Posts Tagged ‘tax crime’

IRS Agent Accepts Bribes for Favorable Audits

Tuesday, July 20th, 2010

100 dollar bills Hearing you have been selected for audit will concern anyone. When two Minnesota businesspeople received their audit letter, they were likely dismayed. However, like good law-abiding citizens, they met with their accountant and the IRS auditor, Roger Anthony Coombs, at their attorney’s office. You can imagine their surprise when the auditor offered to minimize their taxes owing with a $9,000 payment to himself!

That’s right! He requested a bribe in exchange for a favorable audit result. Fortunately, the quick-thinking businesspeople met again, recorded the conversation, and brought it to the attention of the authorities.

Coombs was arrested early in June and, if found guilty, could serve up to 15 years in prison. (Read the full story about the us IRS officer being bribed here).

This is a shocking news story but it prompts me to think further. Coombs only started working for the IRS in June 2009. If this was his very first foray into bribery, it took him a total of 11 months. Eleven months! Was this guy not vetted before his job? Did he have a squeaky-clean record and only turned bad in less than a year? Is this, in fact, his first attempt at stealing from taxpayers?

Another thing I’m prompted to think about is this: There are about 120,000 people working for the IRS. This is one story of one tax agent who was caught. How many more are there are operating a successful bribery scam? I’m sure it is incredibly tempting for anyone facing an income tax audit and a lot of money owing to the IRS to instead give a small amount to an agent to make the situation go away.

The last thing I’m prompted to think about: If the businesspeople in the story really do owe $60,000 in back taxes, is the IRS still going to send in an auditor to finish the job? These people did the right thing in the face of a very tempting crime. Their possible reward might be an actual audit!

[Image source: AMagill]

Being a whistleblower for the IRS – Protect your country and receive a reward

Sunday, June 20th, 2010

In a recent blog post I talked about the IRS Whistleblower office and the mysteries surrounding the program.

But today I wanted to provide a counterpoint perspective. I don’t want you to think that I’m against whistleblowing in a case where there is a tax cheat, and I do like that this system provides an incentive for taxpayers to help bring to justice those who would cheat on their taxes. I support it for the same reason I support Crimestoppers and other crime-reporting measures: While approved officials should ultimately be the ones to investigate and protect us from lawbreakers, sometimes the “person on the street” can see laws being broken that others cannot.

I also like that the IRS is theoretically incentivizing whistleblowers. (I say “theoretically” because it doesn’t sound like anyone has been paid yet).

Here’s why I really like this program more than many others: While it is not a perfect system, it is a system designed to help stop tax cheats. Frequently, we see many IRS programs initiated that seem to focus on squeezing more tax dollars out of hard-working, honest taxpayers while completely ignoring those who are working the system and getting a loophole. This program focuses on those who truly should be paying more taxes: the tax cheats!

If you are aware of a situation where someone is cheating on their taxes, you could earn a reward while doing your part for the country. You can earn between 15% and 30% of the proceeds collected by the IRS (as long as the amount owed is above $2 million). There are smaller rewards if the amount is less.

You can read more about the IRS’ Whistleblower’s Office and find forms and documentation for reporting.

This has the potential to be a good program as long as the IRS doesn’t get bogged down in bureaucracy. And if they really want it to be successful, they should keep a running total of the amount of payouts they’ve made thanks to whisteblowers.

(Photo credit: katerha)

Conflict of Interest by an IRS Officer

Friday, March 26th, 2010

The Internal Revenue Service is a big organization full of people. Imperfect people. And, although they hold tax payers to a high standard, they themselves need to be held to an equally high standard of ethical responsibility when it comes to our taxes.

Recently, I came across this article from SFGate about an IRS tax officer who crossed the line. You can read the full article here but I’ll summarize it for you and give you some of my own thoughts:

Summary: “IRS Officer Indicted…”
Mary Claybrooks worked as a revenue officer at the Walnut Creek IRS office in California. In her role as a revenue officer, she would work with people who were behind on their taxes. So far, so good; that is what she is supposed to do. But here’s the problem: In advising them on how to get caught up in their taxes, she sent them to a specific mortgage refinancing company for which she was paid a “finder’s fee” or commission for the lead. Over a period of 6 years, from 2002 to 2008, she sent at least 2 people to the company (she was charged with 3 counts of acts affecting a personal financial interest. She earned at least $20,000 for the effort).

My opinion as well as a recommendation to the IRS
First let me say that I am all for people making ethical business deals to get ahead. That is what makes this country great. But this was not ethical. Ms. Claybrooks was not speaking into these taxpayers lives as a business person with an opportunity. She was speaking as a person representing the governing authority of the land and, depending on how she positioned it to the people she was working with, it could have been perceived as equivalent to a bribe.

Tax problems should not enrich the personal lives of IRS because it could lead to a case where individual IRS tax officers make decisions based on what will personally enhance their financial situation.

My advice to the IRS is this: Your tax officers must be held to a higher standard and Claybrooks made a lot of money over a long period of time. Although everyone has the right to privacy, there needs to be checks and balances put in place to protect taxpayers from this unjust scenario from being repeated.

If you are a taxpayer facing tax default and you’re wondering what the next step is, you need to talk to an IRS tax attorney. We work for you (not for the government and not for mortgage refinancers or other related organizations) to help solve tax problems.

Fouts Law Office · 772 Maddox Drive, Suite 114 · East Ellijay, GA 30540 · Tel: (800) 509-2770 · Fax: (706) 636-5293
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