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KC Johnson on Report Claiming Seligmann Owes Taxes; Detroit News Says IRS Lien for $6.5 Million
Topic Started: Feb 25 2011, 08:58 AM (7,217 Views)
Bill Anderson
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I'm not done with this subject as of yet. While I don't think that Duke directly had anything to do with this latest incident, I do think that it is in Duke's interest to discredit Reade and the others because of the impending suit against Durham and Nifong.

The defense that we would hear from Durham especially, along with Nifong, would be highly embarrassing to Duke because it would give a version of things buried in the settlement with Reade, Collin, and David.

:bill:
Edited by Bill Anderson, Feb 28 2011, 12:35 PM.
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Kerri P.
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Nice job Bill.

:bd: :bd: :bd: :bd:
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kbp

Quote:
 
Bill @ Rockwell

"...This latest incident involving Reade Seligmann only heightens the suspicion that this is not an act of mistaken zeros by a bumbling IRS agent, but rather a concerted effort to discredit someone that North Carolina Democrats see as a political enemy."

"...Yes, maybe we will find that this all was an "innocent mistake," and that an agent just got some numbers wrong."


Since I would never anticipate any corrections for inaccuracies of press articles to be made in a manner that readers will notice them, the outcome will be of little value in the minds of most readers.

If that outcome make an effort to blame a low level IRS agent, I'd hope the readers would wonder how in the world the IRS could let some mistake be made for such a huge chunk of change.

Anyone with a sound mind would anticipate that the agent would feel like he/she hit the winning SEVEN DIGIT CAREER LOTTERY, they'd be promoted and set for life there. Next comes the NUMEROUS career advances for those in management of that agent, so we'd have multiple people checking those numbers on the tax return in question before they buy their new cars... awaiting those promotions.

If the tax cheating were accurate, it would be BIG at the IRS offices and MANY agentS (plural) would have been involved.
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teddy bear

sceptical
Feb 26 2011, 08:28 AM
Two significant quotes from Richard Emery (Reade’s attorney) in the AP story deserve attention:

Quote:
 
Neither the players nor the school have ever released how much the settlement was worth, but Emery said the tax bill doesn't match what the men received from the school.

"In order to have a lien of that size, Reade would've had to have received 20 million dollars that year. And that's just the wrong set of zeros," Emery said.


The first quote suggests that $6.5 million (the amount of the IRS lien) was not the settlement amount from Duke, although it is not clear as written whether Emery was talking about the payment to all three former lacrosse players or each one.

The second quote about the “wrong set of zeros” is important because it is Emery’s way of saying that the settlement to each guy was under $10 million (one less zero). Emery was apparently trying to steer the reporter without breaking the confidentiality agreement with Duke, which if breached could cost the guys their settlement money.

Emery’s comments are in line with speculation that each received $6 million to $8 million from Duke—far less than the $20 million each claimed by news outlets such as the Daily Mail.
Reporting on this story by the MSP has been murky, at best. However, the lien happy IRS has a nasty habit of taking the entire amount recieved by a taxpayer from any source and treating that amount as the tax due, with no attempt to apply tax rates, deductions, etc. If this was done in this case, Reade's settlement was 6.5 million, which is in line with previous estimates. Still a ton of money from the trustees who claim Brodhead & co did nothing wrong.
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nyesq83
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http://blogs.forbes.com/robertwood/2011/02/28/duke-lacrosse-players-tax-deal/

Duke Lacrosse Player’s Tax Deal?
Feb. 28 2011 - 11:17 am | 3 views | 0 recommendations | 0 comments
By ROBERT W. WOOD

If you’re like me, you were shocked to learn that exonerated Duke Lacrosse player Reade Seligmann—falsely accused of rape—got a whopping $20 million settlement. That’s the calculation by which some explain an IRS tax lien claiming he owes nearly $6.5 million in tax. Detroit News, Ex-Duke Lacrosse Star Insists Tax Bill a ‘Mistake’. An IRS tax lien filed Feb. 17 in New York City claims $6,492,377 in tax from 2007, the year Seligmann and two others settled with Duke. While the settlement was never disclosed, some have speculated:

