IRS Cutting Jobs of Those Who Audit Estate Taxes of Wealthy

The Bush administration is cutting by nearly half the number of lawyers at the Internal Revenue Service (IRS) who audit the estate tax returns of some of the wealthiest Americans, the New York Times is reporting. Some within the agency are charging that the job cuts are a back-door way for the administration to achieve what it can't achieve legislatively – repeal of the estate tax.

Within the next two months or so, the administration plans to cut the jobs of 157 of the IRS's 345 estate tax lawyers, plus 17 support personnel.

IRS deputy commissioner Kevin Brown maintains that the staff positions are no longer needed because far fewer people are now obligated to pay estate taxes under the tax measure enacted during President Bush's first term.

But six IRS estate tax lawyers who will likely lose their jobs said in interviews with the Times that the cuts were just the latest moves behind the scenes at the IRS to shield people with political connections from being audited.

Sharyn Phillips, a veteran IRS estate tax lawyer, called the cuts a “back-door way for the Bush administration to achieve what it cannot get from Congress, which is repeal of the estate tax.”

In a July 27, 2006, editorial on the job cuts at the IRS, "More Hope for the Truly Rich," the Times is openly skeptical of the IRS's claim that it will still catch most of the estate tax cheats. The Times notes that the IRS, despite a court order, still hasn't released the data that would allow researchers — and the public — to verify whether cutting back on estate-tax audits is sound enforcement policy.

To read the Times article on the IRS staff cuts, click here. (Free registration required and article is available free of charge for only one week.)

For an abbreviated version of the Times story in the Wilmington Star click here.

To read the Times editorial in the International Herald-Tribune, click here.

The Times article is by David Cay Johnston, author of the book Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich -- and Cheat Everybody Else. For more on the book, click here.