In any big organization, there are going to be mistakes, over-reaching, even some bad apples. As the media still debates how bad Lois Lerner was in the IRS targeting–while she received $129,000 in bonuses–there are other examples of bad IRS conduct. Alleged conduct anyway. For example, one IRS Agent in Seattle is facing criminal charges over an alleged scheme to extort cash from a medical marijuana dispensary for audit favors.
The Seattle Times reported that an IRS Agent named Paul Hurley, 42, attempted to squeeze tens of thousands of dollars out of a businessman for help with a delinquent tax bill. The IRS takes cases of misconduct seriously, for obvious reasons. Meanwhile, an IRS Agent in Tennessee has been charged with sexually assaulting a woman while performing an audit. Agent Samuel Garza was charged with sexual battery.
No matter how you spin it, these are further embarrassments for an agency that is still not over allegations of targeting and more. Even so, these alleged crimes may not be as colorful as the sex for lower taxes story spun by Vincent Burroughs. Vincent Burroughs claimed that his IRS auditor, Ms. Dora Abrahamson, flirted with him by phone and text, then sent him a selfie in her underwear.
In Burroughs v. Abrahamson, he sued the IRS and the IRS Agent claiming she threatened penalties if he didn’t come across. Although Ms. Abrahamson denied the allegations, Mr. Burroughs admitted that he gave in to her demands. But that was only when she came to his home “provocatively attired.” It was put up or shut up, the suit claimed. Given her position of power, dollars were at stake, and stiff penalties too.
The tit-for-tat lawsuit claimed the IRS Agent would slap him with a 40% penalty if he stayed virtuous. The IRS Agent’s conduct caused him distress and violated his constitutional right to privacy, the suit claimed. And it ruined his longtime relationship with his girlfriend.
The trial court threw out the lawsuit, concluding that whatever happened, it occurred after hours at Mr. Burroughs’ home. That meant there was no liability. The IRS Agent wasn’t performing any official duties, said the court. Mr. Burroughs appealed. After he had sex with IRS Agent Abrahamson, she withdrew from handling his case due. Another IRS Agent was assigned, and the audit got worse. Mr. Burroughs ended up owing the IRS $69,000. The unsuccessful suit alleged that the government is liable for damages because IRS officials provided inadequate supervision.
Fortunately, getting out of IRS penalties is rarely so involved. Still, it is hard to offer an excuse the IRS has never heard. They hear some doozies. Perhaps you didn’t know, your accountant told you it was legit, it got lost in the mail, you transposed your Social Security number, you were ill, your accountant died, your employee stole the money, or even that your dog ate it. Other times, nothing seems to work. In Oppliger v. United States, the 8th Circuit Court of Appeals ruled for the IRS, upholding a $2 million penalty despite the fact that the taxpayer had two pretty convincing excuses. First, his accountant embezzled the money. Then, the embezzling accountant died. Sometimes, you just can’t catch a break.
For alerts to future tax articles, email me at Wood@WoodLLP.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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