The success of any federal tax policy depends on the functioning of the Internal Revenue Service. Indeed, the success of any government is inseparable from its capacity to raise revenue. A government that cannot tax is no government at all. Since Trump took office for the second time, however, the IRS has lost a quarter of its workforce and three-quarters of its senior leadership. Much of its modernization agenda has been halted, and its taxpayer privacy protections have been trampled. Reversing the damage is a day-one, mission-critical task for the next administration.

Perennial optimist that I am, I would propose going further than merely reversing the damage. What would it mean to imagine not just a good IRS, but a great one? The IRS collects more than $5 trillion a year. Each additional dollar invested in the IRS’s enforcement on high-income taxpayers brings in more than $12 for public purposes. In 2024, the agency reduced the “tax gap”—the tax money owed but not paid voluntarily and on time—by collecting more than $77 billion in underpaid taxes, enough money to fund WIC, the nutrition program for mothers and their babies, for a decade. The agency’s law enforcement personnel combat white-collar crime, money laundering, and international drug trafficking. And the IRS delivers over $85 billion in cash benefits to American families every year through the Child Tax Credit and the Earned Income Tax Credit, lifting at least 4.4 million children out of poverty. We should support the IRS’s mission unapologetically. Americans deserve not just an adequate, but a splendid IRS.

What would a splendid IRS achieve? For most households, income tax filing should be a ten-minute task they can do from their phone. When tax filers make mistakes, they should have easy access to well-trained IRS staff who can help get the tax filer back on track. When people seek to defraud taxpayers and the public, the agency should be equipped to enforce the law fairly, with the resources and talent to match wits with even a billionaire’s lawyers and accountants. And when the nation next faces a crisis like COVID-19 and turns to the IRS to send emergency aid, the agency should have funding concomitant with the importance of its work, so it can once again keep millions of American families afloat.

A splendid IRS would be the cornerstone of a reinvigorated democracy. As I demonstrate in my new book The Price of Democracy, the link between taxation and representation is no mere slogan. Though conservatives are quick to paint taxation as tyranny, dictators are in fact loath to impose taxes because taxation make leaders dependent upon their people. Authoritarians far prefer other forms of revenue—fees and fines, bribes, gifts, the spoils of war—that are imposed in an arbitrary fashion and can be readily targeted against political enemies.

Taxation is different. Taxes are far less discretionary and typically apply to essential economic activities: buying, selling, working, or owning. This makes the government financially reliant upon the public—a reliance that, historically, has pushed kings toward accepting representative institutions. And with the advent of representative systems, taxes go up, not down. When taxpayers see the state as legitimate, and when they can use the levers of government to influence policymaking, they are more inclined to foot the resulting bill. Tax administration also helps build the competence of a government’s bureaucracy, giving a democracy the capacity to achieve the policy goals that popular majorities demand. Free countries are high tax-countries.

It is no coincidence, then, that as the Trump Administration has sought to consolidate power, it has also undermined the IRS. Tax enforcement has been sabotaged, particularly where enforcement focused on the very wealthy. The IRS unit focused on the taxes of the very wealthiest people lost 38 percent of its employees in the first two months of Trump’s second term. Hundreds of IRS special agents were temporarily diverted to immigration enforcement, totaling nearly 1,800 reassigned IRS employees over the course of the year. Meanwhile, the number of open audits dropped by more than 100,000 and the Department of Justice dissolved its own tax division.

The Administration’s actions have not occurred without resistance, and it is worth pausing for a moment to recognize the heroism of the IRS and Treasury staff who have sacrificed their careers in service of the rule of law. Under enormous pressure, key civil servants refused to sign off on the illegal mass firing of federal employees and on illegal data-sharing between the IRS and Immigration and Customs Enforcement (ICE). They defended the federal payments system against Department of Government Efficiency (DOGE) interference. And when asked to reconsider an audit of a “high-profile friend of the President,” they did not comply.

These decisions—and likely others that have not been publicly reported—forestalled some of the Administration’s most egregious attempts to abuse the public trust or, where the policies could not be stopped, ensured that the public was informed and that implementation was delayed. Without those efforts, it would have been harder to mount successful court cases, like those that have (as of this writing) halted the transfer of taxpayer data for the purposes of mass deportation.

But with the forced departure of much of the IRS’s civil servant leadership, the bulwark against politicization and abuse has been severely eroded. In a December 2025 survey by the Partnership for Public Service, less than 20 percent of respondents working in the Treasury Department expressed confidence that they could “report a suspected violation of a law, rule or regulation without experiencing retaliation.” This marks an extraordinary shift: In previous years, nearly three quarters of Treasury employees have said they could report malfeasance without fear of reprisal.

