Senior IRS executives almost never look at individual tax returns, he said, explaining what he would say to friends inquiring about their tax bills or charitable contributions.
“My standard answer was, I’m about the last person on the planet who could ever look at your tax return,” said Matthews, who left the IRS in 2006.
Hand Tied
In congressional hearings, he said, the tax agency is in effect fighting with one hand tied behind its back.
IRS officials’ invocations of Section 6103 mirror the use of the Fifth Amendment right against self-incrimination, said Joseph Thorndike, a tax historian and contributing editor at Tax Analysts in Falls Church, Virginia.
“I suspect that mostly it’s used as a convenience for the IRS and as a genuine protective device for taxpayers,” he said. “Everybody assumes that it’s an admission of guilt, even when it’s not or even when it’s necessary.”
The rules provide a series of exceptions that allow state governments, law enforcement agencies and others to obtain taxpayer-specific information.
The Ways and Means and Finance chairmen rarely request taxpayer information, said Floyd Williams, the IRS chief liaison to Congress for 16 years before he retired in 2012. Other panels need resolutions from the House or Senate for access.
‘6103 Barrier’
The limits can frustrate congressional inquiries, said Zerbe, now national managing director at Alliantgroup LP.