Reuters recently carried a scary story – the IRS exchanges information with the Federal Bureau of Investigation, Drug Enforcement Administration, National Security Agency and the Central Intelligence Agency. If the stories about IRS targeting certain tea party groups didn’t scare you, this post will.
While its normal for law enforcement agencies to share some information on known criminals, some shadowy agencies like the NSA and CIA often engage in clandestine activities such as monitoring telephone conversations in the name of national security. Whatever your feelings on that topic, recent headlines make it clear that the NSA monitors domestic as well as international calls and Internet traffic.
To date, those activities have supposedly been directed at terrorists and threats to our national security or involved known criminals. Those rules may have changed.
If airport screeners working for TSA catch a person trying to leave the United States with a million dollars in cash, no one would be surprised to discover that the money was turned over to the DEA or IRS for investigation. But IRS agents getting audit leads because an NSA analyst was snooping on a private phone call and heard somebody talking about taxes has privacy advocates concerned.
Reuters recently uncovered an internal document from the IRS – the Internal Revenue Manual -which directed IRS agents to omit any reference to audit leads coming from the DEA. Although that section of the manual was deleted in 2007, the IRS won’t answer questions about the practice. DEA did comment, however. They claim the practice is legal.
Not everyone agrees. Sen. Paul Rand says he is troubled that the DEA “is trying to cover up a program that investigates Americans. If the Constitution still has any sway, a government that is constantly overreaching on security while completely neglecting liberty is in grave violation of our founding doctrine.” We agree.
IRS audit defense is already quite challenging. If the agency is allowed to hide information it could make the task nearly impossible.
We understand the IRS’ mission to collect the proper amount of tax. Not more and not less. They must do so, however, in a manner that doesn’t violate our fundamental rights of privacy. Allowing investigators from other agencies to share information obtained without a warrant is troubling. While we hope the practice isn’t widespread, it represents a troubling trend in law enforcement. (Recently we talked to one IRS official in Chicago that said people who don’t pay their taxes are “domestic terrorists”.)
The obvious takeaway from all these posts is to pay your taxes. If you made a mistake or are having problems, seek out a professional for help. Whatever you do, don’t discuss your problems with others. While it remains doubtful that the CIA is listening in, your risks go up if you are outside the U.S. More importantly, the IRS can obtain their own search warrants to conduct wiretaps and are not reliant on the FBI or spy agencies.
If you are the subject of an audit or criminal investigation, give us a call. Our IRS audit defense lawyers can help protect your rights and minimize the amounts you may have to pay. We can help with other tax matters as well such as state and local tax audit defense, penalty abatement, U.S. Tax Court appeals, and trust fund recovery penalty audits. All inquiries are protected by the attorney – client privilege and kept in strict confidence. For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct).
Mahany & Ertl – America’s Tax Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Minneapolis, Minnesota; Portland, Maine and San Francisco, California. IRS services available in all jurisdictions.
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Posted by Brian Mahany, Esq