IRS Concedes Many Seizures Were Improper
The Internal Revenue Service admitted on Friday that it improperly seized property from taxpayers in more than one in four cases studied, including an attempt to force a dying man, his wife and two school-age children from their home.
Two internal audits, the last of four conducted in response to sensational allegations leveled against the agency in Senate hearings last year, were labeled “a stunning confession of the sins of the IRS” by Senate Finance Committee Chairman William V. Roth Jr. (R-Del.).
The studies were released a day after the Senate voted, 96-2, to send President Clinton an election-year bill aimed at remolding the agency. His advisors say he is eager to sign it.
Neither Treasury Secretary Robert E. Rubin nor IRS Commissioner Charles Rossotti offered comment. But both men have said they are committed to ridding the agency of abuses.
The studies looked at seizure practices in 11 of the IRS’ 33 districts and at the use of enforcement statistics in evaluating IRS examiners.
The agency reviewed 467 of about 10,000 property seizures nationwide in fiscal 1997. It found seizure to be warranted in 337 of the cases. But in 130 cases, IRS agents “did not use sound judgment . . . or conducted seizures containing legal defects,” it said.
Even within many of the 337 cases where seizure was deemed justified, the IRS failed to follow procedural guidelines, such as establishing minimum bids in auctions of seized property.
Typical violations among the 130 cases of improper seizure included taking property without adequately pursuing alternatives, disregarding required waiting periods and failing to make reasonable attempts to contact taxpayers before taking action.
IRS agents also sometimes seized property of little value, raising the question of whether the seizure was punitive rather than practical. And at other times agents “demonstrated a lack of adequate concern for the taxpayer’s financial or medical status,” the agency said.
One such case involved a man suffering from extreme obesity, ulcers and blood clots. The first revenue officer working on the family’s case encouraged them to refinance their mortgage but recommended against the agency’s going after the family home because of the husband’s poor health and the presence of children.
However, a second revenue officer made plans to seize the home after noting that the children had reached the age of 16 and that the IRS file contained no verification of the man’s health problems.
After an appeal, the IRS agreed on March 18, 1997, to let the couple sell the home by July 1. The man died July 22, and the revenue officer then agreed with a higher-level recommendation to release the home.
“Not in Govt’s best interest to pursue at this time,” the revenue officer wrote. “Would be bad publicity.
