Ahem... I thought that one of the most important reasons for a "Fair Tax" in the first place was to ABOLISH THE IRS, not merely make it "smaller." Sheesh.
The IRS remains to oversee excise taxes.
The portion of the IRS that oversees the Income Tax, FICA, MEDICARE, ESTATE, GIFT, CORPORATE Tax is eliminated, defunded, and the records are destroyed.
From Title III of H.R. 25:
"SEC. 301. PHASE-OUT OF ADMINISTRATION OF REPEALED FEDERAL TAXES.
(a) Appropriations- Appropriations for any expenses of the Internal Revenue Service including processing tax returns for years prior to the repeal of the taxes repealed by title I of this Act, revenue accounting, management, transfer of payroll and wage data to the Social Security Administration for years after fiscal year 2009 shall not be authorized.
(b) Records- Federal records related to the administration of taxes repealed by title I of this Act shall be destroyed by the end of fiscal year 2009, except that any records necessary to calculate Social Security benefits shall be retained by the Social Security Administration and any records necessary to support ongoing litigation with respect to taxes owed or refunds due shall be retained until final disposition of such litigation."