In other words, the IRS is being corrupted as well as weakened. In 1971, President Nixon tried and failed to get an IRS Commissioner who would “go after our enemies and not go after our friends.” As President Trump has launched attacks on the tax-exempt status of Harvard University, he is reportedly preparing to reconfigure the agency’s criminal investigations unit to go after left-leaning groups. After launching a brazen personal lawsuit against the tax agency, he has attempted to seize nearly $1.8 billion in public monies. The Administration has also issued a declaration that President Trump, his family, and his businesses are immune from audits. The IRS Commissioner position, held by seven people since January 2025, is currently vacant.

Trump’s attacks on the independent, nonpartisan IRS are unmatched in their severity, but the erosion of tax enforcement has a long history. One of President Trump’s first executive orders demanded an open-ended hiring freeze at the IRS, but the agency also labored under a hiring freeze between 2011 and 2018. In the late 2010s, staffing was no higher than it had been in 1973. DOGE’s meddling marked the end of many promising modernization efforts, but the IRS has struggled for decades with a multiplicity of aging systems.

The IRS saw persistent underinvestment because generations of politicians have used the agency as a punching bag to burnish their anti-tax credentials. Chronic neglect has been punctuated by sudden assaults. In 1978, 1997, and 2013, congressional grandstanding over purported enforcement scandals tarnished the IRS’s image, though investigations eventually found scant or no wrongdoing at the tax agency. But each time, the spectacle provided a shot in the arm to conservative organizing—perhaps most notably in the 1978 instance, when resistance against the IRS’s efforts to remove the tax-exempt status of whites-only segregation academies helped spark the founding of the Moral Majority.

When the Biden Administration attempted to invest an additional $80 billion in the IRS, the conservative reaction was nothing short of hysterical. In response to the IRS’s plan to hire additional accountants and lawyers to combat high-end tax evasion, Iowa Republican Senator Chuck Grassley speculated about the possibility of an IRS “strike force that goes in with AK-15s already loaded, ready to shoot some small-business person in Iowa.” Grassley’s words now seem eerily prescient of Trump’s deployment of federal immigration agents to American cities; applied to the Biden-era IRS, they were a lurid fantasy. Grassley’s unhinged sentiments were echoed across the Republican Party. A bill to rescind the new IRS funding was the first one passed by Republicans after they retook control of the House in 2023, and clawing back the money was a perennial demand in the budget fights that followed. In the end, over $50 billion of the initial $80 billion was withdrawn.

Opposition to tax enforcement, then, is a standby maneuver in the conservative activist playbook, and that is unlikely to change. Any plan to rebuild the IRS will need to grapple with powerful political opposition.

As I and others have argued, the ascendancy of the conservative anti-tax movement is inseparable from the Republican Party’s descent into anti-democratic politics. This is not a politics that can be bargained with.

It is appealing to imagine that, through careful legislative design, future IRS investments could be protected—for example, by some kind of trust fund or dedicated funding stream. But I am skeptical that procedure can sidestep or substitute for politics. There are not laws that preclude lawbreaking. The Consumer Financial Protection Bureau, for example, was funded outside of congressional appropriations with transfers from the Federal Reserve; though court cases are ongoing, the agency is largely dismantled. The United States Institute of Peace is not an executive branch agency, but it was seized by DOGE. Members of the institute’s staff were escorted out by police, and, despite ongoing litigation, Donald Trump’s name has been emblazoned upon the building.

Rather than seeking procedural fixes to a political problem, legislators must put rebuilding the IRS at the heart of a sweeping anti-corruption, rule-of-law agenda that speaks unapologetically in favor of democratic governance. Americans must once again be convinced that the government can be a force for good in their lives, and that the institutions that enact our democracy are worth paying for. Far too many liberal politicians remain mealy-mouthed about the value of government. But there is no way to create a popular mandate for an agenda one is never willing to openly advocate. It is with this larger agenda in mind that I propose two simple principles for the IRS’s reconstruction.

The first of these is to enforce the rule of law. There must be thorough investigation and swift prosecution of all taxpayer privacy violations that may have occurred under the Trump Administration, including during the DOGE period, in the effort to share IRS data with ICE, and in the Administration’s attempts to target its enemies and reward its friends. Taxpayers should be individually informed if their data was improperly examined. Their privacy protections are clearly delineated in law. It is illegal not just to disclose but even to inspect taxpayer data outside of specific situations delineated in Section 6103 of the U.S. tax code. Taxpayers whose information was improperly disclosed can sue for a minimum of $1,000 in civil damages. Moreover, strong legal protections prevent key executive branch officials from interfering in tax enforcement. Violation of these rules, outlined in Section 7217 of the tax code, carries a penalty of up to $5,000 and five years in prison.

If these laws are not properly enforced, we risk perpetuating the culture of elite impunity that led us to the current moment. As many scholars of democratic backsliding have noted, winking at the criminality of a would-be authoritarian encourages additional, future assaults on the rule of law.

