IRS leak of billionaires’ tax data went unpunished for a year
In June 2021, ProPublica released confidential IRS tax information on wealthy Americans provided by an as yet unidentified source. While we don’t yet know who dumped the data, we do know this is far from the first time the tax agency, which forces people to reveal sensitive details about their finances, has turned out to be a unreliable repository of this information, and that is well said. Too often, federal tax collectors abuse official records for fun, profit and political advantage.
“Today, ProPublica is launching the first in a series of articles based on the private tax data of some of our country’s wealthiest citizens,” said ProPublica’s Stephen Engelberg and Richard Tofel. wrote on June 8, 2021. “Many will ask questions about the ethics of publishing such private data. We do so – quite selectively and cautiously – because we believe it serves the public interest in fundamental ways, allowing readers to see patterns that were hitherto hidden.”
Included in the treasure trove of tax data were details about the tax bills of people such as Jeff Bezos and Warren Buffett. Taken from IRS records, the information was provided through “secure systems that allow whistleblowers to transmit information to us without revealing their identity.” The data revealed that many wealthy Americans are successfully minimizing their tax burden, which could have been the source’s goal, although no one would guess. People have many motivations for leaking information, and ProPublica admits it doesn’t know the source’s intentions.
In fact, the IRS regularly leaks like a sieve for all sorts of reasons.
“[T]The IRS conducted 1,694 investigations of willful and unauthorized access to tax data by employees, and 27% were found to be violations,” the US Government Accountability Office said. reported last month.
“[Michael Kasper] was almost certainly one of more than 330,000 Americans who fell victim to a daring Internal Revenue Service (IRS) hack that came to light earlier this year.” Quartz Noted in 2015 from a man who discovered that someone else was collecting his tax refund.
“The Tea Party, anti-abortion groups and other conservative groups told Congress on Tuesday that the Internal Revenue Service suspended their requests for tax exemptions, harassed them with questions and leaked their donor lists to political opponents,” he added. USA today reported in 2013.
Outsiders enter inadequate security for profit, while IRS employees often access and disclose financial information to satisfy personal curiosity, make money, and advance political causes. Sometimes these political causes are their own, and other times they are part of the agenda of whoever holds power in the federal government.
“The history of the IRS is littered with repeated examples of agents acting out of self-interest or pursuing their own ideological agenda, as well as instances of presidents, White House staff, and Cabinet officials lobbying the tax agency to take political action”, The New York Times underline in 1989.
This abuse began at the beginning of the accumulation of the powers of the tax administration.
“My Father”, Elliott Roosevelt, son of former President Franklin Delano Roosevelt, once commented“perhaps originating the concept of using the IRS as a weapon of political retaliation”.
FDR’s administration may have been the first to militarize the tax collection agency, but it was not the last. John F. Kennedy established a “Ideological Organizations Audit Projectwithin the IRS to target its conservative political critics. Richard Nixon infamously used the tax agency as a political hitman against prominent Democrats. The continued misuse of tax information is clear from the Time history on the issue under the Bush Sr. administration as well as the Obama-era scandal mistreatment of Tea Party groups and, more recently, the ProPublica leak.
So the use of tax data by ProPublica and its source to make a political point isn’t exactly groundbreaking. Some of the agents and politicians who have armed the IRS in the past intended to make the world a better place through their lights, or at least only hurt the people and organizations they were convinced were bad. And leaks from government agencies often result in beneficial ends. Where would we be without Daniel Ellsberg’s copies of the Pentagon Papers, Mark Felt’s role as “Deep Throat” in the Watergate scandal, or Edward Snowden’s revelations about government surveillance?
But the IRS leaks are not war plans, abuses of power, or political ploys; it is sensitive and private financial information that we are obligated to hand over to government officials. We have no choice but to fill out our tax forms even though we know that federal employees who receive our information have a habit of misusing this data for their own purposes and to our detriment.
And political goals are objectively not good justifications for invading people’s financial privacy. Andrew Moylan and Andrew Wilford of the National Taxpayers Union Foundation cautioned Raison that ProPublica’s use of the data was “misleading and sure to lead to misguided policy.” On the most charitable interpretation, this indicates a biased misuse of sensitive private information.
Not that the tax authorities necessarily care. History suggests that the IRS leaks have minimal consequences for the agency.
“The Inspector General of the Treasury of the Tax Administration (TIGTA) had previously issued an audit report in September 2006 on the IRS Privacy Office and found that the IRS was not complying with legislative privacy requirements,” TIGTA reported in 2013. “Despite its commitment to privacy and the improvements made by our previous review, the IRS continues to face challenges in meeting legislative privacy requirements.”
And here we are in 2022 with, apparently, still plenty of room for improvement after decades of abuse of privacy by tax collectors and slap on the wrist by their watchdogs. Almost a year after ProPublica’s initial story, and after Treasury Secretary Janet Yellen promised “to get to the bottom of this criminal activity“, the federal government still claims to have no idea who leaked the data. “There have been no arrests or official clues as to how the wall of secrecy surrounding the tax records was breached; it is unclear whether the IRS found or closed any security vulnerabilities,” reports the the wall street journal.
Many of us complain about the bite the government is taking on our paychecks. But what is even more pernicious is that the information tax collectors force us to give up is likely to be used against us by politicians, government officials and activists who consider the details of our finances as tools to achieve their goals. The IRS is not only a powerful federal agency, it is a weapon against the public.