Related topics

IRS Can’t Find Audit Files

November 17, 1999

WASHINGTON (AP) _ The IRS admits a secretary taped over, with music, a recording sought as evidence by a group searching for examples of politically motivated audits of tax-exempt groups.

The Landmark Legal Foundation, a conservative law firm that sued the tax agency, contends it has information from ``a senior-grade federal government employee″ that an Internal Revenue Service official spoke of concealment and document shredding at a 1997 meeting recorded by the secretary.

An IRS document in Landmark’s Freedom of Information Act lawsuit also revealed that the tax agency, which can punish taxpayers for poor record-keeping, can’t find some of its own files related to audits of tax-exempt organizations.

``My office could not locate 114 of the 1,586 potentially responsive case files. These are files missing ... during the time period 1992-1994,″ Harold N. Toppall, an IRS manager in the exempt organizations division, stated in the court case.

The lawsuit is searching for evidence that conservative, tax-exempt groups were victims of politically motivated audits after members of Congress and the White House made inquiries to the IRS. Officials at the tax agency have responded that regardless of the motivation of anyone requesting an audit, politics never enters into its decision-making.

The Associated Press reported Monday that officials in the Democratic White House and members of both parties in Congress have prompted hundreds of audits of political opponents in the 1990s. The audit requests ranged from the forwarding of constituent letters and newspaper articles alleging wrongdoing to personal demands for audits from members of Congress.

Landmark identified the IRS official who may have discussed shredding and concealment as Frances T. Hallihan, who spoke at a conference of IRS managers and others in San Francisco in October 1997.

``Ms. Hallihan reportedly stated that in the event a congressman or staffer called, the IRS intake person was to ask the member or staff person if the information came from a newspaper article, television report or constituent so that the IRS intake employee could list the `tip source’ as something other than the congressman or staff member,″ Landmark contended in a court filing.

Citing its government source, Landmark said, ``Ms. Hallihan is also reported to have said that she was aware that intake notes relating to tips from congressmen or staffers had been or were being shredded by IRS employees.″

IRS officials declined to address the allegations or allow Ms. Hallihan to be interviewed.

``It is inappropriate for the IRS to comment on this particular case while the litigation is pending. We are confident the issues being raised will all be taken up and addressed during the court’s consideration of the case,″ agency spokesman Steve Pyrek said.

U.S. District Judge Henry Kennedy Jr. has granted Landmark the right to question Ms. Hallihan, despite IRS efforts to obtain a protective order to stop such a deposition. The deposition has been delayed while Landmark tries to obtain the disputed tape recording.

In the lawsuit, the IRS previously indicated there was no recording of the 1997 meeting. But last month, Justice Department trial attorney Joseph Sergi informed Landmark that IRS secretary Jeannette Wallace taped the meeting for later transcription of minutes, using her personal recorder.

``When the minutes were completed, and the tapes were no longer necessary, Ms. Wallace used the tapes to record music at her home,″ Sergi said in a letter to Landmark.

The tapes then were used to record another IRS meeting that took place on June 4, 1998, the government contended, adding that the original reuse of the tape occurred before Landmark’s lawsuit was filed.

Mark Levin, Landmark’s president, said the organization has received a copy of the minutes of the 1997 meeting, which make no reference to shredding.

Landmark wants to send the tapes to an expert to determine if recordings of the 1997 meeting can be recaptured.

Update hourly