Texas Attorney General Ken Paxton has achieved a standoff with the Biden Administration's Internal Revenue Service, leading to the IRS retracting its previous enforcement announcement. The dispute centered on the IRS's sudden alteration of a policy that would have put a stop to the use of contractor support services by child support enforcement agencies—a shift from its over ten-year stance. Paxton sued the IRS to prevent what he described as serious encroachment on Texas's ability to administer its child support program, which could have been hampered by the agency's change in policy.

The legal action taken by Paxton seemed to quickly throw to act the IRS, causing them to reconsider their position. The IRS had issued demands that would require child support programs to cut off contractor access to essential data. According to a statement obtained by the Texas Attorney General's office, Texas responded by putting forward a proposal to the IRS that demonstrated substantial technology upgrades already in the works, which would apparently address the concerns that prompted the IRS's initial announcement.

Following the submission of Texas's plans, the IRS backed down, sending a letter to the state that it would refrain from taking any enforcement action in light of the tech upgrades made. This turnaround led Paxton's office to file a notice of voluntary dismissal of their lawsuit, but not without a caveat—a reservation of the right to challenge the IRS again should the Administration attempt to obstruct Texas’s child support system in the future.

"Because we intervened early, Texas’s child support program will not be derved by the Biden Administration’s unlawful agency action," said Attorney General Paxton. He added firmly, "We reached a positive outcome, but I will not hesitate to resume this litigation if IRS policy changes to put Texas children at risk once again." This stance underscores the vigilance still felt by the Attorney General's Office despite the recent de-escalation.