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IRS Violates Longstanding Court Order; Agency Has Withheld Tax Enforcement Statistics Since 2004

Jan. 6, 2006

IRS Violates Longstanding Court Order; Agency Has Withheld Tax Enforcement Statistics Since 2004

Withholding Violates 1976 Consent Decree

SEATTLE – In violation of a longstanding court order, the Internal Revenue Service (IRS) has knowingly stopped providing a widely recognized data expert with detailed statistics about how the agency enforces the nation’s tax laws, according to a motion filed in the United States District Court for the Western District of Washington.

The legal challenge was brought by Susan B. Long, a professor of Management Information and Decision Sciences at Syracuse University’s Martin J. Whitman School of Management. Long has used the IRS’s own data to document its performance for more than 30 years. Since 1989 she also has been co-director of the Transactional Records Access Clearinghouse (TRAC), a data research organization that provides the public with detailed information about the operation of hundreds of federal agencies, including the IRS.

Long obtained a court order on July 23, 1976, from Judge Walter McGovern in connection with Long’s studies of the agency while she was pursuing her Ph.D. at the University of Washington. The order requires the IRS to provide her statistical data on an ongoing basis about its audit, collection and other enforcement activities.

For many years, the IRS largely abided by McGovern’s order. Since mid-2004, however, the agency has refused to comply even while acknowledging the existence of the court order and of statistical material collected by the agency that is covered by the order. The agency has not offered an explanation for its refusal to provide the information. The motion filed today asks the court to compel compliance with the order.

For more than 10 years, TRAC has used the IRS’s own data to produce a regular series of reports about the performance of what is today one of the nation’s largest and most powerful agencies. The reports are posted on TRAC’s Web site, http://trac.syr.edu. For example:

    ●   TRAC’s April 2000 IRS report cited data showing that Clinton administration tax collectors were auditing poor people at a higher rate than rich people.

    ●   TRAC’s April 2004 report found that business and corporate audits were substantially down and that criminal enforcement of the tax laws was at an all-time low.

    ●    TRAC’s April 2005 report cited agency data showing that while the largest corporations controlled 90 percent of all corporate assets and 87 percent of all corporate income in FY 2004, only one in three of the corporations had been audited that year.

“It should come as no surprise that none of these findings were announced by either the IRS or the administrations in power at the time of their publication,” Long said. “Furthermore, 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 since 2004.”

TRAC’s motion in Washington state is separate from its still-pending April 14 lawsuit filed in U.S. District Court for the District of Columbia in Washington, D.C., brought under the Freedom of Information Act. In that action, TRAC said the IRS was illegally withholding selected information about its operations and claiming without substantiation that some of the requested material would compromise homeland security.

TRAC also has Freedom of Information Act (FOIA) suits pending against the Justice Department’s Executive Office for U.S. Attorneys and the Office of Personnel Management. In addition, TRAC has administrative FOIA requests seeking data and other information from the Justice Department’s Civil Division and its Environmental and Natural Resources Division, its immigration courts and several agencies within the Department of Homeland Security.

Scott Nelson, with Public Citizen in Washington, D.C., and Eric M. Stahl and Michele Earl-Hubbard, with Davis Wright Tremaine LLP in Seattle, are representing TRAC on a pro bono basis in the most recent filing.

A copy of the motion is available here.