* Daily Mail: Were the Duke Lacrosse Players Wrongly Accused of Rape Paid $20 Million Each in Secret Settlement?
* New York Daily News: IRS Claims Former Duke Lacrosse Player Reade Seligmann Owes Millions, Lawyer Says Bill Is Mistake

Even if accurate, I can’t say whether that’s a reasonable sum for having your life upended. Still, I can’t help but compare it to far smaller amounts received by innocent victims locked in prison for decades for crimes they too didn’t commit. Just one example: Robert Lee Stinson was awarded $25,000 for 24 years of wrongful imprisonment, and there was some question whether he might get an additional $90,000. See Justice Denied: The Journal for the Wrongly Convicted.

But while I’m not qualified to judge the size of awards, I am qualified to talk about taxes. As a tax lawyer for 30-years, I routinely see successful plaintiffs shocked by the size of their tax bills. You’d think it would be easy to explain what is taxable and what isn’t, but there’s a weird aura surrounding taxes and lawsuit recoveries. The palpable confusion is not only about what cases generate tax bills, but extends to how your income is measured, whether on your net share after lawyer fees, or on the gross including lawyer fees!

Tax Free? If you sue for personal physical injuries like a car accident, your damages are tax-free. Section 104 of the tax code shields damages for personal physical injuries and physical sickness. Before 1996 “personal” damages were tax-free, meaning emotional distress, defamation and many other legal injuries. But since 1996 your injury must be “physical” to be tax-free, and the IRS says your injuries must be visible. See Tax-Free Physical Sickness Recoveries in 2010 and Beyond, Vol. 128, No. 8, Tax Notes (August 23, 2010), p. 883.

This “observable bodily harm” standard generally means that if you sue your employer for sexual harassment involving rude comments or even fondling, that’s not physical enough for the IRS. Taxpayers routinely argue in U.S. Tax Court that their damages are sufficiently physical to be tax-free; the IRS usually wins these cases. See Bruises, Settlements, and the Proposed 104 Regs, Vol. 124, No. 13, Tax Notes (September 28, 2009), p. 1337.

Distinguish between money you receive for physical symptoms of emotional distress (like headaches and stomachaches) and physical injuries or sickness. Still, these lines are not clear. See Symptoms of Emotional Distress vs. Sickness: Sheep From Goats, Vol. 17, No. 4, California Tax Lawyer (Fall 2008), p. 26. For example, if in settling an employment dispute you receive $50,000 extra because your employer gave you an ulcer, is an ulcer physical or is it merely a symptom of your emotional distress? Many plaintiffs end up taking aggressive positions on their tax returns, claiming damages of this nature as tax-free.

Beware Attorney Fees! If you use a contingent fee lawyer, you’ll usually be treated (for tax purposes) as receiving 100% of the recovery even if the defendant pays your lawyer his contingent fee directly. If your case is fully nontaxable (say an auto accident in which you’re injured), that won’t cause any tax problems. But if your recovery is taxable, beware.

Example: Suppose you settle a suit for intentional infliction of emotional distress against your neighbor for $100,000, and your lawyer keeps $40,000. You might think you’d have $60,000 of income. Instead, you’ll have $100,000 of income, followed by a $40,000 miscellaneous itemized deduction. You’ll be subject to numerous limitations, including the alternative minimum tax (AMT) that can whittle your deduction down to nothing.

That’s why many clients say they are paying tax on lawyer’s fees they never received. See Attorney Fee Deduction Problems Remain, Vol. 130, No. 6, Tax Notes (February 7, 2011), p. 707. With high legal fees and costs and the AMT, some clients actually lose money after tax by winning a lawsuit. See Spina v. Forest Preserve Dist. of Cook County. There are some routes out of this mess, but get some professional help and be careful. See AMT Problems For Attorney Fees Remain.

Wrongful Imprisonment? Let’s return to the Duke stars and more serious cases of long term wrongful conviction and imprisonment. What is the tax treatment of those awards? Unclear, and that’s a real travesty. See Tax-Free Wrongful Imprisonment Recoveries, Vol. 130, No. 8, Tax Notes (February 21, 2011), p. 961. Wrongful Imprisonment Tax Ruling Stirs Controversy, Forbes.com (November 17, 2010).
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nyesq83
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If you’re like me, you were shocked to learn that exonerated Duke Lacrosse player Reade Seligmann—falsely accused of rape—got a whopping $20 million settlement. YES I AM SHOUTING.

