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IRS investigation: big question is ‘why?’

| May 20, 2013 | Business & Commercial Law |

National and international news outlets have been erupting in recent days with coverage on the IRS investigation. If you’re behind on the times, basically what’s happened is that the IRS has been accused of discrimination against conservative groups seeking a tax-exempt status, specifically, those associated with the Tea Party. The big question in Washington that will determine whether the IRS has broken the law will is “Why?”

As an article published today on TheWeek.com points out, if there is evidence that the IRS discriminated against these groups with intent and knowledge that it was illegal, then there will be a criminal element. However, if incompetence is determined to be the cause, there will not likely be any criminal repercussions. What’s at stake if the IRS is proven to have broken these laws?

1. Civil Rights Laws: Fines and possible imprisonment await anyone found guilty of violating these laws.

2. The Hatch Act: The possible penalties include: “removal from federal service, reduction in grade, debarment from federal employment for a period not to exceed 5 years, suspension, reprimand, or a civil penalty not to exceed $1,000.”

3. Perjury Laws: Depending on the type of perjury committed, penalties can include fines and up to five years imprisonment.

Proof of intent will be the determining factor in this investigation. Regardless of whether this is proved to be a cover-up, it is not outside of the imagination that this investigation may lead to a change in regulations to protect against these three laws being broken, or, if proof of intent is not discovered, to mitigate against the level of incompetence that would lead to such an investigation.