The IRS at a Crossroads: Reform or Redundancy?

The Internal Revenue Service (IRS) is facing a reckoning. For decades, the agency has operated under an outdated and increasingly ineffective model—one that prioritizes enforcement over engagement and bureaucracy over efficiency. The result? A system that fosters distrust among taxpayers, disproportionately targets small business owners, and sustains an unnecessary network of underutilized offices—many of which serve no meaningful function beyond justifying their own existence.

The recent decision to close over 100 remote offices represents a crucial first step in addressing these inefficiencies. However, this move should not be seen as merely a cost-cutting measure, but rather an opportunity to fundamentally rethink the role of the IRS—transforming it from an adversarial collection agency into a true facilitator of economic participation and voluntary compliance.

At the core of this issue lies a deeply flawed operational model:

• IRS field offices in remote areas sustain themselves on historically low case volumes, leading to inefficiencies, misaligned priorities, and inflated budgets that cannot be justified.

• The criminal enforcement arm of the IRS maintains satellite locations with virtually no case activity, raising serious concerns about the potential for overzealous enforcement and prosecutorial bias simply to justify their own existence.

• The IRS operates as an entity that generates its own necessity, not by solving tax compliance issues collaboratively, but by maintaining a deliberately confusing system that leaves taxpayers vulnerable to enforcement actions—rather than proactively helping them meet their obligations.

The solution is not just to shut down these wasteful offices, but to redefine the IRS's mission, ensuring it actually serves taxpayers rather than treating them as adversaries.

The Problem: A System That Incentivizes Aggressive, Not Effective, Enforcement

1. Remote IRS Offices with No Purpose but Self-Preservation

Many of the IRS's satellite offices, such as those in my home state of Pennsylvania, like Reading or Bethlehem, or in other states such as California, Vermont, and Massachusetts, exist not because of necessity but because of bureaucratic inertia. These offices, originally established under a vastly different tax landscape, now serve dwindling numbers of taxpayers while consuming taxpayer dollars.

A recent report on IRS facility usage found that many of these locations process fewer than a handful of cases per year. Yet, they continue to receive full operational funding—spending hundreds of thousands, if not millions, of dollars annually on facilities, personnel, and overhead costs.

Why? Because in many cases, their mere existence depends on sustaining an enforcement-driven model, even when enforcement is not necessary. These offices are not measured by how efficiently they help taxpayers, but rather by their ability to pursue collections and justify their budgets—a perverse incentive that breeds distrust rather than compliance.

2. The Criminal Enforcement Arm's Misplaced Presence in Low-Activity Areas

Perhaps the most egregious example of bureaucratic waste and mission creep is the presence of IRS criminal enforcement offices in areas with no meaningful criminal tax activity.

The IRS maintains a criminal enforcement division, which in theory, should only be engaged in cases of willful tax fraud, money laundering, and serious financial crimes. But in practice, these enforcement teams continue to operate in areas where their presence is entirely unnecessary.

Consider this:

• In several of these remote offices, the number of criminal tax cases pursued per year is in the single digits—sometimes fewer than five cases in an entire fiscal year.

• Despite this almost non-existent caseload, these offices continue to receive full operational funding.

• The presence of criminal enforcement agents in areas with little criminal activity creates an incentive to over-prosecute marginal cases, simply to justify the office's continued operation.

This dynamic leads to a dangerous and unethical feedback loop:

1. Criminal enforcement agents, whose job security depends on bringing cases, are stationed in areas where there are no real criminals to pursue.

2. To justify their presence, they interpret minor infractions as criminal conduct, applying a bias toward enforcement even when it is unwarranted.

3. As a result, small and medium-sized business owners—who lack the legal and financial resources to fight back—become the primary targets of investigations that should never have been pursued in the first place.

This is not a system designed to catch real tax criminals. It is a system designed to sustain itself at the expense of taxpayers.

The Impact: Eroding Public Trust and Encouraging Over-Aggressive Collection

1. A System That Relies on Confusion, Not Compliance

The IRS does not operate like Social Security or Medicare, which are structured around clear benefits and administrative simplicity. Instead, the IRS has maintained a system that is deliberately opaque and confusing.

• The complexity of the tax code ensures that even well-intentioned taxpayers struggle to comply fully.

• Rather than serving as a resource for education and assistance, the IRS allows confusion to persist, knowing that it will ultimately result in more penalties and collection opportunities.

This is particularly damaging to small business owners, who often lack the sophisticated accounting teams and legal advisors available to large corporations. Instead of working with these businesses to promote compliance, the IRS treats them as easy collection targets, leveraging its enforcement power against those least equipped to fight back.

2. Misaligned Incentives: Enforcement Over Efficiency

IRS offices are not measured by how effectively they serve the taxpayer—they are measured by their ability to collect revenue through enforcement.

• Instead of rewarding efficiency, taxpayer satisfaction, or voluntary compliance rates, the system incentivizes penalty enforcement, aggressive collections, and criminal investigations.

• This dynamic perpetuates a culture of hostility between the IRS and taxpayers, reinforcing the perception that the agency exists not to ensure compliance, but to punish non-compliance.

This is an entirely avoidable problem. A restructured IRS could work in partnership with taxpayers rather than against them—but that requires dismantling the current adversarial framework.

The Solution: Turning IRS Offices into Economic Development and Taxpayer Collaboration Centers

It is not enough to shut down unnecessary IRS offices—we need to replace them with institutions that actually serve taxpayers.

1. Transforming Taxpayer Assistance Centers into Economic Growth Hubs

Instead of serving as enforcement-driven bureaucracies, IRS field offices should become business assistance hubs that help taxpayers navigate tax credits, optimize deductions, and proactively comply with tax laws.

• These centers should be staffed with tax advisors, not enforcers, who can guide business owners through complex deductions and incentives.

• The focus should be on helping entrepreneurs leverage tax credits, not penalizing them for honest mistakes.

• By fostering a culture of collaboration, these offices can encourage compliance through education rather than intimidation.

2. Eliminating the Criminal Enforcement Arm in Low-Activity Regions

IRS criminal enforcement should not exist in areas with no meaningful case volume.

• These resources should be consolidated at the federal level and only deployed in true financial crime hotspots.

• Small businesses and taxpayers should not live under the constant threat of unwarranted criminal scrutiny, simply because an underused field office needs to justify its budget.

3. Creating a New IRS That Prioritizes Compliance Through Engagement

Instead of an enforcement-driven IRS, we need a service-driven IRS:

• One that educates before it penalizes.

• One that helps taxpayers comply proactively rather than punishing them retroactively.

• One that rebuilds trust rather than continuing to destroy it.

Conclusion: A Smarter, More Effective IRS That Works for the People

Closing unnecessary IRS offices is a good start—but the real goal must be systemic reform.

We must shift from an enforcement-first model to a compliance-first model—one that works in partnership with taxpayers rather than against them.

If we are serious about fixing the IRS, we must demand an agency that is transparent, accountable, and dedicated to serving the American people—not just sustaining itself at their expense.