IRS undergoing investigation

The Inspector General of the Treasury Department is conducting an investigation of alleged data tampering by IRS personnel.

Mike McKinney of the IG’s Washington office notified the operators of TPI, a Colorado Springs forensic firm, that material their company produced has been forwarded to Treasury field investigators for follow-up.

Bob Schulz, writing for Conspiracy Planet, an Internet news site, said Richard and Victoria Osborn, operators of TPI, have given sworn testimony and offered documentation that shows the IRS routinely violates Americans’ due process rights by manipulating taxpayers’ individual master files.

Schulz said this unlawful data tampering is carried out for the purposes of fabricating time-barred tax assessments; falsely certifying official records used in federal courts to support illegal assessments; “short paying” interest legally owed to taxpayers; seizing Social Security benefits from taxpayers in direct violation of U.S. law; and creating fraudulent penalty and interest payments against taxpayers.

The information was made public at a National Press Club press conference on April 8. Somehow, the national media did not think it newsworthy.

This is not the first time the IRS has attracted scrutiny from other government agencies. Back in 1999, the General Accounting Office audited the tax collectors and reported the IRS “cannot do some of the basic accounting and record-keeping tasks that it expects American taxpayers to do.”

The findings were reported by the Northwest Florida Daily News.

It said that among the faults the GAO found were: the IRS has a problem keeping track of unpaid taxes properly, meaning it fails to concentrate collection efforts on those taxpayers most likely to pay. In 1999, that meant only about $22 billion of the $26 billion in unpaid taxes were collected that year, while $119 billion—more than half—were written off.

Some $17 million in fraudulent or inappropriate refunds was paid in the first nine months of 1998. Investigators caught an additional $65 million that was earmarked for improper refunding.

The auditors found the agency had difficulty keeping a handle on items like a Chevy Blazer, laptop computers, television sets, VCRs, fax machines and even a $300,000 laser printer.

Auditors said most of the confusion stemmed from paperwork problems rather than thefts—the Blazer was leased, and someone forgot to take it off the books.

The GAO said the IRS had lax computer security, which brings up privacy and confidentiality concerns, and persists in its habit of shipping packages of taxpayer checks around Washington by bicycle couriers.

That wasn’t all. Investigators found 56 cases of employee theft amounting to nearly $1 million, and that was just one field office.

Gregory Kurtz oversaw that audit for the GAO. He told the House Government Reform Subcommittee: “Think of this as not balancing your checkbook with the monthly bank statement and at the same time having a system prone to error.”

J.D. Quisenberry, a former IRS investigator and longtime whistleblower on the agency’s scandals, pointed out inept procedures can lead to corrupt or even brutal collection practices as IRS employees try to make quotas, even when standard practices and procedures are inadequate.

These problems were found a year after reforms designed to correct them were put in place.

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