IRS Investigations: They Plead the Fifth, but Want You to Plead Guilty

On May 22, 2013, Lois Lerner – Director of the IRS’ Exempt Organizations Division – stated before Congress that neither she nor her division had inappropriately or unfairly targeted certain politically-oriented groups for auditing. Was this just a position statement? Did this constitute “testimony?” Regardless, she certainly seemed to be absolving herself and her staff of misconduct or criminal behavior. But when asked to provide further testimony on the matter, Ms. Lerner . . .

Plead the Fifth.

Now, the important question here isn’t whether or not she was legally entitled to invoke this protection against self-incrimination. The important question here is, how does the IRS, which aggressively scrutinizes your return for signs of wrongdoing hold itself to be above the scrutiny of the Congress which funds it? And by extension, why do its representatives, like Ms. Lerner, get to excuse themselves from being investigated, when you can’t excuse yourself from being investigated by one of its representatives? Let’s say you’re approached by an IRS Revenue Agent or IRS Special Agent. Can you refuse to talk? Well, actually, you can – but they’ll call that “non-cooperation,” and use that as proof of your “guilt.”

But wait! What if you haven’t done anything wrong? It’s true that the IRS won’t launch a criminal tax investigation against someone unless they think they have a good reason to do so – but it’s also true that sometimes, they’ll do it for wrong or insufficient reasons. This conduct can understandably lead taxpayers to feel that perhaps they’ve been inappropriately or unfairly targeted for auditing.

Of course, the real difference between Mr. and Ms. Taxpayer and Lois Lerner is that Ms. Lerner is not going to jail for contempt of Congress. No investigation of her or anyone on her staff will result in any penalty greater than, at most, censures or forced resignations. No one at the IRS is going to face criminal prosecution as a result of this scandal. Any investigation of you, on the other hand – even a civil investigation – could turn into criminal prosecution, especially as most IRS criminal investigations began as civil investigations. There’s a good chance that if you are the target of an IRS investigation, it may be for something that should, at most, merit civil rather than criminal penalties – but you don’t get to decide that. You’re not going to get to plead the Fifth. But you can plead guilty. It won’t earn you a slap on the hand from Congress – but it will get you a shorter prison sentence. And that’s fair, right!?! So you’ll have to fight in court for the very freedom they take for granted.