Editorial: Fishy firings at the IRS

Friday, July 28, 2006 | 7:47 a.m.

The Internal Revenue Service plans to cut the jobs of nearly half the lawyers who audit the tax returns of wealthy Americans who are subject to estate taxes - coincidentally, the very tax the Bush administration has vainly tried to eliminate.

According to a story this week by The New York Times, the jobs of 157 of the IRS' 345 estate tax lawyers are to be eliminated in the next two months. Also to be eliminated are the jobs of 17 people who provide support services to the lawyers.

The staffing cuts come in the wake of Bush administration policies that have substantially whittled away the number of Americans who must pay gift and estate taxes. IRS officials say the job cuts are warranted because, due to Bush administration tax measures, fewer Americans are paying the tax so fewer audits are needed.

But IRS audit lawyers, some of whom are likely to lose their jobs, told the Times that the job cuts are actually an effort to further limit the number of wealthy Americans who are forced to pay estate taxes, by having too few auditors on staff to screen their returns.

These are not audits of middle-class taxpayers but of those who earn more than $1 million a year - many of whom the auditors say have devised methods to avoid paying taxes, such as complex equations that are used to understate the value of assets.

Over the past five years, the Times reports, IRS and Treasury Department officials have told Congress that tax cheating is a growing and major problem among the wealthiest Americans. Those who audit this group of earners are among the IRS' most productive enforcement personnel, finding an average of $2,200 in unpaid taxes for every hour they work.

The Bush administration is running huge deficits at a time when the country is nearly $9 trillion in debt. So how can it justify eliminating employees who are successful in recovering money owed to the government? It is no secret that Bush wants to repeal the estate tax, but so far Congress hasn't obliged. Evidently, crippling its collection is his next strategy.