by Alexander Hendrie • Americans for Tax Reform
Although there was a court preservation order on all documents related to the IRS hiring of the outside firm, the hard drive was erased anyway. The order was borne of a Freedom of Information Act (FOIA) request submitted by Microsoft.
Even though the white shoe law firm has zero experience handling sensitive tax data, taxpayers have been footing bills of over $1,000 per hour for its services.
As reported by legal news service Law360:
The IRS informed the U.S. Department of Justice last month that it did not wipe the hard drive until April of last year, after the hold was in place, according to a Friday filing by the U.S. Department of Justice in a Washington federal court. The hard drive belonged to Samuel Maruca, former director of transfer pricing operations at the IRS Large Business and International Division.
IRS attorneys “have continued to study whether or how the foregoing might implicate the Service’s obligation to conduct a reasonable search in response to Microsoft’s FOIA requests,” the statement said.
The deleted hard drive belonged to the agency’s former director of transfer pricing operations at the IRS Large Business and International Division, likely a key employee involved in the controversy. It is not known if there is any way to recover documents belonging to the employee.
Despite its complete inexperience handling audits or taxpayer data, Quinn Emanuel was hired under an initial $2.2 million contract.
This unusual decision prompted a probe by Finance Committee Chairman Orrin Hatch (R-Utah), based on concerns that the decision to hire outside contractors was expensive and entirely unnecessary.
As Sen. Hatch pointed out in his letter to the IRS, the agency already has access to around 40,000 employees responsible for enforcement. The IRS can also turn to the office of Chief Counsel or a Department of Justice attorney, both of which have the expertise to conduct this kind of work, without risking sensitive information.
In fact, this hiring decision was described as “troubling” by a federal judge.
This is not the first time the agency has failed to preserve key information. The IRS also “accidentally” destroyed the hard drive belonging to Lois Lerner during investigations into the targeting of conservative groups. As many as 24,000 emails were lost forever when 422 backup tapes were wiped clean despite an agency-wide preservation order and congressional subpoena.
In the Lerner case, the IRS failed to take simple steps to ensure compliance with the order, according to a report by the House Oversight Committee.
Now, it appears that important information has once again disappeared because of IRS corruption, incompetence, or both.