Internal Revenue Service - Criticism - Allegations of Abuse

Allegations of Abuse

The IRS has on more than one occasion been accused of abusive behavior. Testimony was given before a Senate subcommittee that focused on cases of overly aggressive IRS collection tactics in considering a need for legislation to give taxpayers greater protection in disputes with the agency.

A statement given in hearings before the Senate Finance Committee criticized the IRS:

oes the IRS correct abuses when they become aware of them? Oftentimes, they do. However, the more important question is, does the IRS cover up occurrences of abuse? The answer is, yes! If the true number of incidences of taxpayer abuse were ever known, the public would be appalled. If the public also ever knew the number of abuses 'covered up' by the IRS, there could be a tax revolt.

Congress passed the Taxpayer Bill of Rights III on July 22, 1998, which shifted the burden of proof from the taxpayer to the IRS in certain limited situations. The IRS retains the legal authority to enforce liens and seize assets without obtaining judgment in court.

Michael Minns was the defense lawyer in a case against the IRS on behalf of James and Pamela Moran, after an initial indictment in what Minns asserts was an IRS smear campaign that virtually canvassed the taxpayers' own hometown and surrounding area. The original indictment was associated with the Morans' involvement with a tax shelter provider, Anderson's Ark & Associates. The Morans were eventually acquitted in the case.

Minns also had previously asserted that the behavior of two IRS attorneys at law, Kenneth McWade and William A. Sims, constituted legal misconduct and recommended them for disbarment. Following an investigation, the law licenses of the IRS attorneys were duly suspended for a two-year period after a federal court ruling found that the two had indeed defrauded the courts in connection with 1,300 tax shelter cases. In 2003, the United States Court of Appeals for the Ninth Circuit concluded that the IRS lawyers had corruptly agreed with certain taxpayers that no tax collection actions would be taken against them—in return for testimony against other taxpayers. The court also asked why the IRS had not punished the two.