The IRS Agent with a Weakness for Shrimp

photo via

TIGTA (Treasury Inspector General for Tax Administration) often includes in its semiannual report to Congress highlights of the past 6 months and high profile cases that the agency has resolved.  The most recent semiannual report tells of the bribery of an IRS Revenue Agent by the owner of a seafood company in Louisiana.

An unnamed IRS agent paid a visit to Vihn Q. Tran, the owner of St. Vincent Seafood Co. in Louisiana, back in August 2007 with the intent to schedule an in-person audit of his books.  At that first encounter Tran offered to take the agent to lunch and also dropped a hint that he was hoping for some special treatment when he told the agent, “I’ll take good care of you.”  The IRS agent declined these initial offers, but then in subsequent meetings accepted 75 pounds of jumbo shrimp and $6,000 cash.  In April 2011 Tran confessed to the crime.  In January 2012 he pled guilty to bribery of a public official, and he was sentenced to three-years’ probation this past March.

TIGTA’s report does not specify, but it appears to me that the IRS agent was culpable at least for violating the guidelines set forth in the Internal Revenue Manual (IRM).  According to IRM section, IRS employees are required to do the following when presented with a bribe:

  • Avoid any statement or implication that you will or will not accept the bribe.
  • Attempt to hold the matter in abeyance.
  • Report the matter immediately to the Inspector General Special Agent.
  • Avoid any unnecessary discussions of the matter with anyone.

Unless some key facts are being left out of this report, it does not appear that the agent complied with these rules.  By accepting the cash and the shrimp, the agent violated the first two rules, and although the agent must have reported the bribes at some point, it does not appear that he did so immediately.

As for Mr. Tran, I would guess that he has since gone out of business.  It looks like his tax problems were just one of a variety of issues he had been dealing with as a business owner.  The US Food and Drug Administration (FDA) sent him a letter in 2002 pointing out some “serious deviations” from federal seafood regulations, one of which had to do with, not surprisingly, record-keeping.

Taxpayer Advocate Wants More Money Spent on Collections

Shouldn’t the Taxpayer Advocate be focused on providing high quality tax relief within the bounds of the law?

The Taxpayer Advocate Service (TAS) describes themselves as an “independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. ”

Today the TAS submitted its biannual report to Congress which evaluates IRS’s progress in 2010 and spells out its objectives for 2012. Here are some key points:

  • IRS resources are being strained due to new programs and less funding. New programs have resulted in higher call/inquiry volumes and there is less money available to pay for employees to field these calls and question.
  • TAS praises the IRS for making improvements to lien filing procedures, but does not believe it is doing enough. TAS suggests that the IRS cease filing liens based on amount owed, and instead look at the individual ability to pay. If the taxpayer is suffering from an economic hardship, no lien should be filed.
  • Dwindling resources resulted in more “bright-line” tests used by IRS employees; in other words, less discretion and less consideration of taxpayers’ individual circumstances.

The TAS also cited an interesting statistic: In 2010 the government spent $12.1 billion to run the Collections Department of the IRS, and that department collected $2.35 trillion in revenue (that’s $194 for each dollar spent). The TAS cited this statistic to show just how successful the IRS is in collecting taxes and to make their case for increased funding for these collection efforts. In fact, the TAS wants the IRS to be exempt from budget caps or reductions.

In my opinion, the TAS’s push for more funding seems inconsistent with their stated goal of looking out for the best interests of the taxpayer. What kind of advocate would be so interested in beefing up Collections?