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The author discusses the Joint Committee on Taxation's finding, after a three-year investigation, that IRS officials have not acted with bias against conservative organizations when making decisions granting tax-exempt status.

Issues concerning the "ten deadly sins" IRS agents can commit and plans for the Treasury Inspector General for Tax Administration (TIGTA) to investigate employees are examined. Being found guilty of a "sin" may result in employee termination. Topics include a list of the sins, media coverage of IRS investigations, and legitimacy of allegations.

The US Senate Finance Committee uncovered many instances in which IRS officials chose to ignore significant abuse by agents of their authority. One solution to terminating agent misconduct was to place IRS' Criminal Investigation Division under the direction of the FBI and the DEA. Committee witness testimony was remarkable because whistleblowers IRS officials testified against the misconduct of their peers and superiors.

Reactions to the Republican-led Senate Finance Committee's investigation of IRS misconduct included reports disputing witness veracity and criticizing the Committee's agenda. A restaurant owner's testimony against the IRS was disputed because the Committee refused to objectively consider the IRS's explanation. Main points in an IRS whistleblower's testimony were discredited by a Treasury Department inspector general's report, prompting criticism from Democratic leadership that the Republicans are using the hearings for political reasons rather than for reforming the IRS.

The US Department of Justice has filed a petition to enforce summonses against accounting firm Arthur Andersen. The IRS is investigating the firm's marketing of abusive tax shelters to clients. Arthur Andersen is seeking to preserve its clients' confidentiality.

Issues related to the General Accounting Office's (GAO) investigation into allegations made against the IRS during 1998 Senate Finance Committee hearings are examined, focusing on the GAO conclusions that many allegations were insubstantial. Topics include the background for the hearings, which were meant to highlight taxpayer rights, and specific allegations made during them.

Witnesses at the Virginia Conference on Federal Taxation on Jun 5, 1999, questioned the validity and consequences of accusations waged against the IRS during the April 1998 Senate Finance Committee hearings concentrating on IRS abuse. The IRS Restructuring and Reform Act, passed in the wake of the abuse hearings, may have unduly restricted IRS collecting procedures. Witnesses also discussed the definition of voluntary disclosure and how it may preclude prosecution.

Allegations of IRS abuse during 1997 Senate Finance Committee hearings are being called into question in 1999. One key witness against the IRS was an IRS employee who failed to disclose her poor performance ratings. Independent investigations may refute other testimony offered against the IRS. The IRS's ability to terminate employees has been complicated by the political context of IRS investigations.

Issues related to a petition filed by the IRS to gain credit card customer information from American Express and MasterCard are examined, focusing on the use of credit cards in the Caribbean to transfer assets from trusts. Topics include the mechanics of sheltering income by using credit cards and the IRS powers to issue summons under IRC section 7609(f).

Issues related to IRS investigations into employees who have been charged by taxpayers with harassing taxpayers are examined, focusing on the small percentage of charges that are substantiated by the IRS investigations. Topics include the most frequent charges lodged against the IRS under IRC section 1203; the 95% of charges that, after investigation, revealed no employee misconduct; and the 28 employees fired by the IRS after investigations.

The General Accounting Office announced in a May 24, 1999, report to the Senate Finance Committee it could find no evidence of wrongdoing by the IRS for allegations first made during the April 1998 hearings on IRS abuse. Insufficient documentation was available to prove IRS managers were given preferential treatment over other employees, the IRS retaliates against corporate whistleblowers, and racial discrimination exists in a Milwaukee, WI office. The Finance Committee released the report on Jun 18, 1999, and was disappointed with the contents.

Issues related to an employment discrimination suit filed by an IRS Revenue Agent are examined, focusing on the background of the case and a federal district court judge's decision to dismiss the case. Topics include the IRS agent's testimony against the IRS in 1997 Senate Finance Committee hearings, her claims of retaliation, and her history of performance reviews as an IRS agent.

Issues related to investigations of complaints regarding IRS employees are examined, focusing on the insistence by the National Treasury Employees Union that all investigative interviews conducted without union representation should be expunged from the public record.

Issues related to the amount of requests for information under the Freedom of Information Act (FOIA) improperly denied by the IRS are examined, focusing on a report issued by Treasury Dept's Inspector General for Tax Administration. Topics include exceptions to FOIA, IRS compliance with the Privacy Act of 1974, and IRS procedures for identifying taxpayers who request information over the telephone.

Issues concerning the Senate Finance Committee's decision not to hold more hearings regarding retaliations against IRS whistle blowers are discussed. Topics include a decision by IRS Commissioner Charles O. Rossotti to negotiate settlements with whistle blowers and Senate moves to make any hearings more concerned with policy reform rather than the fate of individual whistle blowers.

Reports made by the General Accounting Office to the Senate Finance Committee regarding 1998 hearings on IRS abuse may not be made public because to do so would violate witness confidentiality. The reports contain information on the tax returns of witnesses who testified at the hearings. Such information is confidential under IRC section 6103. Second-hand descriptions of the reports vindicate the IRS and question the Finance Committee's role in the IRS probe. Unfortunately, the public will not understand the extent of IRS or Finance Committee culpability unless the reports are released.

Treasury Sec Robert E. Rubin was asked, by 21 Republican Congress members, to investigate why two of Bill Clinton's outspoken critics, Paula Jones and Billy Dale, are being audited by the IRS. The likelihood of these audits being coincidence is slim, according to the Republicans, based on how many people in their income brackets are audited, which makes Republicans question whether there is a political motive to the audits. Jones is suing Clinton for harassment and Dale was fired from the White House travel office by Clinton.

The US Congress plans to investigate allegations of politically-motivated IRS audits of exempt organizations. Joint Committee on Taxation chief Kenneth J. Kies has ordered the investigations following press allegations of improper audits of the Heritage Foundation and other conservative groups. Margaret Richardson, IRS Commissioner, welcomes the investigation, believing it will vindicate the IRS.

An investigation of an improperly redacted memo concerning congressional testimony on the low-income housing credit points to possible involvement by IRS officials. The unredacted version of the 1994 memo indicates that 1990 testimony on the Service's anti-fraud initiatives may have been misleading and a misuse of the agency's disclosure power under IRC s. 6103. IRS Commissioner Margaret Richardson has replied to the allegations, but believes the IRS officials did not intentionally mislead Congress.

The US Senate Committee on Finance has agreed to request $300,000 in additional funding to hire three aides to investigate possible abuses of taxpayers by the IRS. The committee shares IRS oversight duties with other committees and wishes to focus on IRS treatment of taxpayers. Chair William V. Roth states that because of Republican Caucus rules the committee does not have the resources to engage in the type of comprehensive investigation that the matter deserves.

An IRS memo on problems in the low-income housing credit program may have been illegally redacted to mislead Congress, according to IRS restructuring commission member Sen. Charles Grassley. He has asked IRS commissioner Margaret Richardson to look into the circumstances surrounding the 1994 memo and the redactions. Grassley believes the IRS is improperly hiding behind IRC 6103 privacy protections. Tax Analyst attorney William Dobrovir, who maintains the IRS violated the Freedom of Information Act, is being investigated in conjunction with the memo.

The IRS's role in the White House 'Travelgate' incident may be reexamined as part of Rep William Clinger's investigation into the matter. Following the termination of White House travel office staff in May 1993, the IRS appears to have conducted an unusual investigation of UltrAir, a company handling White House press travel arrangements. Clinger has threatened White House aides with contempt of Congress citations for withholding related documents under claims of executive privilege.