IRS Prosecutor Statement

Ms. Murphy is now an associate professor at Gonzaga University in Spokane, WA

Editor's Note, added 26Aug2005 : In its August 29, 2005 issue, US News & World Report ranked GU as #4 among all universities offering Master's programs in the western United States. Trinity University (TX) was #1, followed by Santa Clara and Loyola, respectively. GU beat such contenders as Cal Poly, Seattle University, and St Mary's College.

After 15 years with the IRS, Ms. Murphy resigned because of the agency's inexcusable behavior toward the Hoyt investors. She had this to say about the situation:

One arm of the government says these people were defrauded, and the IRS says they weren't.

After Hoyt was convicted, I told my boss what we're doing doesn't make sense. He told me flat out, and this is a quote, "We are going to show them we mean business." I got the feeling the attitude was, "Let's hit them with everything, because we can."

I felt my ethics were at stake. I told my boss, and he went through the roof. By saying I couldn't ethically continue with the case, I guess he thought I was implying something about his ethics. At that point I knew I should find something else to do."

"I think the IRS didn't want to treat these people different from anyone else,'' Ms. Murphy said. ''But these were not your typical, slicked-back tax-shelter investors looking to slip one by the government. These were mostly blue-collar workers trying to turn a legitimate profit.

If anyone should have wanted to go hard on these people, it would be me. I was trying the case. But most of us who were actually involved--field agents, attorneys--I'd say about 80 percent of us wanted to go easy on the investors. We saw them as victims."

Ms. Murphy's disgust grew when Kevin Brown, a high-ranking manager at the IRS national office, started micro-managing the Hoyt case. Ms. Murphy said she couldn't even post a letter without consulting Washington. 

The IRS has already spent several times more money beating down the Hoyt investors than it can possibly collect from them. One has to wonder why the  IRS continues to use strong-arm tactics, perjury, and harassment rather than try to resolve these issues intelligently. The harassment includes midnight phone calls, armed IRS agents visiting investor homes "coincidentally" when relatives are visiting from out of town, and stomach-churning letters sent to investors just before the holidays.

As we've stated, this is not a tax issue. The IRS is merely disguising it as one, and wasting untold resources rather than doing the job Congress pays them to do.