Whistleblower makes shocking IRS, insider trading allegations | Hacker News Reader

Whistleblower makes shocking IRS, insider trading allegations

nypost.com

72 pointsuptown19 comments

From TFA:

> “Back in 2003-5 a memo was created within the IRS noting who was permitted to participate in ‘insider trading’,” says this whistleblower. “The memo noted that all IRS employees in the executive branch and those one step below (territory managers, etc.) were permitted to participate.”

This is not who decides what is 'permitted', which is of course within the purview of the SEC. The piece states:

> Why didn’t I bring these allegations to the proper authorities to investigate? I did and was essentially told to get lost

No, the author went to the IRS Inspector General, which is very much not the SEC. The SEC has a very popular (oversubscribed) whistleblower program which awards millions to those who provide material information or tips relating to such cases.

This article is, ahem, not credible.

> This article is, ahem, not credible.

It isn't "credible" because you don't like that the Whistleblower reported it to their own agencies watchdog instead of another agency? I don't follow what that has to do with the article's credibility at all...

Per the article the “whistleblower” reported nothing at all to the authorities.

It isn't credible because the IRS IG has nothing to do with securities law and so they aren't the proper authorities. A simple read of their website shows it exclusively has to do with proper application of internal revenue code.

Fair enough. I don't put a lot of stock in the SEC anyway, a 'who watches the watchers' lack of ironclad faith in these regulatory agencies tends to afflict me. That said, all credit to them when they do enforce.

The New York Post always seems a little sketchy to me, based on the articles I've read and their trashy ads, but I'm not really sure if that's a valid conclusion or just a quick judgment.

My comment didn't mention the publication venue. Failure to understand that the SEC deals with insider trading is fatal to any credibility the author or the alleged whistleblower might have had about such an accusation.

Yes, sure... The most anti-tax journalist out there finds an anonymous "whistle blower" to tarnish the IRS reputation.

> Why didn’t I bring these allegations to the proper authorities to investigate? I did and was essentially told to get lost

Right...

I dislike knee-jerk media criticism on HN (or anywhere), but in this case the story is actually based on one anonymous source, whom the journalist has never met, and on nothing else. Quality journalists corroborate anonymous tips with multiple sources and documents. The journalist's own description of the evidence:

> Just so you know, I spoke with this whistleblower a couple times by phone and he sounds credible. Plus I was able to confirm that he was with the IRS, in the position he says, during the time this was alleged to be happening.

Also, the NY Post is partisan conservative (which is fine, but important context), part of Murdoch's News Corp last I knew, and a part of the conservative partisan agenda is to discredit the IRS.

All of that doesn't make it wrong, but doesn't make it credible IMHO. I'll wait to hear more.

EDIT: A few clarifications

One easy verification (that unsurprisingly, the NYPost skipped) was to either ask the whistle-blower to name an egregious cases, or to check if any member of Congress has had suspicious transactions prior to a merger. It feels like both the list of mergers and members of Congress are small enough for this to be doable.

Not the first time he's done something like this: https://archives.cjr.org/the_audit/bogus_new_york_post_story...

me too. the majority of pple sharing this on twitter are far-right accounts and the language is what you'd expect.

nypost hasn't exactly got a reputation for facts & credibility either:

>According to a survey conducted by Pace University in 2004, the Post was rated the least-credible major news outlet in New York, and the only news outlet to receive more responses calling it "not credible" than credible (44% not credible to 39% credible).

https://en.wikipedia.org/wiki/New_York_Post#Criticism

I was about the comment that a single New York Post article (this is not the Times!) is hardly a credible source. These guys are barely above the National Enquirer for fact checking.

Is there any detail offered on why the IRS (and not, e.g., the SEC or the FTC) would have advance knowledge of public company mergers? Typically, these are announced when the merger agreement is signed and then any required approvals are obtained before closing.

Tax filings are typically made after closing on the normal due dates.

I think this is what the article addresses here:

"There’s something you need to understand. The IRS places its workers permanently inside many companies where they continually receive privileged information while doing audits."

Interesting. Perhaps I'm being overly optimistic about companies' internal controls, but someone doing an audit should have access only to historical information.

During the Clinton administration, grace periods were changed to reflect improved technology for realtime accounting and payment.

The IRS now receives a considerable amount of realtime information and payments relating to large transactions.

It would be a bit strange to try to keep onsite IRS agents in the dark about something you will be reporting through the realtime system when the whole point is to avoid unfavorable costs of (accidentally?) owing the IRS a large sum for any amount of time.

The goal of embeddin the employees is to build relationships with the people working there. That's an obvious vector for non-public information to get disseminated informally.

I doubt they'd regularly be getting material information from which they could profit though

> There’s something you need to understand. The IRS places its workers permanently inside many companies where they continually receive privileged information while doing audits. So there’s plenty of money-making tips to go around.

They audit companies and auditors are told to pass along any information they find so IRS managers and friends can profit from it.

So then we have to ask how do they pick companies to audit? Would it be random if they could stand to enrich themselves.

Reply on news.ycombinator.com