I think Saul took care of the immediate police threat (bribery, etc), but you're right, there's still official record of the purchase.
The IRS is happy most of the time as long as you pay them. I don't see it being a big deal, Walt is already selling his gambling story and if the IRS comes knocking, Walt can play it off as a "relapse" and give them their money. He also has Saul, which will help clear everything up.
I disagree with the quality of the writing decreasing, however, at least not in this episode. The first six episodes of the season were very surreal and took us way the fuck out to what the fuck land, but it is all starting to fit together. People said the same thing about last season, and then they found it to be the best (I know that some people still feel that it peaked in season 2, I'm not in that camp but I'm not going to argue with anybody that is). The scene with Jesse at the NA (or whatever the fuck it is supposed to be) meeting was intense, and as well written as any other moving scene in the series.
This episode was our first return to reality in a sense. I'm glad the action is finally starting to rise. It was rising in the first two episodes, and then Open House came along (episode 3) and kind of took some of the life out of the season. That will be the worst ever episode of Breaking Bad in my opinion. Episodes 4-6 were still great, but the plot was basically remaining stationary for a moment, allowing Jesse to settle into his new role, get Hank back on track, and show us how unstable and retarded Walt has become (notice how he now wears red, which was once Jesse's color, and his behavior lately is more what we would have expected out of Jesse at times, just pure idiocy without an ounce of professionalism, while Jesse is wearing the designated "professional gangster" color in black all season).