That culture of elite impunity has long been evident in the rampant tax evasion at the upper end of the income spectrum. One dire consequence of the ginned-up IRS enforcement “scandals” was an agency in a perpetual defensive crouch. The result has been a far freer ride for tax evaders. The top 10 percent highest-income households are responsible for most of the underreported income that results in hundreds of billions of dollars owed but not paid to the IRS each year.

A big slice of the Biden-era IRS reinvestment was intended to curtail those revenue losses: Then-Treasury Secretary Janet Yellen directed that the enforcement dollars be focused on those earning more than $400,000 a year. Of course, that important work was rapidly undone in the Trump era. It takes highly trained experts to unravel the tax shenanigans of the very wealthy, and far fewer of those experts remain in government service today.

Which brings us to the second principle for the reconstruction of the IRS: focus on the people.

The road to DOGE was paved by decades of unanswered disparagement of government in general and public employees in particular. Though a quarter of federal civil servants are veterans, the public image of military servicemembers is rarely extended to federal bureaucrats. But civil servants are also driven by patriotism and commitment to mission. That dedication remains unshaken; while large majorities now report disillusionment with their political leadership, more than 95 percent of federal employees surveyed by the Partnership for Public Service last winter agreed that, “It is important to me that my work contributes to the public good.” Many IRS employees could make more money—sometimes vastly more—working in the private sector. They choose to work for the country.

The rebuilding of the IRS simply will not succeed if we do not convince tens of thousands more Americans to make that same choice. But persuading Americans to serve the nation is harder now because of the cruel mistreatment of the federal workforce over the last year. And that is another reason why leaders must speak convincingly in favor of government. Reagan-esque insults to the federal bureaucracy will not bring the next generation to public service. But President John F. Kennedy once appealed to Americans to ask themselves what they can do for their country. If they are asked again, I believe Americans will answer the call.

Of course, Americans will be able to enter government service only if there is a hiring plan to back up the rhetoric. Producing that plan is an enormous endeavor, even with the invaluable first draft provided by the Biden-era IRS investments and the lessons of their first years of implementation.

Since last summer, I’ve been interviewing recent IRS civil servants about their experiences and thoughts about how the agency could be rebuilt. Here are a few of the recommendations I’ve been hearing. One, we must sweep away longstanding barriers to federal employment, from unintelligible job descriptions to inertial and arcane hiring processes. Two, we must bring talent back into government rather than relying upon expensive and inefficient contractors. Direct File, the superb free public tax preparation software, was built not by third-party vendors but by in-house technologists in the federal service. And finally, we need to ease and encourage the return of the many talented and dedicated civil servants pushed out of government by the Trump Administration and into the private sector. I would not have anticipated that federal employees dismissed this year would be willing to return to service. My interviewees have told me otherwise.

Like everyone else working on federal policy these days, I get one reaction to any proposal I make: “This all sounds great, but how on earth do we get there from here?” The odds against rebuilding the IRS seem long—just as long, perhaps, as the odds of revitalizing our democracy. So, I want to conclude with a story about another time we built a federal tax agency from the ground up…and, as it happens, saved the republic.

By 1862, it had become clear that defeating the Confederacy was going to require a new kind of war. Bombarded with petitions demanding higher taxation to support the war effort, Congress instituted a new revenue act that taxed, as one Treasury official put it, “everything under the sun”: interest, inheritances, dividends, banks, railroads, licenses for almost every imaginable profession, spirits, sugar, salt, tobacco, telegrams, all the way down to billiard tables and playing cards.

The law also included, over the vehement opposition of many northeastern manufacturers and financiers, a federal income tax that would eventually touch 10 percent of Northern households. It was a progressive tax, taking 3 percent of incomes over $600 and 5 percent of incomes over $10,000, and it grew more progressive as the war wore on. As so many young men were sent to fight and die, it was only right that millionaires like “Mr. W. B. Astor” and “Commodore Vanderbilt,” wrote The New York Herald, “contribute a fair proportion of their wealth to the support of the national government.”

But the federal government hadn’t applied domestic taxes in nearly 50 years. “I examined the records of the Excise Bureau established during the War of 1812, but they furnished no aid whatever,” recalled George Boutwell, the abolitionist former Massachusetts governor tasked with building a federal revenue agency from scratch.

President Lincoln signed the new tax law on July 1, 1862. Boutwell received a copy on his arrival in Washington two weeks later and set to work. Within a year, the revenue service went from Boutwell and three clerks to the largest department in the government, with nearly four thousand staff who worked to collect $39.1 million. Federal revenue doubled that year, and again in the year after that. This capacity to raise funds was an important factor in the victory of the United States. As one Confederate leader later said: “We were whipped in the Treasury Department.”

Today, as the federal government is attempting to fish monuments to the Confederacy from their rightful place in history’s scrapyard, we should recognize the power of the federal tax service to defend the United States—and perhaps even help bring forth, as the old phrase goes, a “new birth of freedom.” The task of the future is rebuilding the American government. That means rebuilding our tax capacity, so that our government is strong enough to be the democracy we need.