I HAVE NEVER, NOR HAS ANYONE, "LEARNED" THIS. PAST STATEMENTS HAVE BEEN MADE IN THE MEDIA AND ARE NOT CORROBORATED BY THE PARTIES (AND ESPECIALLY NOT BY THE FALSELY ACCUSED) THAT THE WRONGED STUDENT-ATHLETES WERE PAID APPROXIMATELY $6 MILLION DOLLARS EACH, A PORTION OF WHICH OF COURSE WENT TO THEIR MASSIVE ATTORNEYS' FEES, AND A PORTION OF WHICH HAS BEEN EARMARKED FOR THE INNOCENCE PROJECT AND THE PURSUIT OF A LAWSUIT AGAINST THE CITY OF DURHAM AND ITS CRONIES INCLUDING THE DA NIFONG AND THE DIRTY POLICE.

That’s the calculation by which some explain an IRS tax lien claiming he owes nearly $6.5 million in tax. See Ex-Duke Lacrosse Star Insists Tax Bill a ‘Mistake’.

An IRS tax lien filed Feb. 17 in New York City claims $6,492,377 in tax from 2007, the year Seligmann and two others settled with Duke. While the settlement was never disclosed, some have speculated:

Daily Mail: Were the Duke Lacrosse Players Wrongly Accused of Rape Paid $20 Million Each in Secret Settlement?

New York Daily News: IRS Claims Former Duke Lacrosse Player Reade Seligmann Owes Millions, Lawyer Says Bill Is Mistake

MANY MORE HAVE SPECULATED THAT THE TOTAL WAS UNDER $20 MILLION FOR ALL THREE.

Even if accurate, I can’t say whether that’s a reasonable sum for having your life upended. "LIFE UPENDED?" HAVE YOU READ "UNTIL PROVEN INNOCENT?" BY THE WAY, NICE PHONY MOCK DETACHMENT!

Still, [HERE YOU GO WITH YOUR REAL INTENT] I can’t help but compare it to far smaller amounts received by innocent victims locked in prison for decades for crimes they too didn’t commit.

Just one example: Robert Lee Stinson was awarded$25,000 for 24 years of wrongful imprisonment, and there was some question whether he might get an additional $90,000. See Justice Denied: The Journal for the Wrongly Convicted.

But while I’m not qualified to judge the size of awards, I am qualified to talk about taxes. ARE YOU ALSO QUALIFIED TO WONDER WHY THIS LIEN HAS APPEARED UNDER THE NAME OF AN ADVISING ACCOUNTANT/TAX PREPARER (AND NOT SIMPLY THE INDIVIDUAL TAXPAYER RECEIVING THE SETTLEMENT, WHO STATED THAT HE RECEIVED NO NOTICE OF TAXES OWED? ) - WHEN THE TAXPAYER THROUGH HIS ATTORNEY CLAIMS THAT HE HAS PAID TAXES ON THIS, AND THAT $20 MILLION IS THE INCORRECT AMOUNT?

As a tax lawyer for 30-years, I routinely see successful plaintiffs shocked by the size of their tax bills. HOW OFTEN DO YOU SEE TAX PREPARER MISTAKES OR IRS MISTAKES? THE SHOCK OF THIS TAX PAYER 'SUCCESSFUL PLAINTIFF' (AW GEE, IT NEVER WENT TO TRIAL, SO HOW CAN YOU CALL READE A PLAINTIFF IN THIS CASE WHEN HE WAS ONLY A DEFENDANT IN THE FALSE ASSAULT CLAIM AND IS A PLAINTIFF ONLY IN THE CASE AGAINST CRIMINAL D.A. NIFONG ET AL?) IS THAT THERE IS A PUBLICLY FLOUTED LIEN (MOST LIKELY IN THE SOUTHERN DISTRICT OF NEW YORK, NOT IN NEW JERSEY WHERE THE CLAIMANT RESIDED) AFTER NO NOTICE HAS BEEN RECEIVED BY THE TAXPAYER.

