IRS targeted groups critical of government, documents from agency probe show [WaPo]
At various points over the past two years, Internal Revenue Service officials singled out for scrutiny not only groups with “tea party” or “patriot” in their names but also nonprofit groups that criticized the government and sought to educate Americans about the U.S. Constitution, according to documents in an audit conducted by the agency’s inspector general. The documents, obtained by The Washington Post from a congressional aide with knowledge of the findings, show that the IRS field office in charge of evaluating applications for tax-exempt status decided to focus on groups making statements that “criticize how the country is being run” and those that were involved in educating Americans “on the Constitution and Bill of Rights.” The staffers in the Cincinnati field office were making high-level decisions on how to evaluate the groups because a decade ago the IRS assigned all applications to that unit. The IRS also eliminated an automatic after-the-fact review process Washington used to conduct such determinations. Marcus Owens, who oversaw tax-exempt groups at the IRS between 1990 and 1999, said that delegation “carries with it a risk” because the Cincinnati office “isn’t as plugged into what’s [politically] sensitive as Washington.”
One of the small lingering questions from the insider-trading scandal involving a former KPMG LLP partner has finally been addressed: What would Deckers Outdoor Corp. do? […] The answer for Deckers, disclosed this week: Keep KPMG as its auditor, but cancel its vote for its shareholders to approve KPMG, apparently out of concern that the insider-trading affair complicated efforts to ensure that shareholders had enough information and notice about what had happened before they cast their votes.
Maybe a little heavy for a Monday morning, but Paul Gillis has a nice payoff at the end: "Auditors have a conflict of interest here. Setting up these treaty structures has been a profitable business for the firms. How can they now tell their clients that it is more likely than not that the structure does not actually work, and that they need to accrue withholding taxes at a higher rate? The audit partner may be concerned with this issue, but how can he demand the company accrue withholding taxes at the non-treaty rate when he has his tax partner who he uses as an expert to evaluate the issue advocating the client’s position? Audit committees should not permit audit firms to also provide tax services."
Instagram 'food porn' photo leads IRS to identity thieves [OSS]
IRS agents on the trail of a man who claimed he had 700,000 stolen identities to sell said they only had a few clues about who he was early in the investigation. A witness working undercover for the IRS told agents the man went by the name "Troy," he was dating [Tenise] Thomason and said he was from Harlem during a Jan. 5 meeting at YOLO restaurant on Las Olas Boulevard. The break came Jan. 7 after the three met up again – at the swanky Morton's steakhouse on the corner of Federal Highway and Broward Boulevard – so the couple could turn over a flash drive containing 50,000 identities they thought would be used to file fraudulent income tax returns. When IRS agents examined the drive – which contained only 50 identities – they found hidden data linking the drive to "Troy Maye." Louis Babino, a special agent with the IRS criminal investigation unit, searched online and found a profile for "TROYMAYE" on Instagram, a social media website for sharing photos. Babino wrote that he found "a photo of a steak and macaroni and cheese meal containing the caption "Morton's" that coincided with the Jan. 7 meeting between the witness and the couple.