It isn’t just an IRS official pleading the Fifth Amendment that’s slowing efforts to uncover the facts behind the Internal Revenue Service scandal. It’s Section 6103.
The tax code’s privacy protections -- designed to prevent disclosure of taxpayers’ information -- were mentioned 26 times in the first round of congressional hearings on the IRS, repeatedly stopping lawmakers’ inquiries. The constitutional protection against self-incrimination was invoked once.
Lawmakers investigating the tax agency’s scrutiny of small-government groups are finding their inquiries slowed as they navigate the few paths allowed by the privacy rules. The restrictions will make it difficult for Congress and the public to get a complete picture of what happened inside the IRS.
“Even normal routine oversight is really stymied,” said Dean Zerbe, a former tax aide to Republicans on the Senate Finance Committee. “There’s not nearly as much oversight as you would see in similar agencies, both by the press and by Congress, because of this opaqueness.”
Because of Section 6103, the IRS can respond only with generalities to accusations hurled at the agency by taxpayers or lawmakers. In cases where the IRS erred, its executives can hide behind the privacy shield.
In testimony at three hearings this month about IRS scrutiny of small-government groups, agency officials and the Treasury inspector general for tax administration invoked section 6103 to stifle questions. The Ways and Means Committee’s next hearing, set for June 4, will give the groups a chance to air their grievances about delays and intrusive questions from the IRS.
The law gives the chairmen of the Ways and Means and Senate Finance panels authority to request otherwise-private information about tax returns, such as what triggers an audit or how taxpayers are committing fraud.
Specific taxpayer information is available to the panels only in a closed session. The most common way in which taxpayer information becomes public is through court cases.
“Investigating the IRS was pretty difficult because of the great restrictions placed on our ability to use the information in a public way,” said Donna Flynn, staff director of the Ways and Means oversight subcommittee from 1995 to 1998.