IRS Wipes Hard Drive that Court Ordered It to Preserve

AP Photo

Despite a court preservation order, the IRS has wiped the hard drive of their former director of transfer pricing operations, Samuel Maruca.

Maruca is connected to the agency’s controversial retainer of law firm Quinn Emanuel. The IRS privately contracted the litigation firm to assist in an audit of a corporate taxpayer, overlooking the firm’s lack of any experience managing sensitive tax data.

The IRS has faced criticism for its decision, specifically from Finance Committee Chairman Orrin Hatch. In a letter to the IRS, Senator Hatch voiced his concern that the agency’s $2.2 million tax-payer funded contract with the outside firm was completely unnecessary; the IRS currently employs 40,000 individuals trained to manage taxpayer data and audits, as well as the expertise of the Chief Counsel and Department of Justice attorney.

To protect taxpayers, there are strict regulations from Congress that limit the necessary functions of the auditing process — including acquiring sworn testimony — to officers of the Treasury Department. According to Senator Hatch, the IRS neglected to follow protocol when they hired the outside firm without first requesting authorization from Congress to do so. The Finance Committee has never before seen such functions relegated to private contractors.

This isn’t the first time the IRS has ignored a preservation order and destroyed sensitive information. In March 2014, nine months after receiving a congressional subpoena to preserve and turn over the information, the agency deleted approximately 24,000 emails that belonged to Lois Lerner, a former IRS official who was a central figure in a scandal that targeted conservatives.

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