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Judicial Watch • IRS Inspector General cites taxpayer confidentiality law to withhold records of employee fraud

IRS Inspector General cites taxpayer confidentiality law to withhold records of employee fraud

IRS Inspector General cites taxpayer confidentiality law to withhold records of employee fraud

JUNE 19, 2012

In April 2012, Judicial Watch learned that a former IRS employee had sued the agency for a quarter million dollars and expungement of his record after he was fired in October 2010.  After Anthony Yemoh Smith lost in court, Judicial Watch filed a Freedom of Information Act request seeking all records pertaining to accusations that Smith falsified travel vouchers he submitted to his supervisor for reimbursement as well as any other files uncovering similar instances of fraud by IRS employees.  The Treasury Inspector General for Tax Administration (TIGTA) on May 14, 2012 denied Judicial Watch’s request in full, stating that:

  • TIGTA did not possess any employment records for Anthony Yemoh Smith;
  • The agency could neither confirm nor deny the existence of an investigation into Smith’s misconduct;
  • A total of 1,720 pages comprising 15 Reports of Investigation (ROI) respecting the falsification of travel vouchers by other IRS employees were located for the period of August 1, 2010 through the date of the request.  However no part of them could be released because the privacy interests of the employees falsifying travel vouchers outweighed any public interest in the thefts they conducted in the course of their employment with the federal government.

On May 14, 2012, Judicial Watch administratively appealed TIGTA’s denial since the pertinent facts had all been aired in open court.  TIGTA affirmed its blanket denial on June 15, amending only its previous failure to acknowledge the existence of an ROI into Smith’s misconduct.  Additionally, in upholding its earlier decision to withhold all records in the 15 other fraud investigations identified, the agency – charged in part with supervising the IRS – said it had no way of distinguishing the guilty from the innocent because it was a separate entity from the IRS.  It also cited a statute designed to protect information submitted by taxpayers in filing returns each spring.

Nevertheless, according to court documents, Smith’s on-the-job misconduct was discovered in August 2010.  In the course of the investigation, TIGTA agent Kevin Davies also learned that Smith had been arrested in 2007 for obstructing a police officer.  Davies informed IRS Territory Manager Cindy Halpert and Group Manager Richard Ledger as well as Assistant United States Attorney Mark Crooks.  AUSA Crooks declined to prosecute Smith.  Ms. Halpert apparently fired him.  Because of TIGTA’s secrecy, it is not clear how much money the IRS has lost to travel voucher fraud among employees nor if any stolen funds have been recovered

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