Where did the IRS ever get the idea it has the authority to outsource audits?

Where did the IRS ever get the idea it has the authority to outsource audits?
(Image: Screen grab of CSPAN video via YouTube)

The House continues to push for the impeachment of the corrupt, arrogant, and inept head of the Internal Revenue Service, John Koskinen. From the targeting of Tea Party and right-leaning organizations to his refusal to work with Congress in its investigation over the IRS’s abuse of these groups, Koskinen has provided Congress with plenty of ammunition for its case.

Now a new complaint has arisen that may provide the kill shot. The complaint relates to a clear violation of the law in the agency’s nine-year audit of Microsoft, which was outsourced to a well-connected liberal law firm.

Congress has never given the IRS the authority to outsource audits. However unpleasant in practice, the audit was designed to be a non-confrontational process. The IRS is charged with finding a common ground with the taxpayers. Should that common ground be unattainable, the court system allows the matter to be litigated. In the case against Microsoft, the IRS abandoned this principle.

First, the law firms selected to conduct the audit include the firm of David Boies, an attorney with a long history of doing battle against Microsoft. During the Bill Clinton presidency, Boies assisted the Justice Department in its anti-trust battle against the company over its now-defunct browser. So much for finding a common ground.

More troubling is the fact that Boies is a long-time Democratic supporter who gave liberal group Priorities USA $1 million in 2012. He has given almost $2 million to Democratic candidates since, and his law firm has given nearly a quarter of a million dollars to the liberal elected officials and candidates.

Likewise, the firm of Quinn Emanuel Urquhart & Sullivan, LLP is a co-counsel of the IRS. In addition to the firm’s history of political giving to the Democratic Party, Reuters notes, “At the time the IRS was talking to Quinn … the law firm was involved in more than 30 active cases adverse to Microsoft.” Adding fuel to the fire is the fact that some of Quinn Emanuel’s biggest clients, such as Samsung, are major Microsoft competitors.

An effort by Microsoft to find how the IRS selected Boies and Quinn was met with the now-familiar response that the hard drives that contain the information were wiped clean accidentally.

Sen. Rob Portman (R-Ohio) has introduced legislation to affirmatively end the outsourcing of audits. The bill also ensures that taxpayers have a right to appeal before a tax court. This will help to protect the right of taxpayers so that an audit can’t be used as a back door effort to force a taxpayer into a settlement without that taxpayer being forced to waive the right to an appeal.

In addition, the bill stops the IRS from extending the statute of limitations against taxpayers willing to cooperate with the government.

This bill is a logical step toward protecting the American taxpayers from further abuse at the hands of an out-of-control IRS. It should be a top priority for the Congress.

As the House pursues the impeachment of Koskinen, the commissioner might want to take some “good faith” action to end the abuses that have lead the House to such an extreme remedy. Implementing the ideas of the Portman bill will go a long way to repairing the broken relationship between the taxpayers and the IRS.

Edward Woodson

Edward Woodson

Edward Woodson is a lawyer, now host of the nationally syndicated Edward Woodson Show, which airs daily from 3 to 6 pm EST on gcnlive.com.


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