Watchdog Group Steps Up Battle with IRS Over Records

A federal government watchdog group has stepped up its fight against what it alleges is a blatant concealment of public records by the Internal Revenue Service (IRS).

The Transactional Records Access Center (TRAC) last week filed a motion in U.S. District Court in Seattle, Wash., accusing the IRS of failing to abide by a 1976 court order requiring the agency to make available certain detailed information regarding its enforcement of tax laws. In a separate action in April, TRAC sued the IRS in U.S. District Court in Washington, D.C. alleging it has violated the federal Freedom of Information Act (FOIA) by withholding information about databases and programs it uses to generate reports and statistics on tax law enforcement activity.

Media and government observers often cite TRAC, which is based at Syracuse University, for its research reports identifying enforcement, staffing and spending problems within federal government agencies. The IRS has been a frequent subject of the reports that include a 2000 finding that agency officers were auditing poor people at a higher rate than the wealthy; a 2004 finding that corporate audits and criminal enforcement activities by the IRS were declining, and a 2005 fining that the tax audits of large corporations were disproportionately low compared to the companies’ income and assets.

Those reports are accessible from TRAC’s Web site, www.trac.syr.edu.

“All of these and many other similar findings were based on the kinds of data that the IRS has been unlawfully withholding from TRAC and the American people,” Susan B. Long, a TRAC co-director said in announcing the motion filing.

“The IRS disagrees with the stance taken by TRAC, and we do not believe we are in violation of a court order,” IRS spokesman Terry Lemons said last Friday, adding that the agency has received 80 FOIA requests from TRAC in the past 18 months and has spent thousands of dollars complying. TRAC’s motion says that the IRS told Long it ceased providing the data because of “the burden of compiling such statistics.”

The latest motion was filed in federal court in Seattle because that’s where Long in 1976 won the order requiring the IRS to provide the data. At that time, Long, now a Syracuse University professor, was seeking the information as part of the research needed to pursue her doctorate degree at the University of Washington.
TRAC said the IRS had largely abided by that order until mid-2004. Coincidentally, 2004 is when TRAC issued findings that the pace of IRS audits of corporations declined 26 percent in the first half of the year from the same period in 2003 despite the agency’s pledge to crack down on violators. Lemons, in a Fox News report at that time, questioned the findings and accused TRAC of making “sweeping projections’ based on a limited time frame of study.

In the lawsuit filed in the nation’s capitol last April, TRAC claims the IRS has been withholding documentation “in flat defiance” of the FOIA. TRAC in the suit seeks records on systems and measures used to supply IRS managers with such data as how many audits were conducted, how much auditor time was spent and the amount of unpaid taxes the audits found.

Lemons last week said that starting in June, 2004, TRAC began submitting FOIA requests that “were much broader and sweeping” than its earlier requests” and wanted data not normally gathered by the IRS. “Although the IRS has responded to many of these FOIA requests, many more are pending, and the IRS continues working on these requests, he said, adding, “The IRS continues to provide annual data to TRAC “just as it has done for years.”

You may like these other stories...

Legislation coming out of Washington just might reduce homeowners' burden for disaster insurance. It's a topic very much on everyone's minds since the mudslide in Oso, Washington. The loss of human life was...
Divorce is hard, and the IRS isn't going to make it any easier. The IRS generally says "no" to tax deductions that might ease the pain of divorce. In certain circumstances, however, you might be able to salvage...
IRS chief: New rule on the way for tax-exempt groupsIRS Commissioner John Koskinen told the USA Today on Monday that the agency will likely rewrite a proposed rule regulating the political activities of nonprofit groups to...

Upcoming CPE Webinars

Apr 17
In this exciting presentation Excel expert David H. Ringstrom, CPA shares tricks that you can use with pivot tables every day. Remember, either you work Excel, or it works you!
Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.