Tax Accountant Indicted After Investigation by Vindictive IRS Agent

By National Center for Public Policy Research | July 7, 2008 | 8:21pm EDT

(Editor's Note: The following is the 47th of 100 stories regarding government regulation from the book Shattered Dreams, written by the National Center for Public Policy Research. CNSNews.com will publish an additional story each day.)

Richard Gardner owns and operates Gardner's Tax Service in Tulsa, Okla. His firm prepares between 4,500 and 6,000 tax returns a year, making it one of the largest tax services in the state.

In March of 1995, approximately 15 armed Internal Revenue Service agents and five U.S. Marshals came to Gardner's office with a search warrant. They seized his computers, printers and his clients' tax returns. Despite the implications of wrongdoing, Gardner was not charged with any crime. Nor was he arrested.

Two years later, however, Gardner was indicted on 23 federal counts. Gardner testified before the U.S. Senate Finance Committee that during the two-year period, the IRS examined between 35,000 and 45,000 of his clients' files looking for proof that Gardner had committed tax fraud. It had questioned hundreds of his clients - some in a threatening manner - and spent hundreds of thousands of dollars to prove their claims of wrongdoing. But the IRS failed to find any improprieties. Despite a lack of evidence of unlawful activities, the Department of Justice (DOJ) still indicted Gardner in March of 1997 on 23 federal counts.

An IRS agent who was present at the initial raid of Gardner's business handled all 23 of the counts. Gardner testified in the Senate that this agent had a personal problem with him, saying that the agent told two of Gardner's employees, "I've had a personal vendetta against Richard Gardner for 15 years." In December of 1997, the DOJ dropped two counts against Gardner. In January 1998, in federal court, all of the other counts were dropped, and the case was dismissed.

This ordeal, which lasted 33 months, put great strain on Gardner and his family. He believes the IRS - and that one agent in particular - was out to break him financially and emotionally. He said that the IRS wanted "a high-profile, guilty-even-if-you-are-not victim to use to scare other tax preparers and taxpayers."

Source: Testimony of Richard Gardner before the Senate Finance Committee


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