March 8, 2017, Fairfax, Va.—Americans for Limited Government President Rick Manning today issued the following statement blasting an unnamed federal agency outlined in a March 7 New York Times report for illegally outsourcing parts of a tax investigation into Caterpillar to Dr. Leslie Robinson, accounting professor at the Tuck School of Business at Dartmouth College:
“It is illegal for the federal government to outsource tax investigations to non-government personnel due to the highly confidential nature of tax records. This leaked report meant to embarrass a company that President Trump recently praised was illegally leaked for political purposes, but what it reveals was that a federal agency, unnamed at the moment, apparently shared tax information with a Dartmouth College professor to go after Caterpillar. This continuation of the left’s use of the government as a political weapon almost two months in to the Trump presidency is beyond troubling.
“Notwithstanding the law, in 2015, the IRS issued a regulation that dramatically expanded the persons who could review tax information in the course of a tax investigation. This episode of a contractor’s report being leaked emphasizes why not only this was a bad idea, but why it still violated the law. This regulation should be defunded by Congress and enforcement suspended.
“If there was an effective ‘Taxpayer Advocate’ these abuses might be identified and stamped out, but unfortunately, the culture of corruption at the IRS and other agencies, with their surrogate outside consultants remains intact. It is time for the Trump Administration to enforce the law against the use of outside contractors to conduct tax investigations. What’s more, Congress needs to seriously question what the so-called Taxpayer Advocate has been doing besides lobbying for increased IRS appropriations?”
“I was provided with all documents available to the case agents assigned to the investigation.” Dr. Leslie Robinson, accounting professor at the Tuck School of Business at Dartmouth College, quoted from report from tax investigation into Caterpillar, March 7, 2017 at https://www.nytimes.com/2017/03/07/business/caterpillar-tax-fraud.html
Letter from Sen. Orrin Hatch (R-Utah) to IRS Commissioner John Koskinen, May 13, 2015 at https://www.finance.senate.gov/chairmans-news/hatch-questions-irss-outsourcing-of-taxpayer-examination
The IRC authorizes the Secretary of the Treasury to make inquiries regarding tax liability, and permits the Secretary to delegate this authority to “officers or employees of the Treasury Department….” 26 U.S.C. §§ 6201 [ https://www.law.cornell.edu/uscode/text/26/6201 ]
This authority includes both the examination of “books, papers, records, or other data[,]” and the taking of testimony under oath. 26 U.S.C. § 7602(a). [ https://www.law.cornell.edu/uscode/text/26/7602 ]
While the Secretary has broad powers to delegate authorities, any delegation is limited to an “officer, employee, or agency of the Treasury Department” unless Congress expressly grants broader authority. 26 U.S.C. § 7701(a)(11)(B), (12)(A). [ https://www.law.cornell.edu/uscode/text/26/7701 ]
In addition to limitations on who can carry out these functions, Congress also created safeguards around the use of confidential taxpayer information by prohibiting officers and employees of the United States from disclosing taxpayer information except in limited circumstances. 26 U.S.C. § 6103. [ https://www.law.cornell.edu/uscode/text/26/6103 ] By enacting these provisions, Congress made clear that certain revenue functions may be carried out only by specified officers of the Treasury Department and that taxpayer data can only be disclosed in limited circumstances.
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