IRS Investigating Its Own Lawyer for Blowing Whistle on Tax Credit Scheme

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Between this and the Tea Party targeting scandal, the IRS has badly damaged its own reputation in recent years. Why are the people who blow the whistle on corruption always the ones who get punished?

The TaxProfBlog reports:

WaPo: Is Chief Counsel Retaliating Against IRS Attorney Who Blew Whistle On Multi-Billion Dollar Black Liquor Tax Credit Giveaway?

Washington Post, Is the IRS Getting Back At An In-House Critic?:

Three hundred and twenty days ago, the Internal Revenue Service launched an investigation of one of its own lawyers over things he allegedly told media outlets, including The Washington Post, about a multibillion-dollar corporate tax credit scheme involving a source of energy informally known as black liquor.

The Treasury Inspector General for Tax Administration, which examines criminal allegations, questioned William Henck on Sept. 11, 2015, wrote a report and gave it to the IRS chief counsel to decide whether any wrongdoing took place.

Then nothing.

Henck is still waiting to find out what the inspector general recommended — and what, if anything, the IRS is going to do about it. He was told by the inspector general’s office that its report, completed at least six months ago, can’t be shared with him. The matter now rests in the hands of the IRS chief counsel. The IRS has declined to comment on the matter, and the Treasury, which oversees the IRS, said it is up to the agency and would not comment.

The circular series of no comments appears to leave Henck in a Kafkaesque limbo — not knowing the status of the investigation, which he says weighs heavily on him. The source of the allegations remains secret, the report remains secret, and current disciplinary proceedings, if any are underway, remain secret.

Tom Devine, legal director of the Government Accountability Project, said actions like this have a “chilling effect” on whistleblowers like Henck, who had discussed a highly questionable tax policy issue with Senate Finance Committee staff and the media.

Henck’s situation appears to be unusual. In its 18th annual “Report on Professionalism,” the office of the chief counsel for the IRS said that it received 67 referrals from the inspector general during 2015. In 66 of those, the allegations were either unsubstantiated or dealt with, usually with counseling.

The number of cases still pending? One. Henck.

“This ongoing harassment seems calculated to intimidate Mr. Henck and prevent him from making further disclosures to Congress,” said Jason Zukerman, Henck’s attorney. “This is no way to treat an employee who has loyally served the agency for 29 years and is dedicated to the agency’s mission. Indeed, his dedication to the agency’s mission prompted him to blow the whistle.” …

If Trump wins the presidency, hopefully he will clean house at the damaged government agency.

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