A 10-year veteran Internal Revenue Service (IRS) attorney has demanded a Congressional audit of the IRS to investigate the agency’s alleged role in allowing American corporations to illegally avoid paying billions of dollars in taxes at the same time the agency is cracking down on individuals and small businesses.
In a letter to Treasury Secretary Jacob Lew, IRS commissioner John A. Koskinen, and IRS chief counsel William Wilkins, Jane J. Kim, an attorney in the IRS Office of the Chief Counsel in New York, accused IRS executives of “deliberately” facilitating multi-billion dollar tax giveaways. The letter, dated October 19, will add further pressure on the agency, which is under fire for allegedly targeting conservative and Tea Party groups.
Kim, who has previously blown the whistle on “gross waste of government resources” in the IRS New York field offices, wrote in her new letter that senior IRS officials have “intentionally undermined the authority of the IRS Whistleblower Office” to avoid taking action “in cases involving billions in corporate taxes due.” The IRS also refuses to enforce laws for “large corporate taxpayers,” resulting in giveaways of further billions, despite applying the same laws with “draconian strictness to small business, the self-employed, and wage-earning individuals.”
The IRS attorney’s letter was copied to Jason Foster, chief investigative counsel for the Senate Committee on the Judiciary, as well as several other senators and Congressional representatives, including Elizabeth Warren, Maxine Waters, Alan Grayson, Bernie Sanders, Charles Grassley, Mike Lee, Rand Paul, and Ted Cruz. They could not be reached for comment.
Whistleblowers shut down
Following coverage of her earlier allegations by Pulitzer Prize winning tax journalist David Cay Johnston, Kim was approached by a private sector lawyer representing corporate whistleblowers to the IRS, who told her that numerous legitimate investigations into corporate tax fraud were being shut down. Her letter sent on Sunday to the US Treasury and IRS described three such cases.
In one case, the IRS was auditing a US company that fraudulently under-reported its profits by nearly $3 billion annually. On behalf of the IRS, the whistleblower had drafted a detailed report proving the fraud, but the agency “closed its audit without ever asking a question or reviewing the documents submitted.” As much as $4 billion in taxes were lost.
In another instance, “a solid case” allegedly involving $6 billion of taxes due was “inexplicably shut down” according to IRS criminal investigation agents. Instead, detailed evidence of fraud and malfeasance “in hundreds to thousands of specific accounts” was ignored. The agent blamed links between senior IRS executives and outside corporations associated with the case.
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