TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, January 1, 2016

The IRS Scandal, Day 967

IRS Logo 2The Blaze op-ed:  Despite New Limits, The IRS is Not Yet Under Control, by Andrew F. Quinlan (President, Center for Freedom and Prosperity):

The massive omnibus spending package passed by Congress included new limits on the IRS, in particular on the agency’s ability to harass political non-profits. Congress is not done, however, as an ongoing dispute between the tax collection agency and Microsoft demonstrates that the IRS continues to operate outside the bounds of the law.

The IRS is in the midst of an almost nine-year audit of Microsoft. That’s unusual given the three-year statutory limit for audits. Sometimes they can be extended when necessary, but the IRS has asked and been granted permission by Microsoft to do so eight times already. Most notable, however, is the fact that Microsoft just wants to pay its bill and move on, but the IRS has refused to submit one. That might be due to the fact that the never-ending audit is proving quite profitable for a powerful, politically-connected law firm.

Again acting outside normal procedure, the IRS brought in lawyers from Quinn Emanuel Urquhart & Sullivan, a major contributor to Barack Obama and the Democrat Party. This despite the fact that the IRS already employs a veritable army of lawyers and accountants with more relevant expertise.

The use of outside lawyers raises serious concerns regarding taxpayer privacy and potential conflicts of interest. Namely, that a $1,000-per-hour firm is going to be less motivated to resolve a case quickly and efficiently than the taxpayers footing their bill.

The $2.2 million contract for Quinn Emanuel also comes at a time when the IRS is claiming poverty and a lack of sufficient funds for assisting taxpayers.

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