Skip to Main Content
 

Mark Matthews Comments on Moving CI Cases to Treasury

April 23, 2018, Tax Notes

The Federal Law Enforcement Officers Association (FLEOA), a federal law enforcement trade group, is committed to persuading Congress to move the IRS Criminal Investigation division out of the tax agency and into the Treasury Department. But many tax professionals don’t like the idea of moving CI out of the IRS.

. . .

Mark E. Matthews, a former IRS deputy commissioner for services and enforcement and head of CI from 1999 to 2002, said that relocating CI would “inevitably lead to sharp reductions” in the number of criminal tax cases. Treasury would be more interested in money laundering and other illegal income schemes than the traditional cases that provide a deterrent effect on taxpayers, he predicted, resulting in reduced tax compliance and an increase in the tax gap.

“It is important that the [taxpayer] identify with those singled out for prosecution,” Matthews added. Most taxpayers don’t identify with a tax charge brought against a drug dealer or people engaged in identity theft, he said, adding, “But airline pilots spread the word when other airline pilots are prosecuted. It’s true in any industry.”

Moving CI could also lead to more political interference, Matthews said. “Just as the IRS seems to be moving beyond nearly a decade of political bashing, turning over the criminal tax function to the political Treasury side will further degrade the public’s confidence in the fair and nonpolitical administration of the tax code,” said Matthews, now with Caplin & Drysdale, Chtd. “You might as well schedule the hearings on the resulting scandals now.”

A CI realignment would require revisiting the section 6103 taxpayer information privacy protections, Matthews added, noting that those protections are among the few things partisans on both sides can agree to protect. “People are willing to share sensitive financial information with the IRS because they believe it will not be leaked,” he said.

Not Just a CI Story

. . .

“This just isn’t a CI story only,” Matthews said. Congress needs to reverse the IRS funding cuts of the last decade or so, and the agency must improve both customer service and enforcement efforts on both the civil and criminal sides, he said.

The chaos that ensued on tax day when processing systems failed should serve as a warning about IRS funding as a whole, not just for CI, Matthews cautioned. “What if people can’t get their refunds on time next year?” he said. “I wouldn’t want to be answering the phones on the Hill.”

For the full article, please visit Tax Notes’ website (subscription required).

Excerpt taken from the article “Group Still Pushing to Move CI to Treasury” by William Hoffman for Tax Notes.

________________________________________________

About Caplin & Drysdale
Having celebrated our 50th Anniversary in 2014, Caplin & Drysdale continues to be a leading provider of legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills -- combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment -- make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:
For more information, please visit us at www.caplindrysdale.com.
Washington, DC Office:
One Thomas Circle NW
Suite 1100
Washington, DC 20005
202.862.5000
New York, NY Office:
600 Lexington Avenue
21st Floor
New York, NY 10022
212.379.6000

___________________________

Disclaimer
This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.
© 2018 Caplin & Drysdale, Chartered
All Rights Reserved.

Related Professionals

Related Practice Area(s)