You’d think it would be easy to explain what is taxable and what isn’t, YOU'D THINK IT WOULD BE EASY TO DISCUSS THE BEHAVIOR OF THE IRS IN THIS INSTANCE, WHEN THE FORMER COB OF TRUSTEES AT DUKE WORKED AT THE U.S. TREASURY

but there’s a weird aura surrounding taxes and lawsuit recoveries. THERE'S AN EVEN WEIRDER AURA SURROUNDING THE LIEN ITSELF, THE TIMING OF THIS LIEN AND THE DEJA VU ALL OVER AGAIN RUSH TO JUDGMENT AGAINST MR. SELIGMANN.



NOW THAT YOU HAVE OUR ATTENTION BY PREYING UPON THE UNDESERVED FALSE AND OUTRAGEOUS NOTORIETY OF THIS YOUNG MAN AND HIS FAMILY, YOU CAN FREELY PIMP YOUR EXPERT LEGAL AND TAX ADVICE. I WISH YOU MUCH HEALTH AND WEALTH AND HAPPINESS.

The palpable confusion is not only about what cases generate tax bills, but extends to how your income is measured, whether on your net share after lawyer fees, or on the gross including lawyer fees! BLAH!

Tax-Free? If you sue for personal physical injuries like a car accident, your damages are tax-free. Section 104 of the tax code shields damages for personal physical injuries and physical sickness. Before 1996 “personal” damages were tax-free, meaning emotional distress, defamation and many other legal injuries. But since 1996 your injury must be “physical” to be tax-free, and the IRS says your injuries must be visible. See Tax-Free Physical Sickness Recoveries in 2010 and Beyond. BLAH!

This “observable bodily harm” standard generally means that if you sue your employer for sexual harassment involving rude comments or even fondling, that’s not physical enough for the IRS. Taxpayers routinely argue in U.S. Tax Court that their damages are sufficiently physical to be tax-free; the IRS usually wins these cases. See Bruises, Settlements, and the Proposed 104 Regs. BLAH!

Distinguish between money you receive for physical symptoms of emotional distress (like headaches and stomachaches) and physical injuries or sickness. Still, these lines are not clear. See Symptoms of Emotional Distress vs. Sickness: Sheep From Goats. For example, if in settling an employment dispute you receive $50,000 extra because your employer gave you an ulcer, is an ulcer physical or is it merely asymptom of your emotional distress? Many plaintiffs end up taking aggressive positions on their tax returns, claiming damages of this nature as tax-free. BLAH!

Beware Attorney Fees! If you use a contingent fee lawyer, you’ll usually be treated (for tax purposes) as receiving 100% of the recovery even if the defendant pays your lawyer his contingent fee directly. If your case is fully nontaxable (say an auto accident in which you’re injured), that won’t cause any tax problems. But if your recovery is taxable, beware.

Example: Suppose you settle a suit for intentional infliction of emotional distress against your neighbor for $100,000, and your lawyer keeps $40,000. You might think you’d have $60,000 of income. Instead, you’ll have $100,000 of income, followed by a $40,000 miscellaneous itemized deduction. You’ll be subject to numerous limitations, including the alternative minimum tax (AMT) that can whittle your deduction down to nothing.

That’s why many clients say they are paying tax on lawyer’s fees they never received. See Attorney Fee Deduction Problems Remain. With high legal fees and costs and the AMT, some clients actually lose money after tax by winning a lawsuit. See Spina v. Forest Preserve Dist. of Cook County. There are some routes out of this mess, but get some professional help and be careful. See AMT Problems For Attorney Fees Remain. THIS IS ACTUALLY INTERESTING!

Wrongful Imprisonment? Let’s return to the Duke stars (REALLY...STARS? THEY HAVE BEEN TRYING TO STAY OUT OF THE MEDIA SPOTLIGHT EVER SINCE THEY WERE - EXTRAORDINARILY - DEEMED INNOCENT BY THE NC ATTORNEY GENERAL) ARE YOU SAYING THEY ARE STILL PUBLIC FIGURES AT THIS POINT IN TIME, 5 YEARS AFTER THE NON-EVENT, WRONGFUL PROSECUTION AND INNOCENCE DECLARATION AND 4 YEARS AFTER THE SETTLEMENT?

and more serious cases of long term wrongful conviction and imprisonment.



