Andrew Bailey
Missouri Attorney General
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Attorney General Bailey Files Suit Against Biden IRS to Obtain Answers About End of Small Business Program

Home 9 Press Release 9 Attorney General Bailey Files Suit Against Biden IRS to Obtain Answers About End of Small Business Program

JEFFERSON CITY, Mo. – Today, Missouri Attorney General Andrew Bailey announced that he filed suit against the Biden Administration’s Internal Revenue Service (IRS) for failing to turn over requested documents in a Freedom of Information Act (FOIA) request. Attorney General Bailey’s inquiry seeks information on the IRS’s obstruction in implementing a crucial economic relief measure designed to support small business owners in Missouri.

“I will always fight for small business owners, who are vital to the success of our communities. The Freedom of Information ACT is the conduit between the general public and the federal government that keeps citizens in the know about the powers that be,” said Attorney General Bailey. “Joe Biden’s IRS is improperly withholding information. It is illegal, and I will fight until I get answers for Missouri business owners.”

The lawsuit attempts to ascertain whether the IRS has obstructed the implementation of a crucial economic relief measure designed to support thousands of small businesses in Missouri. This measure, known as the Employee Retention Credit (ERC), was enacted by the United States Congress under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), subsequently amended by the Taxpayer Certainty and Disaster Tax Relief Act (Relief Act), and Section 3134 of the IRS Code. This legislation was intended to refund a portion of federal taxes to businesses that retained their employees during the state of emergency declared by the President in 2020 and 2021. The IRS’s decision to suspend this tax credit has inflicted significant financial harm on numerous Missouri businesses.

The federal government’s COVID-19 policies and subsequent lockdowns caused severe disruptions in supply chains and resulted in substantial economic loss. These draconian policies forced many Missouri businesses to permanently shut down. While some businesses managed to survive the initial challenges, many continue to face ongoing struggles. The ERC, established by Congress, provided vital financial support that sustained these businesses during the pandemic, despite the adverse impacts of government-mandated closures. It is imperative for Missourians to ascertain whether the IRS has hindered the lawful implementation of this tax relief measure.

General Bailey filed the initial demand for IRS records in May of this year but has yet to receive an adequate response. The lawsuit asserts that the IRS is stifling efforts to fulfill the FOIA request by asking questions of General Bailey that would be virtually unknown to anyone outside of the IRS.

The lawsuit points out, “If federal agencies are allowed to sidestep requests by the AGO and avoid producing the requested documents, how can a citizen ever hope to cut through the ‘red tape’ and take advantage of the rights granted by FOIA? The actions of the IRS are only the tip of the iceberg and are emblematic of a larger pattern and practice of federal agencies using delay and diversion to avoid producing documents requested under FOIA. It is time for the games to end. Consequently, the State of Missouri brings this lawsuit to vindicate the rights granted by the federal FOIA statute.”

General Bailey is asking the Court to issue a declaration that the IRS failed in its legal obligation to lawfully satisfy General Bailey’s FOIA request, and an order compelling the IRS to turn over the requested documents.

The lawsuit can be read here.

The original FOIA request  can be read here.