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'The Wheels Are Falling Off the Wagon at the IRS': Six Things We Learned When a Former IRS Employee Opened Up Online — And the Big Reason People Didn't Trust Him


"The IRS couldn't ask for a better 'leaker.'"

Michael Gregory. (Image via Twitter)

Did a longtime tax collector come out and reveal the gory details of problems at the IRS...or did he merely come out begging for more money?

The "Ask Me Anything" session that former IRS Territory Manager Michael Gregory hosted on Reddit Saturday left readers divided.

Some people seemed satisfied with his answers, while others accused him of just being an IRS shill, even in retirement, because of the one thing he seemed to bring up most: giving the IRS more funding.

Michael Gregory. (Image via Twitter) Michael Gregory. (Image via Twitter)

"IRS Employees are forbidden from lobbying Congress, leaving former agents and insiders like myself to raise the alarm about what is happening to and within the agency," Gregory wrote, explaining why he was reaching out to the public, penning open letters about IRS troubles and preparing to publish a book titled, "The Wheels Are Falling Off the Wagon at the IRS."

He said he "hopes [to] draw much-needed attention to an ongoing crisis impacting American taxpayers."

What did Gregory say on Saturday? Here are a few things we learned.

1. Can the average American probably get away with tax evasion?

"Yes, definitely," Gregory wrote. "The odds of getting caught are currently going down. In 2013 the IRS audited 0.82% of returns, down from 0.98% in 2010."

If you do plan to cheat on your taxes, "The numbers better add up [and] the cross-checks better make sense with your returns," Gregory wrote, adding that getting paid in cash, obviously, makes it a lot easier to get away with tax evasion.

Of course, he advised against the practice, writing, "For me personally, I believe paying the right amount of tax is a patriotic duty."

2. Why is the tax code so complicated?

"There are many examples of Congress caving to lobbyists and perpetuating industry- and/or company-specific tax breaks, ultimately at the expense of the American people," Gregory wrote, explaining that at the modern rate of expansion the tax code is being amended essentially on a daily basis.

3. Are the IRS and tax-preparing companies, such as H&R Block and Intuit, keeping the tax code complex to keep Americans reliant on tax preparation companies?

"I believe that the industry of tax preparers appreciates having a more complex tax code to keep them in business," Gregory said, but he added, "I don't believe the IRS wants a more complex tax code."

4. What about other tax models, like a flat tax, luxury tax or value-added tax (VAT)?

"The IRS has conducted research on all of these areas," Gregory wrote. "Flat tax: found to be politically unacceptable by Congress because it increased the tax rate for about 80% of Americans. VAT: found internationally to increase level of non-compliance by those who run cash businesses, causing rate of the tax to increase over time. Luxury taxation: any tax on any articles should be explored to determine the impact on the items being taxed and on those who are being taxed to insure unintended consequences are evaluated before implementation (and proper application)."

5. Do you believe that reptilians are in fact running the IRS?

"I have not had any experience with lizard people, but to be fair: I have spent limited time in Washington, DC," Gregory wrote.

6. If he were king for a day, how would Gregory fix the IRS?

Gregory said he would:

  • Simplify the internal revenue code - if you took 60 lines per page with no margins (that's a lot of lines) the code is 34.5 inches high. The regulations are 3.5 times larger. That's almost 13 feet high. Nobody can understand all of that. Congress has passed more than 4,000 code sections in the last 10 years - that's more than 1 code section per day. When I started, I could hold the internal revenue code and the regulations in my hand! - I've actually got them at home.
  • Address issues related to inversions and international tax
  • Fund the IRS properly - increase funding consistent with the recommendations of the non-partisan IRS oversight board (2.3 Billion!)

One of Gregory's most-repeated points on Reddit, as well as in his open letter, was that the IRS needs more money.

He claimed that budget cuts have kept the IRS from adopting modern technology and he said that focus on the ongoing scandal involving Lois Lerner is a "distraction and a sideshow."

Gregory accused Rep. Darrell Issa (R-CA), who has been leading the investigation of IRS misdoings, of playing politics with IRS funding, which led one Reddit user to offer a "summary" of Gregory's comments:

From what I've seen so far

  1. Lerner did nothing wrong
  2. Darrel Issa is the devil
  3. Throw more money at the IRS
  4. Lack of criminal charges proves everything was just peachy and not politically driven
  5. It's all congress' fault
  6. Patriots pay taxes
  7. The flat tax will let evil millionaires kill and eat babies

The IRS couldn't ask for a better 'leaker'

Other Reddit users agreed, with one complaining, "[Gregory] might as well have titled this AMA 'having left the IRS, I am free now to reveal the IRS would be perfect if Congress just paid us more.' I get that the IRS may be underfunded but this leaker might as well be an IRS lobbyist."

Follow Zach Noble (@thezachnoble) on Twitter

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