REALLY? HOW SERIOUS WAS IT THAT THE NEW BLACK PANTHERS WERE SHOUTING, "DEAD MAN WALKING" IN COURT AND THE JUDGE ALLOWED IT!? AND PROFESSORS AT DUKE CARRIED BANNERS SAYING 'CASTRATE'?! HOW SERIOUS WAS IT THAT WITNESSES WERE INTIMIDATED, RECORDS ALTERED AND DESTROYED, LAWS BROKEN, EVIDENCE IGNORED, ETC.

What is the tax treatment of those awards? APPLES AND ORANGES, MY DEAR EXPERT. DUKE IS NOT THE STATE. DUKE IS A PRIVATE ACTOR!!!!

Unclear, and that’s a real travesty. THIS, TOO!

See Tax-Free Wrongful Imprisonment Recoveries and Wrongful Imprisonment Tax Ruling Stirs Controversy.
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chatham
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Maybe it was someone hacking into the IRS computer and adding Reade's name and other info. Maybe once Reade's name was added an automatic letter is generated and sent to the person, whoever that may be. Maybe the IRS is in the dark as much as the seligmann's and everyone else. Then maybe someone just mentioned to that Detroit press something that made one reporter interested in looking.

Maybe not also.
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Quasimodo

Quote:
 
Maybe the IRS is in the dark as much as the seligmann's and everyone else


A specific revenue agent's signature is on the lien. If he did not sign it, then that is forgery.

If it is genuine, I want an explanation as to what procedures he followed before he issued the lien.

Because if the IRS can be used to pressure private citizens who are engaged in civil litigation,
then there needs to be firings and a congressional investigation.

(We pay the congresscritters and we have the right to ask them to perform their duties at least
once in a decade...)

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Deleted User
Deleted User

I have friends in another state who were hounded and harrassed for 8 months by the IRS over their "meals out" deductions for their business related travel. The IRS agent even wanted to come to their HOME to SEE their "home office". He made them cough up every receipt and document every penny. They had never been audited before, and have never had any tax issues before. For 8 months, one of the two of the couple was caught up in trying to appease the IRS and feed the insatiable agent's witch hunt.

Finally, last week, they closed it. Our friends owed a paltry $1200, and actually probably did not even owe that, but were so glad to get the investigation over that they would gladly pay it... and would have been happy if they could have paid it up front and saved the loss of income and loss of focus caused by the witch hunt with a neophyte agent who was just flexing his muscle and trying to make a name for himself.

The IRS can make a private citizen's life hell, and there is not even an "excuse me" or "Sorry we distracted you for all these months and caused your business volume to drop while we played our little power game with you" :bump:

I've heard it said that once you have been audited, you are not likely to be subjected to another one for several years. For my friends' sake, I hope that is true. Life is too short to be shortened further by out of control IRS agents looking for ways to harrass honest people in the name of the "government" ( of, by, and FOR THE PEOPLE????)

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Mason
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Parts unknown
.
This is different from the situation where someone is suing the government (Prisons are Big Gov't). This is a ultra-wealthy school that asks you to send your kids there and they'll take care of them. These kids' parents are 1,000 miles or more away.

A private school like Duke has a much different obligation to their kids than a Federal government has with the general public, (hiding behind a jury in many cases).

You also have the internal manipulation of the Duke Email (IT) system, and the Police let into Dorms to interrogate kids without legal representation. You also have those authorities (and Duke) pursuing students along racial lines. Nifong, the Police, and the Duke Admin/authorities had no interest in questioning the black attendees and went to pains to eliminate him from the events that he was a party to.

The Duke Admin was also bad-mouthing the team, their students to the media - and they failed to rein in their liberal lynch mob (Duke Professors), even in the face of overwhelming evidence of innocence.

.



Edited by Mason, Feb 28 2011, 07:36 PM.
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Baldo
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Who are these idiots who write articles about tax liens when they don't know anything about the case?

