Paul L. Caron

Friday, June 13, 2014

The IRS Scandal, Day 400

IRS Logo 2Power Line Blog, Bill Henck: Inside the IRS, Part 3:

William Henck has worked inside the IRS Office of the Chief Counsel as an attorney for over 26 years. We posted his personal account, including his testimony to a retaliatory audit conducted by the IRS against him, this past February in “Inside the IRS” and followed up with Inside the IRS, part 2″ in May. ... Henck’s experience illuminates a deeply sinister aspect of the current controversy over the agency’s illegal activities.

American Spectator:  Mickelson Targeted Like Tea Partiers?:

Here's how it sounds to me: Famous rich athlete complains about the negative incentives caused by high taxes. Government usees especially aggressive tactics to try to find him guilty of securities violations, not least perhaps intentionally leaking the existence of an investigation, a story which the Obama-cheerleading, tax-loving NY Times is only too happy to cover. The Times then reports that "Mr. Mickelson’s ties to the investigation are weaker than previously reported." But of course much of the damage to Mickelson is done, harming his reputation as well as distracting him from his profession and the rest of his life.

IRS News, IRS Scandal, Tax | Permalink


1. This is kind of a funny vignette, since what Henck is campaigning for is more vigorous tax enforcement. His complaint in this installment is that an Associate Chief Counsel turned down his request to pursue a case that would restrict a business tax credit. Put another way, Henck is arguing that the ACC in question is too liberal in his/her interpretation of the IRC.

2. The suggestion that Hencks is revealing “corruption” is inaccurate. “Corruption,” properly understood, would also involve venality–in other words, IRS executives taking or not taking particular actions in order to profit monetarily from such action or inaction. There is no suggestion here or anywhere else in the “IRS Scandal, Day XXX,” that any IRS or Chief Counsel executive is taking bribes or gifts or any kind of monetary inducement for their action or inaction. In my long experience with the IRS, most decisions taken by IRS and Chief Counsel executives appear to be driven by bureaucratic timidity in the first instance, and by budgetary inadequacies in the second.

3. Sen. Coburn, in his segment, suggests that the IRS is insufficiently “transparent.” This commentary would be laughable, except that Coburn knows or should know that the lack of transparency is imposed by federal statute; it is Congress that imposed the lack of transparency on the agency. 26 U.S.C. § 6103 places comprehensive restrictions on IRS transparency, backed up by civil and criminal penalty statutes. See 26 U.S.C. §§ 7217 (felony criminal penalties) & 7431 (civil damages penalties). Only the various national security and intelligence agencies have more stringent confidentiality statutes than the IRS. Is Sen. Coburn suggesting that the IRS should assess, audit, investigate, and collect taxes from Americans in public view? That tax returns should be publicly available? That accusations of tax fraud should be announced in the newspapers and on TV?

4. Last, it is true that the IRS and Chief Counsel are non-responsive to Congress and the President. That is because Congress insulated the agency from “political” or “partisan” influence by sharply restricting the political appointees in the agencies. Only one IRS executive is a political appointee. Only one Chief Counsel executive is a political appointee. EVERYONE ELSE in both agencies is a civil servant.

Posted by: Publius Novus | Jun 13, 2014 9:34:38 AM