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Nathan Mehrens: IRS Getting “Creative”




|| By NATHAN MEHRENS || In the wake of the IRS scandals involving the targeting of Tea Party and other conservative organizations and leaks of their legally-protected information, one would have thought that the agency would become a little more careful in how it handles its review and enforcement activities.

That didn’t happen.

Last year, the IRS quietly promulgated a new, temporary regulation that allows it to give part of its review and enforcement powers to outside entities, such as law firms.  These “contractors are permitted to participate fully in a summons interview.  Full participation includes, but is not limited to, receipt, review, and use of summoned books, papers, records, or other data, being present during summons interviews, questioning the person providing testimony under oath, and asking a summoned person’s representative to clarify an objection or an assertion of privilege.”

Since it is generally illegal under the Internal Revenue Code (IRC) for the IRS to share taxpayer information with anyone, how did they manage to do this? They got creative.

Some exceptions to the IRC’s general rule are in place to allow the IRS to perform its work.  Here, the IRS has shoehorned one of those exceptions in a way that effectively eviscerates the intent and plain meaning of the exception.

The IRC generally prohibits the disclosure of return or return information at IRC § 6103(a).

The terms “return and return information” are defined by the IRC to include just about every kind of financial information of a taxpayer, their tax status, and whether the IRS is looking at their tax returns at IRC § 6103(b)(2).

Disclosure of tax return or return information is a felony punishable by five years in prison and a $5,000 fine at IRC § 7213(a)(1).

One of the exceptions to the general rule was created to allow the IRS to have contracted personnel work on things like the physical equipment that handles tax returns.  This allows a copy repair company to do things like fix a broken copier and remove a paper jam from a copier without a felony occurring …

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Nathan Mehrens is President of Americans for Limited Government Foundation.  This piece (reprinted with permission) originally appeared on