CI, emphasizing that any such effort would be unlawful and dangerous.

Impact on taxpayers and criminal tax defense attorneys

For taxpayers and criminal tax defense attorneys, these reports suggest heightened vigilance is needed. Individuals associated with the targeted groups should be prepared for more aggressive scrutiny. Any taxpayer contacted by IRS-CI should immediately consult experienced dual-licensed criminal tax defense attorneys and CPAs who would insist that the investigation follow all standard protocols. 

Defense counsel will need to ensure that CI agents are seeking the usual Chief Counsel advice and DOJ approval; if not, documented deviations can support motions (e.g., suppression or discovery), selective/vindictive-prosecution arguments, or oversight referrals — but internal manual violations do not automatically invalidate a prosecution. If there are signs of political motivation (for example, if a client's name appears on a leaked target list), this fact could itself be used in defense. Remember that under Section 7217, any directive from the White House to audit a specific individual is unlawful — defense lawyers should not hesitate to raise that defense if evidence suggests a top-down order.

Practically speaking, attorneys should consider invoking IRS whistleblower and oversight channels. For instance, 26 U.S.C. § 6103(f)(5) permits an IRS employee or former employee who has or had access to returns/return information to disclose it to the tax-writing committees if they believe it may relate to misconduct, maladministration or taxpayer abuse. Likewise, TIGTA has the authority to investigate political abuse. Documenting and reporting any irregular instructions by political superiors can provide an external check on CI activity. In courtroom strategy, lawyers should scrutinize CI's investigative file for compliance with the IRM and DOJ rules; failure to comply could form the basis for motions to suppress or dismiss. In short, the defense posture must remain proactive: collect evidence of any improper command structure, assert statutory prohibitions such as Section 7217, and push back vigorously if investigations appear to be guided by politics rather than genuine tax violations.

In conclusion, while the reported changes to IRS-CI have not yet been enacted, they underscore the critical importance of procedural independence for fair tax enforcement. The CI division currently operates under multiple layers of review, from career Chief Counsel attorneys to the DOJ Tax Division, all intended to prevent partisan meddling. Any move to dilute those safeguards would significantly affect taxpayer rights. Practitioners should continue to monitor developments and remind clients that longstanding legal protections remain in place. As with any investigative surge, careful documentation, prompt legal advice, and reliance on Congress's prohibitions (like Section 7217) will be the best defense against politically driven prosecutions.