This is sadly typical of the Bush administration. (via my friend Mark Gisleson)
Top officials at the Internal Revenue Service are pushing agents to prematurely close audits of big companies with agreements to have them pay only a fraction of the additional taxes that could be collected, according to dozens of I.R.S. employees who say that the policy is costing the government billions of dollars a year.
“It’s catch and release,” said Douglas R. Johnson, an I.R.S. auditor in Colorado for three decades who said he grew so frustrated at how large corporations were allowed to pay far less than what he thought they owed that he transferred to the agency’s small-business division.
With one exception, other working agents would talk about the issue only on condition they not be identified because they feared being fired. They said a policy intended to avoid delays in auditing corporations was being pushed so rigidly that it prevented them from pursuing numerous examples of questionable corporate tax deductions.
The more you read about it, the worse it is. IRS auditors dealing with large, delinquent companies, for example, were instructed to limit questioning to questionable areas that the IRS and the companies had agreed to in advance. As the NYT noted, “When other questionable deductions emerged in the course of the audit, they said, additional taxes were ignored.”
This isn’t a secret; it’s the new IRS policy in dealing with corporations. The idea is, the IRS is better off auditing lots of companies lightly, instead of a few companies thoroughly. The NYT asked 50 professional auditors if the new policy made sense — 49 said it didn’t, and the other agreed that the new policy was letting large companies pay far less than they owed.
Debbie Nolan, the IRS executive in charge of auditing large and medium-size businesses, said agents who disapprove of the new policy can always report their concerns to higher-level supervisors. Agents don’t see it that way.
The auditor was asked why she did not file an official memo indicating that she disagreed and that she believed it was premature or improper to close the audit.
“Why would I do that?” the auditor replied. “So my manager will give me a bad performance review?” Others gave similar explanations.
The Bush administration’s reputation for punishing whistleblowers, especially those who are right when political appointees are wrong, has not gone by unnoticed.
In the big picture, it’s quite a racket. The Bush administration is making it easy for large corporations — many of which, undoubtledly, are generous in their support of the president and the GOP — to intentionally ignore their tax obligations, knowing that new administration rules will make it harder for the IRS to collect.
Shameless.