I'm guessing the idea here is that the IRS is changing how they interpret their own internal policy for how they will use the powers given to them by an existin

I'm guessing the idea here is that the IRS is changing how they interpret their own internal policy for how they will use the powers given to them by an existing law, rather than outright passing a new law with retroactive effects. ...but that justification seems like a horribly slippery slope. If you accept that logic, what stops congress from passing a law that creates the "Criminal Investigation Service" and gives their director the power to make things illegal? Would he then be allowed to make a "policy change" retroactively making something illegal and arresting them for it? edit: I think Peugh v. United States actually answers this. Retroactive application of changes to US sentencing guidelines by a government commission were ruled to be a violation of ex post facto protections.