On May 6th the Treasury Inspector General for Tax Administration (“TIGTA” or internal government watchdog over the IRS) issued a scathing report that found, from 2003 through 2013, 1,580 IRS employees committed willful tax violations. These cases included willful overstatement of expenses, claiming the First-Time Homebuyer Tax Credit without buying a home, and repeated failure to timely file required Federal tax returns.
It should be noted that a willful act is the voluntary intentional violation of a known legal duty (timely filing of a tax return or accurate reporting of a tax obligation). A willful violation of tax law is a criminal act. This means jail time to the average person, but not IRS employees according to the TIGTA report.
Current law requires that the IRS terminate employees who are found to have willfully violated tax law. However, the law also gives the IRS Commissioner the sole authority to mitigate cases to a lesser penalty. The TIGTA report disclosed that the IRS Commissioner exercised his sole authority on numerous occasions to mitigate termination of IRS employees who committed tax evasion.
Although the IRS concluded their own employees committed criminal tax acts, 61 percent of these criminal tax evaders continue to work for the IRS. In fact, some employees received promotions and awards within one year after their willful tax noncompliance cases were closed. The report does not disclose that any of these criminals were referred for prosecution. The IRS Commissioner made sure these employees, some whom had significant and sometimes repeated tax noncompliance issues, and a history of other conduct issues, kept their positions and remained out of the media spotlight.
As a reformed federal prosecutor and current tax defense attorney, I personally find it alarming that the IRS can prosecute every day citizens for the same exact acts it allows its own employees to commit with carte blanche immunity. This leaves a curiously strong bad taste.
If you need assistance concerning taxes or an IRS investigation, do not hesitate to contact a tax lawyer in Orange County. According to the TIGTA report only IRS employees – not everyone else – are immune to the efforts being taken by the US government. The Orange County Tax Attorneys at Wilson Tax Law Group have experience in federal tax prosecutions and IRS and state tax matters. You can reach the Wilson Tax Law Group at 714-463-4430.