2 Hous. Bus. & Tax L.J. 1 (2002)

handle is hein.journals/houbtalj2 and id is 1 raw text is: COPYRIGHT  2002 HOUSTON BUSINESS AND TAX LAW JOURNAL. ALL RIGHTS RESERVED.

SHOULD THE INTERNAL REVENUE CODE BE
AMENDED TO PERMIT IRS SPECIAL AGENTS
TO DISCLOSE THAT TAXPAYERS ARE UNDER
CRIMINAL INVESTIGATION PRIOR TO THE
DECISION TO PROSECUTE?
Edward D. Urquhart*
TABLE OF CONTENTS
I.    LABELING INNOCENT TAXPAYERS AS CRIMINALS .................. 3
II.   THE FAULTY REASONING OF THE JCT .............................. 5
A. Third Parties as Potential Targets of IRS Criminal
Investigations  .............................................................   5
B. Misinterpretation of the Confidentiality Statute ...... 7
C. Government Liability for Unlawful Disclosures
Under Section  7431  ...................................................  15
III.  THE FAULTY REASONING OF THE TREASURY
D EPARTM  ENT  ...................................................................  20
IV.   THE JCT AND TREASURY DEPARTMENT
RECOMMENDATIONS STRIP TAXPAYERS OF THEIR
RIGHTS TO CONFIDENTIALITY .......................................... 25
V.    THE RECOMMENDATIONS ELIMINATE IRS LIABILITY
U NDER  SECTION  7431 .......................................................... 27
V I.  CONCLUSION    ..................................................................... 27
V II.  A DDEN DUM   .......................................................................... 28
On January 28, 2000, the Staff of the Joint Committee on
Taxation (JCT) published its Study of Present-Law Taxpayer
Confidentiality and Disclosure Provisions as Required by Section
3802 of the Internal Revenue Service Restructuring and Reform
Act of 1998.' In the JCT Study section entitled Disclosure of
*Attorney at Law, Houston, Texas; South Texas College of Law, J.D., 1976; New York
University School of Law, LL.M. in Taxation, 1977.
1. JOINT  COMM. ON   TAXATION, STUDY  OF  PRESENT-LAW  TAXPAYER
CONFIDENTIALITY AND DISCLOSURE PROVISIONS AS REQUIRED BY SECTION 3802 OF THE
INTERNAL REVENUE SERVICE RESTRUCTURING AND REFORM ACT OF 1998, VOL. 1: STUDY
OF GENERAL DISCLOSURE PROVISIONS (Jan. 28, 2000), available at http://www.house.gov/

What Is HeinOnline?

HeinOnline is a subscription-based resource containing nearly 2,700 academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline with pricing starting as low as $29.95

Access to this content requires a subscription. Please visit the following page to request a quote or trial:

Already a HeinOnline Subscriber?