Federal Unions That Have Violated the Hatch Act Must Be Decertified

Editor's note: Detecting such violations of the Hatch Act is challenging, as enforcement relies on external complaints or recorded evidence, leaving many subtle on-duty actions, like private conversations, emails, or social media, undetected and likely allowing similar infractions to continue unnoticed among IRS employees today. Federal employee unions have violated the Hatch Act by engaging in partisan political activity while using their official status or government resources, and claims such violations could warrant decertification. It also suggests that IRS employees could similarly violate the Hatch Act if they use their positions, work time, or government systems to influence elections or support political candidates. The actual determinations of Hatch Act violations rest with federal oversight bodies, not media outlets. Maybe abolishing the IRS would be a step in the right direction replaced with a more equitable tax structure would be the best course of action?
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Introduction

The Internal Revenue Service (IRS) has long been criticized as an inefficient, overly complex, and politically vulnerable bureaucracy that imposes disproportionate burdens on everyday Americans while enabling loopholes for the wealthy and powerful. Abolishing the IRS and replacing the current progressive income tax system with a more equitable alternative, such as a flat tax or national consumption tax, could simplify compliance, reduce government overreach, and promote economic fairness. This analysis draws on extensive research to highlight how the IRS disadvantages small businesses and individuals, explores viable replacement systems, and identifies the primary obstacle: resistance from IRS employees and their unions, who prioritize job security over systemic reform.

Unfair Disadvantages to Small Businesses and Individuals

The IRS's enforcement practices and the complexity of the U.S. tax code create significant inequities, particularly for small businesses and lower-to-middle-income individuals who lack the resources to navigate or challenge the system. Audits disproportionately target these groups, with IRS data showing that small businesses and individuals earning less than $400,000 annually face higher scrutiny compared to large corporations. For instance, small businesses bear nearly two-thirds of all business tax compliance costs, estimated by the IRS at billions annually, due to burdensome paperwork and record-keeping requirements that larger firms can outsource to specialized teams. This disparity arises because big corporations benefit from tax loopholes, subsidies, and lobbying influence, allowing them to minimize liabilities, while small entities struggle with unequal federal tax treatment stemming from IRS budget constraints and enforcement biases.

Individuals face similar hardships, including delays in refund processing that result in the IRS paying over $1.4 billion in additional interest on amended returns for both personal and business filings. Low-income taxpayers and small business owners often perceive the IRS as unfair, with surveys indicating that local organizations view tax laws as biased against them. High-profile issues, such as the IRS's aggressive pursuit of Employee Retention Credit (ERC) claims, have led to unfair fines and audits that threaten small businesses' survival, as highlighted by critics like Kevin O'Leary, who called extended IRS audit powers "unfair and un-American." Additionally, the estate tax, or "death tax," imposes double taxation on family farms and small businesses upon inheritance, forcing sales or closures to cover IRS demands, which further entrenches advantages for wealthy estates with sophisticated planning. These practices not only stifle entrepreneurship but also erode public trust, as evidenced by allegations of politically motivated audits during the Biden administration, which have terrified middle-class families and small operators. In essence, the IRS amplifies economic inequality by prioritizing enforcement against those least equipped to defend themselves, while larger entities exploit the system's complexities.

Benefits of Replacement with a More Equitable Tax System

Replacing the IRS with a streamlined, equitable tax system would eliminate these burdens by shifting away from income-based taxation toward simpler models like a flat tax (also see The State Flat Tax Revolution: Where Things Stand Today) or national consumption tax. A flat tax applies a single rate to all taxable income after basic deductions, broadening the base while lowering overall rates, which could spur economic growth by reducing compliance costs and treating all taxpayers equally. Fourteen states have adopted flat income taxes since 2021, demonstrating feasibility and providing relief through rate reductions that benefit small businesses and individuals without the IRS's invasive oversight. This approach eliminates progressive brackets that penalize success and simplifies filing, potentially reducing the $300 billion annual compliance burden on Americans.