Personally I am hoping the the City of Durham and the other defendants are going to be spending a hell of a lot more money to settle this case. Few gave a damn in 2006 when some players were forced to sleep in their cars, when their siblings couldn't sleep, when they were hooned, scorned, and degraded by their professors. What about their parents' misery and worrying how could they raise the bail?

Count me in on the 2006 Duke Lacrosse Team, coaches, and their parents taking this all the way.
Edited by Baldo, Feb 28 2011, 08:14 PM.
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nyesq83
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Posted Image
ABOUT ME
Robert W. Wood is a prominent tax lawyer with a national practice. A partner with Wood & Porter (www.woodporter.com), he is admitted to practice law in California, New York, the District of Columbia, Texas, Montana, Arizona, Washington and Wyoming. He is Certified as a Specialist in Taxation and Qualified as a Solicitor in England.
Named among the best tax lawyers in America, Wood is a Fellow of the American College of Tax Counsel and consults with clients in tax matters nationwide. He serves as an expert witness, speaks nationally to professional groups, and hosts The Legal Broadcast Network’s Tax Channel.
The author of over 30 books and hundreds of articles, Wood is most well-known for advising litigants on the tax treatment of settlement and judgments. His book, Taxation of Damage Awards and Settlement Payments (4th Ed. Tax Institute © 2009), is in wide use by lawyers, judges, mediators and courts nationwide. He has advised plaintiffs and defendants in airline disaster, toxic spill and catastrophic injury cases, landmark whistleblower, fraud, trade secrets and patent litigation, celebrity divorce and palimony cases. He has advised on the tax consequences of marquis antitrust, civil rights and wrongful conviction cases, SEC restitution, and environmental contamination litigation. He has also had significant victories litigating tax cases, including invalidating a long-standing provision in the Treasury Regulations.
He can be reached at wood@woodporter.com.
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Baldo
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So Mr. Woods should know better not to open his mouth without finding out the facts. Just another effing mouth who has to say something.

Above he should know Tax Liens are not always about reality!
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Deleted User
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I would love to see NJ Gov. Cristi weigh in on this one. I believe he could take the IRS on and make mincemeat out of them before they could turn their computers on. I hope the Seligman's use every resource to expose the corruption and abuse of power that has take place about Reade's tax obligations.
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Quasimodo


An explanation needs to be forthcoming, if the IRS has been used to pressure litigants in a civil case.

This kind of abuse using the IRS (or by the IRS) needs to be investigated and curbed.

Make some noise.


Quote:
 
http://www.treasury.gov/tigta/contact_report.shtml

If you are aware of fraud, waste, mismanagement, and abuse in the IRS programs and operations, report it to the TIGTA's Hotline!

What kinds of things should you report?

Allegations of violations that impact the integrity of Federal tax administration and IRS programs. This includes allegations of misconduct by IRS employees.

Allegations of improprieties, false claims and fraud by outside contractors attempting to defraud the IRS by utilizing deceptive contract methods.

Allegations of identity theft where any individual (s) impersonated the IRS or an IRS employee or used words, letters, symbols, or IRS emblems to illegally obtain personal, confidential or private financial information.

Examples of specific allegations that should be reported include, but are not limited to: attempts by taxpayers to bribe IRS personnel; extortion or misuse of position by IRS personnel; assaults and/or threats by taxpayers against IRS employees; schemes involving the use of computer technology or mail that impersonate the IRS or IRS personnel; misconduct by tax practitioners (falsification of qualifications, theft of IRS tax remittances and theft of IRS tax refunds).


Your complaint will be kept confidential if it is received on the phone, through the mail, or in person. We cannot guarantee confidentiality if you send your complaint via the online form or e-mail.

Laws protect you from reprisals (any action taken against you because you filed this complaint).

You can submit your complaint by these methods:

By Online Form or Email (TIGTA Hotline Complaints Unit):
Remember: if you submit your complaint via the online form or email, it is possible - though unlikely - that others could read it since the internet is not secure.

By Phone:
Call toll free: 1-800-366-4484

By Fax:
(202) 927-7018

By Mail:
Treasury Inspector General for Tax Administration
Hotline
P.O. Box 589
Ben Franklin Station
Washington, DC 20044-0589

ONLINE FORM AT SITE
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