TaxProf Blog

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

Wednesday, March 30, 2016

The IRS Scandal, Day 1056

Microsoft IRSFollowing up on my previous posts on the IRS's claim that it had erased the hard drive of its director of transfer pricing operations despite a court order to preserve all documents concerning the IRS's hiring of an elite law firm to assist its audit of Microsoft (The IRS Scandal, Days 987, 989, 994, 1002):

Statement of U.S. Department of Justice Trial Attorneys, Microsoft v. IRS, Nos. 2:15-cv-00369, 00850 (D.C. W.D. Wa. Mar. 25, 2016) (record citations omitted):

On January 15, 2016, the Department of Justice, Tax Division, notified the Court that the Internal Revenue Service (“IRS”) had reported that it inadvertently had not captured a computer hard drive used by one agreed-upon custodian, Samuel Maruca, and that the hard drive had been sanitized. Since then, there have been two developments regarding Mr. Maruca’s hard drive. First, the IRS continued to look for responsive records, and in doing so 19 it located potentially responsive user-generated content that had been previously on Mr. Maruca’s hard drive and saved elsewhere in July, 2014, only several weeks before Mr. Maruca separated from the IRS. The Department of Justice disclosed this source of potentially responsive  documents to Microsoft’s counsel on February 11, 2016.

Second, during discussions on and from March 14 through March 23, 2016, IRS Chief Counsel attorneys notified the undersigned Department of Justice counsel that the IRS located a hard drive that appears to be Mr. Maruca’s hard drive. The IRS Chief Counsel attorneys believe that the hard drive has not been sanitized, the hard drive is in working condition, and the hard drive contains user-generated content. The IRS Chief Counsel attorneys informed Department of Justice counsel that they are presently processing the content for review and then will review the content for potentially responsive records. Non-exempt responsive records not already produced 10 to plaintiff will be produced as part of the on-going production by the IRS.

http://taxprof.typepad.com/taxprof_blog/2016/03/the-irs-scandal-day-1056.html

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Comments

As to eradication of evidence at the IRS, incompetence and indifference were always more believable explanations than a coordinated cover-up.

Posted by: AMTbuff | Mar 30, 2016 9:25:50 AM

Letting the IRS decide what is responsive or what isn't, is a stupid idea. The court should seize the hard drive.

Posted by: wodun | Mar 30, 2016 11:23:13 PM

Mr. wodun: Wouldn't it be more efficient just to abolish the IRS and have the federal court's administer the federal tax system?

Posted by: Publius Novus | Mar 31, 2016 7:23:51 AM