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IG Confirms Committee Findings that the IRS Misused Structuring Authority

April 04, 2017

WASHINGTON, D.C. – House Ways and Means Committee Chairman Kevin Brady (R-TX), Tax Policy Subcommittee Chairman Peter Roskam (R-IL), and Oversight Subcommittee Chairman Vern Buchanan (R-FL) issued the following statement after the Treasury Inspector General for Tax Administration (TIGTA) released its audit report reviewing the Internal Revenue Service’s (IRS) civil asset forfeiture procedures:

“This report reaffirms our Committee’s findings that the IRS has repeatedly and knowingly abused its authority to wrongly target and seize money from hardworking Americans. We commend TIGTA for issuing this report and building off of our work to bring IRS’s abusive practices to light. These investigations are a critical part of holding the IRS accountable to the American people, as well as delivering justice to the innocent victims of the IRS. We will continue working to ensure taxpayers are advised of their rights and treated with respect.”

Over the span of more than two years, the Ways and Means Oversight Subcommittee held hearings and sent multiple bipartisan investigative inquiries to the Internal Revenue Service (IRS) about the agency’s actions of inappropriately seizing funds from taxpayers. At the second subcommittee hearing, when questioned on this program, Commissioner Koskinen promised members of the Committee that the IRS was intent on protecting taxpayer rights. The report released today by TIGTA, which specifically cites the Subcommittee’s work, confirmed our finding that the IRS treated some Americans unfairly by not abiding by the taxpayer bill of rights, not providing taxpayers with necessary information, and unethically leveraging a civil case by threatening a criminal prosecution.

Key findings from the TIGTA report include the following:

  • IRS violated internal CI requirements when conducting interviews with property owners – withholding important information.
  • IRS failed to notify property owners of their rights, both under the Taxpayer Bill of Rights and the Constitution, before or during these interviews.
  • Most seizures for structuring violations involved legal source funds with minimal ties to tax crimes from businesses, despite IRS internal policy indicating Criminal Investigation (CI) would prioritize disrupting criminal enterprises.
  • The Government appeared to have improperly bargained non-prosecution to resolve civil cases, with settlement practices varying widely from jurisdiction to jurisdiction.

TIGTA made nine recommendations and the IRS agreed with only five of them.

CLICK HERE to learn more about the Subcommittee’s first hearing.

CLICK HERE to learn more about the Subcommittee’s second hearing.