As if anyone needs yet another reason to hate the IRS...
William P Barret of the Forbes.com blog has put together the following article on the legal battle between Robert Coleman and the IRS, and why taxpayers have one more reason to despise the federal collection agency.
You don’t have to be a supporter of the Tea Party to hold a dim view of the Internal Revenue Service. Still, we’re going to tell you about a case that will make your blood boil.
The agency told Robert Colman of Santa Monica, Calif. he had no claim to a 15% informant’s reward after reporting his 90-year-old mother was embezzled of $1 million by a Los Angeles accountant not paying taxes on his ill-gotten loot. But the feds told Colman–in writing–he could appeal the whistleblower bounty denial by suing in the U.S. Court of Federal Claims. Yet when Colman did just that–after the accountant pleaded guilty to a tax felony involving non-reporting of the very same money–the government said Colman had no right to sue.
Astonishingly, the IRS won.
The same court, which is based in Washington, D.C., just ruled that Colman was given very bad advice but that the federal laws establishing the tribunal did not give it jurisdiction over this kind of claim when Colman sought his reward in 2003. Judge Thomas C. Wheeler wrote he was “troubled” by the IRS written assertion that Colman could sue followed by the later denial but that a party cannot confer jurisdiction upon a limited-jurisdiction federal court simply by writing that it exists. “The public rightly should expect better from its federal agencies,” he wrote. But “the parties are powerless to create jurisdiction by consent.”
According to court records, the accountant in the case, Steven Krell, who was also a lawyer, later pleaded guilty to state grand theft charges involving Colman’s mother and one other person. Besides making what was described as “significant” restitution, he served some jail time, giving up his law and accounting licenses.