The following is an article that appeared in the Washington Post "A" Section, on Feb. 11 (I believe).
IRS's Record-Keeping Found Lacking
Thousands of Historical Documents Lost or Destroyed, Lawsuit Asserts
By Toni Locy - Washington Post Staff Writer
Any taxpayer who has ever been audited by the IRS undoubtedly learned the hard way how important it is to hold on to records, especially really old ones. If not, the Internal Revenue Service certainly hammered home the message.
But the IRS allegedly isn't practicing what it preaches. The nation's tax collector is being accused of tossing out, shredding or failing to keep safe thousands of couments that could have historical significance.
A tax research group and three historical associations filed suit last Friday in U.S. District Court, alleging that the IRS has huge gaps in documenting its history i the 1890s, the 1910s and the 1940s. Historians believe the records could provide insight into the history of taxation in this country and the transformation of the income tax from a "class tax" to a "mass tax" in the aftermath of the Depression and World War II.
Instead, the lawsuit said, the IRS isn't taking care of the records. Documents are "scattered willy nilly" throughout IRS headquarters, with no inventory to provide a hint of their significance, while others are left to rot inleaky basements where insects get them if the water doesn't, the suit said.
As a result , "much valuable documentation of IRS activity and of the history of the taxation of the United States has been lost or its loss is threatened and imminent," attorney William A. Dobrovir said in the lawsuit filed in behalf of Tax Analysts of Arlington and the American Historical Association, the Organization of American Historians and the Society of American Archivists.
The lawsuit alleges that the IRS and the National Archives and Records Administration have failed to comply with the Federal Records Act that requires all Federal agencies to turn over all historically significant documents.
Wilson Fadely, an IRS spokesman, declined comment, saying the agency does not discuss pending litigation.
The battle over the records has been raging for years. Congress urged the IRS and NARA to stop bickering and cooperate as long ago as 1984, but it hasn't happened yet, the lawsuit said. The lawsuit also accuses NARA of not doing its job, and, more important, failing to use its trump card: calling in the Attorney General to force the IRS to comply with the law.
The lawsuit also makes much of the resignation in 1995 of the IRS's first and last historian, who quit in protest after running into stiff opposition to her efforts to save the records for history's sake. The IRS eliminated the position after she quit.
If the case ever goes to trial, the efforts of that historian, Shelley Davis, are sure to be a central part of the plaintiff's case. She was hired in 1988 and said she was driven out of the agency after blowing the whistle in a scathing report on the IRS's woeful records preservation. She was even investigated by the agency, according to published reports.
Dobrovir said the suit is not about getting individual taxpayer returns -- which is explicitly prohibited by law. He said its about such historically significant records as the tax returns of presidents, the policies and activities of IRS commissioners, and the memorandums and e-mails that may provide a hint at the role that politics played in the agency's pulic and private activities.
For example, historians think IRS records may shed light on President Franklin D. Roosevelt's campaign to close tax loopholes in the spring of 1937. They also may provide more insight into the agency's Special Services Staff, or SSS, which supposedly was created to spy on 731 mostly left-wing activists and organizations during Richard M. Nixon's presidency.
There are also IRS projects launched and abandoned ong ago with code names such as "leprechaun", whose purposes remain largely unkknown. And there are the countless reorganization plans that agencies tout as the solution to all of their problems that hsitorians and journalists can often use to hold officials accountable.
But the IRS refuses to turn any of it over, the suit said. The plaintiffs said they tried last July and filed the lawsuit when the IRS brushed them off. Now they are asking U.S. Judge June L. Green to weigh in and force the IRRS to abide by the
record-keeping law, like everybody else.
And of course, there is their wonderful computer automation program:
NEWS FROM THE LIBERTARIAN PARTY
2600 Virginia Avenue, NW, Suite 100
Washington DC 20037
For release: February 14, 1997
For additional information:
George Getz, Deputy Director of Communications
(202) 333-0008 Ext. 222
$4 billion computer fiasco by the Internal Revenue Service reveals a "powerful but incompetent" agency, say Libertarians
WASHINGTON, DC -- Does IRS stand for It's Really Stupid?
That's the question being asked this week after the Internal Revenue Service admitted it spent 11 years and a whopping $4 billion installing a new computer system that doesn't work.
So the much-feared federal agency will junk the entire multibillion-dollar system -- even as its Assistant Commissioner humbly admitted to Congress that the IRS lacks the "intellectual capacity" to do the job right.
"This $4 billion computer fiasco is just the latest in a long line of IRS blunders, mistakes, and embarrassments," noted Steve Dasbach, the chairman of the Libertarian Party -- America's third-largest political party and fiercest critic of the "powerful and arrogant" IRS.
"Whether it's incorrectly answering taxpayers' questions or sending out bizarrely faulty penalty notices, the IRS has proven itself to be the worst kind of bureaucracy -- incredibly powerful but wildly incompetent," he said.
For example, Dasbach noted:
Nearly half of the 30 million penalty notices the IRS mails out each year are erroneous, according to a study by Money magazine. In one case, because of a computer glitch, a barber in Santa Rosa, California, was notified in 1993 that he owed the agency $4 billion in back taxes -- as were 3,000 other people nationwide.
* IRS employees who answer the agency's toll-free hotline dispense incorrect advice at least 30% of the time, according to an internal audit.
"Of course, taxpayers who innocently follow the erroneous advice given by bungling IRS experts could end up in jail -- or, at the very least, getting one of those incorrect penalty notices," said Dasbach.
* According to the General Accounting Office, the IRS has no idea how it spent 64% of its budget in 1992 (an astonishing $4.3 billion) -- and none of the agency's financial statements from 1992 to 1996 can be verified by GAO auditors.
"An agency that requires American taxpayers to save every scrap of financial paper apparently has shadier accounting practices than the Mafia," said Dasbach.
* The IRS's managers pressure employees to seize taxpayers' property so they can win "merit pay" bonuses, according to testimony before the Senate Commerce Committee. Agents in a San Francisco IRS office even posted a notice on the bulletin board that said: "Seizure fever. Catch it."
"This parade of bureaucratic pratfalls and failures would be funny if it wasn't so serious," said Dasbach. "A minor mistake on the part of an incompetent IRS agent can mean years of legal trouble, seized property, thousands of dollars in court costs, psychological terror, and even jail time for innocent Americans.
"That's why, in an odd way, the news of this $4 billion dead-on-arrival IRS computer system is good news -- it means there's one less powerful, high-tech weapon for the IRS to use to spy on, monitor, and harass innocent Americans. It's almost worth $4 billion to keep the IRS in the technological stone age, and keep them off the backs of taxpayers."
But what about the $4 billion of taxpayers' money that the IRS wasted?
"Handle it like it would be handled in the private sector," suggested Dasbach. "Find out who was responsible for this fiasco, and take them to civil court to recover damages. Whether it was the IRS Commissioner, IRS managers, or the members of Congress who oversaw this project, they should be forced to personally reimburse American taxpayers for the $4 billion they've wasted. Maybe that would teach them a lesson."
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