Texas Attorney General Ken Paxton has ended a lawsuit against the Biden Administration’s Internal Revenue Service (“IRS”) after the agency walked back its planned enforcement of an unlawful policy change that would have drastically interfered with the operations and functionalities of Texas’s child support system. 

In May 2023, Attorney General Paxton sued the IRS to stop an Enforcement Announcement issued by the agency that would have severely limited the ability of child support enforcement agencies to utilize contractor support services. Specifically, after facilitating child support programs’ use of contracted services for over a decade, the IRS unlawfully, arbitrarily, and with no notice, reversed its position and demanded that child support programs terminate contractor access to data necessary for program administration. Compliance with this unlawful directive would have crippled the Texas child support program’s operations, which help deliver vital financial support services to Texas children. 

After Attorney General Paxton’s lawsuit, Texas submitted a plan to the IRS demonstrating that upgrades to the system that had already been underway for some time would significantly address the IRS's concerns. The IRS then issued a letter declaring that would not take action against Texas in light of its technology upgrades. In light of this declaration of no-action, the Office of the Attorney General has filed a notice of voluntary dismissal. However, Texas reserved the right to take the IRS back to court if the Biden Administration resumes similar efforts that would interfere with the operation of Texas’s child support system. 

“Because we intervened early, Texas’s child support program will not be derailed by the Biden Administration’s unlawful agency action,” said Attorney General Paxton. “We reached a positive outcome, but I will not hesitate to resume this litigation if IRS policy changes put Texas children at risk once again.”

To read the filing, click here.