WSJ: IRS Is Audited Over Its Safeguards Against Favored Treatment Of Big Business

Following up on my previous posts:

• NY Times: Tax Lawyers At Top Accounting Firms Cycle In And Out Of Top Treasury Posts And Reap Huge Reward For Their Clients And Themselves (Sept. 21, 2021)
• NY Times: Treasury Is Asked To Investigate Its Hiring Of Tax Lawyers From Big Accounting Firms (Feb. 28, 2022)

Wall Street Journal, IRS Is Audited Over Its Safeguards Against Favored Treatment of Big Business:

The Internal Revenue Service’s watchdog is examining how the agency guards against favoring large businesses and global companies in compliance matters as part of a broad audit.

The U.S. Treasury Inspector General for Tax Administration, or Tigta, has reached out to people inside and outside the IRS for information since starting work on the audit late last year, according to a person familiar with the inquiry. Among the lines of inquiry is how the IRS handles conflicts of interest and the revolving door between the accounting industry and IRS, the person said.

Tigta has requested information about whistleblower cases that died within the IRS or have sat inside the agency for years, the person said. The office also has expressed an interest in the IRS’s use of tools created by Congress to combat abusive tax practices, such as a federal law intended to dissuade companies from engaging in transactions that have no economic purpose other than to minimize their tax bills, the person said.

“Tigta is planning an audit to assess the adequacy of processes and procedures to identify and prevent IRS conflicts of interest or preferential tax treatment to large businesses and international companies and their representatives in tax compliance matters,” a spokesman for the inspector general said in a statement. ...

The IRS whistleblower program is perceived among those in the industry as less effective than comparable programs in the Securities and Exchange Commission and Justice Department. These programs provide whistleblowers who provide useful information to the agencies a cut of money recovered by the government. ...

In October, Sen. Elizabeth Warren (D., Mass.) and Rep. Pramila Jayapal (D., Wash.) sent letters to large accounting firms for information about employees who had rotated in and out of government positions. The letters cited a New York Times article last year that identified 35 examples of lawyers at large accounting firms leaving for government jobs and then returning to their old firms. ...

The lawmakers sent a letter in February to J. Russell George, inspector general for tax administration, and the deputy inspector general of the Treasury Department, Richard Delmar, requesting that they open “an inquiry into the revolving door between the country’s top accounting firms and the federal government.”