Alternatively, the FairTax Act proposes abolishing the IRS entirely and implementing a national sales tax of around 23-30 percent on goods and services, taxing consumption rather than income or payroll. This would shift the tax burden from wages to spending, benefiting low-income individuals who consume less proportionally and encouraging savings and investment. Proponents argue it promotes fairness by ensuring everyone pays based on lifestyle choices, not earnings, and removes the need for annual filings or audits that disproportionately affect small businesses. Comprehensive reforms could combine elements, such as broadening the base while taxing consumption, to minimize distortions and foster innovation. Overall, these systems would level the playing field, reduce government intrusion into personal finances, and stimulate economic activity by freeing resources currently wasted on IRS compliance.

Primary Obstacle: Resistance from IRS Employees and Unions

The most significant barrier to abolishing the IRS is entrenched opposition from its employees and unions, who view reform as a direct threat to their livelihoods and influence. The National Treasury Employees Union (NTEU), representing IRS workers, has mounted fierce resistance to efficiency drives, such as those proposed by the Department of Government Efficiency (DOGE), including lawsuits and rallies to preserve collective bargaining rights. Federal unions cannot negotiate salaries or strike, but they leverage official time, office space, and legal challenges to block changes (see Trump administration sued over effort to dismantle federal unions), as seen in executive orders under previous administrations that curtailed union perks but faced reversals. With the IRS losing over 20,000 staff during expansions and facing morale issues from leadership churn, employees publicly plead for job retention, emphasizing oaths and unions' role in fighting layoffs.

Public sector unions like the NTEU distort spending priorities, prioritizing member benefits over taxpayer efficiency, and have historically made reforms difficult by framing cuts as attacks on workers. Recent discussions on platforms like X highlight calls to abolish federal unions alongside the IRS, underscoring that union resistance perpetuates the status quo. Even buyout offers under the Trump administration were delayed for IRS staff, illustrating how union protections hinder downsizing. Overcoming this requires political will to end collective bargaining for federal employees, as unions' self-preservation often trumps broader public interest in reform.

Costs

The Internal Revenue Service (IRS) incurs an estimated annual operating cost of approximately $12.3 billion in discretionary funding for fiscal year 2025, supplemented by about $4.7 billion in expenditures from the Inflation Reduction Act (IRA) through March 2025, with total IRA allocations reduced to $37.6 billion after rescissions and cumulative spending reaching $13.8 billion, much of which supports enforcement, taxpayer services, and IT modernization but includes inefficiencies like $408 million in canceled contracts for projects such as cybersecurity and data platforms. This direct governmental expense pales in comparison to the broader financial burden on taxpayers, who face an estimated $536 billion in annual tax compliance costs in 2025, encompassing 7.1 billion hours of lost productivity valued at around $316 billion and $148 billion in out-of-pocket expenses for software, preparers, and filing, disproportionately affecting individuals and small businesses due to the complex tax code. Waste and resource inefficiencies exacerbate this, including processing delays for refunds and claims that frustrate millions, staffing shortages leading to inadequate service and potential $323 billion in foregone tax revenue over a decade from reduced audits, unfair penalty administration eroding compliance, reliance on outdated paper-based systems causing errors and security risks, and programs like Direct File criticized as expensive and dystopian expansions of IRS power, all representing inefficient use of resources and unnecessary burdens on the economy.

Conclusion

Abolishing the IRS in favor of a flat or consumption-based tax system would address systemic inequities by easing burdens on small businesses and individuals, fostering a fairer economic environment free from arbitrary audits and compliance hurdles. However, the path forward is obstructed primarily by IRS employees and unions, whose resistance stems from fears of job loss and diminished power. True reform demands confronting these vested interests to prioritize taxpayer welfare over bureaucratic entrenchment, ultimately paving the way for a more prosperous and equitable America.

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