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Tax Notes Today Quotes Mark Matthews on Letter Senator Grassley Sent to Justice Department on IRS Impersonation Scams
Caplin & Drysdale

Tax Notes Today Quotes Mark Matthews on Letter Senator Grassley Sent to Justice Department on IRS Impersonation Scams

Date: 4/11/2016

Mark E. Matthews spoke with Tax Notes Today regarding the letter Senator Grassley wrote to the Justice Department's Deputy Attorney General Sally Quillian Yates inquiring as to why there have not been many publicized prosecutions of people involved in IRS impersonation scams. As a former IRS Deputy Commissioner, Mr. Matthews comments on the cases involving IRS impersonation scams. For the full article, please visit Tax Notes Today's website (subscription required).

Excerpt taken from the article "Grassley Letter Raise Impersonation Scam Enforcement Questions" by Nathan J. Richman for Tax Notes Today.

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Who Should Handle the Cases?

Grassley's letter states that he believes that the IRS impersonation scams are within the purview of CI and the DOJ Tax Division. He copied the letter to Caroline Ciraolo, acting assistant attorney general in the DOJ Tax Division.
 
However, Mark E. Matthews of Caplin & Drysdale Chtd., a former CI chief, said that the cases are primarily handled by TIGTA and the DOJ Criminal Division. "It makes sense because these are not tax cases, there are no tax issues . . . . [T]hese are pure fraud schemes," he said. The need for uniformity in resolving tax issues, the reason to use the Tax Division rather than local U.S. attorneys, is not at stake, he said.

While there may be some reason to use tax enforcement resources of CI and the Tax Division to prosecute stolen identity refund fraud because the fraud proceeds come from the tax system, Matthews said, that justification does not hold for impersonation scams targeting victims directly. Matthews is just one former CI chief who has questioned the use of CI resources even for identity theft. (Prior coverage 2014 TNT 211-1: News Stories.)

Referring to his recent Tax Notes article 2016 TNT 50-14: Viewpoint, Matthews repeated his call for more funding for CI as an alternative to relieving CI of the responsibility for both impersonation scams and identity theft, which he regards as pure fraud schemes.

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Matthews agreed that visible prosecution of impersonation scammers would be positive. "Not only would those people get what they deserve, but it would increase people's understanding that these are just scams and frauds," he said.

Debt Collectors

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Matthews said the restrictions on tax debts eligible for private debt collection mean that the taxpayers who could receive communication from legitimate private debt collectors would have already received communication from the IRS concerning their tax debt. "If that collection agency is calling, it's not out of the blue," he said.

However, Matthews said the IRS, if properly funded, would be better able to do the collection activities because of issues such as taxpayer privacy and other rights. "The IRS is a bargain, the IRS is efficient, and the return on investing in IRS resources is always" a large, positive multiple of the amount invested, depending on the branch funded, he said.

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