Attorney General Paxton sued the Internal Revenue Service (“IRS”) after a devastating policy change that would severely limit the ability of child support enforcement agencies (“CSEAs”) across the country to utilize valuable contractor resources to support the families they serve. The lawsuit aims to reverse the destructive policy.  

“It is unconscionable that millions of families will face the consequences of the Biden Administration’s actions, which will negatively impact child support programs across the nation as they support families in need of economic security,” said Attorney General Paxton. “It is shameful that Joe Biden is attempting to make it harder for child support programs to be properly administered. The policy set by the Biden Administration will have devastating consequences for millions of American children, and Joe Biden must answer as to why his Administration is trying to make it so difficult for child support enforcement agencies to do their jobs.”

On February 15, 2023, CSEAs nationwide were notified by the IRS of a policy change mandating the termination of contractor access to data necessary for the administration of Title IV-D child support programs, effective October 1, 2023. Nationally, Title IV-D programs rely on contractor services to help deliver financial, medical, and dental support to more than 13.2 million children. In Texas alone, contractor services supported the state’s collection of nearly $4.5 billion for 1.5 million child support cases statewide during the fiscal year 2022. 

The abrupt policy shift contradicts the position previously held by the IRS, which acknowledged the need for contractor access to information in previous audits. The IRS has vetted these contractor services for over a decade and held findings in abeyance pending resolution by the IRS and the Office of Child Support Enforcement due to conflicting interpretations of federal statutes. The sudden policy change threatens nearly all Title IV-D child support programs. 

Beyond being an abrupt disservice to families, the effective date by which CSEAs must comply with the rule change is unfeasible for CSEAs to offset the contracted services gutted by the federal government’s decision. IV-D programs are at risk for violating 42 U.S. Code § 654(18), which allows states to take the steps necessary to collect past-due support from overpayments to the Secretary of the Treasury. This decision by the IRS will result in the loss of at least $300 million annually in child support collections for Texas families.  

To read the full lawsuit, click here