The IRS: The Most Secretive Institution in the Federal Government

For nearly eight years, I worked for the IRS. I did not process tax returns. In fact, I rarely saw tax returns. My job was unique for the tax collector. I was one of nearly 10,000 employees at the headquarters of the IRS in Washington D.C. , but I was the only one with the job title of historian. I turned out to be not only the first, but also the last, official IRS historian!

In the 1990s, my revelations of massive document destruction at the IRS, essentially the wholesale loss of the history of one of our most important government agencies, rocked the tax collector—at least for a moment. My revelations helped lead to congressional hearings and even a new law. Unfortunately, little has changed in the attitude or actions of the tax collector toward its recored-keeping responsibilities for the American people.

Today, the IRS remains our most secretive and powerful federal agency. Without records, they remain unaccountable to Congress, but most of all to the taxpayers they pledge to serve.

After 16 years of working for the federal government as a professional historian, my career came to a jolting halt at the end of 1995 when I found myself facing allegations that I had wrongfully leaked sensitive information to a history professor from Franklin and Marshall College in Pennsylvania . While untrue—even laughable in retrospect—the lobbing of false charges against a federal historian aroused little concern among my fellow professional communities—historians, archivists, and records managers.

The story behind the false charges provides a fascinating and disturbing glimpse inside the workings of the IRS investigations staff. The trouble began with a FOIA (Freedom of Information Act) request filed by Professor John Andrew, who was searching for records related to IRS targeting of left-wing political groups during the Nixon administration. In his research, Andrew used transcripts of congressional hearings during the Watergate era and noticed specific IRS documents identified in footnotes. When his FOIA request asked for those very records, the eagle-eyed investigators inside the IRS jumped to the conclusion that the only way that Andrew could know to cite specific documents by date, subject, and name of the author was if I had leaked such information to him.

Of course, the reality, sadly, was that the documents that Andrew sought, were destroyed by the IRS long ago. When two IRS special investigators drove to Lancaster , Pennsylvania to grill Andrew about how this information had been leaked to him by (obviously!) the historian, he simply pulled out his copy of the congressional hearing and pointed to the footnotes. As he later explained this bizarre visit to me, he said, “I don't think those investigators had a clue what a footnote was!”

I live with my own personal sense of contentment that I did the right thing by resigning in protest when I learned of the false charges. I also live with deep disappointment that I was essentially abandoned by my peers simply because I worked for an agency that is considered to be of little historical importance or interest.

The years I spent with the IRS tell the story of a breakdown of federal records management when pitted against the powerful bureaucracy and intransigence of the IRS. The result of the untimely end of my federal historical career? The smattering or records from the IRS held by the National Archives increased slightly after my departure, primarily the result of the accessioning of three rooms of documents I personally squirreled away during my tenure. But there it stops. My career sacrifice, I have decided meant nothing in terms of reforming IRS records management, alerting the historical community to serious record keeping issues inside the government, nor increasingly the availability of IRS records to potential researchers.

Of course, this implies that someone out there cares about IRS records. How does one explain the nearly nonexistent reaction from the press, the public, and (most alarming to me) my professional colleagues in the historical community to my revelation that the IRS had systematically and intentionally (as well as unintentionally) destroyed its paper trail for the entire twentieth century? Over the past few years, I have been forced to reach the disturbing, if self-evident, revelation. No one really cares.

My sad realization is that as long as the tax collector doesn't reach into your own pocket, you don't give a hoot whether the National Archives has any IRS records. I was shocked to hear historians (yes historians!) nervously laugh, then tell me that perhaps is was a good thing that there were no IRS records because perhaps this decreased their chance of being audited.

Never has a federal agency—and its power—been so misunderstood by those we expect to monitor that power—journalists, historians, and record keepers. In the end, I concluded that the IRS—not the CIA, not the FBI, not the NSA—is the most secret of all our federal agencies. How can that be? Simple. Destruction of records is a far more permanent method of hiding from public view than stamping “Top Secret” on them and locking them away. There are no IRS documents from the 1930s or 1940s or 1950s waiting to be declassified. They're simply gone.

How could the IRS get away with shredding nearly their entire paper trail? Easy. No one was looking. The journalists were more focused on whether their mailboxes contained a notice from the IRS than on the tremendous investigative powers Congress has placed in the hands of this agency. Historians have overlooked the larger picture of the important role the tax collector has played in the forward march of American history, passing by the IRS as an uninteresting bureaucracy. Somehow historians have failed to make the connection between tax collection and America 's financial, social, governmental, and military history.

But not only was no one looking over the shoulder of the IRS, another important element in explaining how we lost so much essential history is that the IRS outsmarted us all. While journalists and historians may have been oblivious to the power wielded by the IRS behind the scenes, the IRS was well aware of its own powers and the need to obscure them from public scrutiny. They took advantage of our naivety. They also held the ace in the deck—something called Section 6103 of the Internal Revenue Code. This is the section of the tax code that governs the confidentiality of tax returns; the clause that keeps your tax return between you and the tax collector.

Rather than using Section 6103 for what it was meant, i.e., protecting tax returns, the IRS took the convenient position that Section 6103 trumped everything else when it came to federal laws, rules, and regulations, including the Federal Records Act. This meant that the IRS swept its entire documentary trail under the realm of “tax return information,” allegedly protected by Section 6103, whether or not a particular document had anything to do with tax data. Unwilling to take on the behemoth IRS (as well as lacking any push for access from any interested community), the National Archives and Records Administration turned a blind eye to this practice.

It has been a long and lonely ride for me to try to preserve and protect the history of our tax agency. The ultimately irony, I think, is that we celebrate our history as a nation which fought a war for independence based largely on issues related to taxation and yet we have let the history of the agency we created to enforce our own system of taxation languish into virtual nonexistence. The result, although we remain blissfully unaware of its potential consequences, is that we have granted the IRS powers above and beyond those of any other federal agency. One just has to wonder what the founding fathers would think of that!