The Internal Revenue Service has suspended at least eight workers in the Chicago area in a criminal investigation into bribery and other offenses, union officials and colleagues of the workers said.
The suspensions came after agents of the Treasury Department's inspector general for tax administration made predawn visits to the homes of at least five IRS employees on June 22, urging them to cooperate with the investigation, said Charlie Turek, president of the National Treasury Employees Union local in Chicago.
Turek and lawyers familiar with the case said a federal grand jury was expected to hand up indictments, in what would be the first major corruption case brought against a group of IRS workers since Congress passed the IRS Reform and Restructuring Act of 1998.
"I am sure the inspector general will indict as many as he can," Turek said.
David C. Williams, the inspector general, declined comment.
Those under investigation include an appeals officer, two tax collectors and an auditor.
In one case an IRS worker and a tax professional were taped discussing a $25,000 fee to fix a tax case, people who have heard the tape said.
One of the tax collectors was caught on tape agreeing to take money in return for reclassifying an overdue tax bill as currently not collectible.
While some of the taping was done by informers who agreed to wear recording devices after they were presented with evidence of their role in crimes, tape recorders were also placed at customer-service counters.
As many as eight IRS workers at four Chicago offices were suspended with pay three weeks ago and were told that they would be fired, colleagues said.
In addition to the workers' facing criminal charges, a number of IRS workers at four Chicago offices are expected to be disciplined for failing to report efforts to bribe them since the investigation began in 1998, colleagues and other people who are familiar with the case said.
The investigation also uncovered evidence that at least one IRS auditor had been paid to prepare tax returns, which were signed by one of the tax professionals. Federal rules prohibit IRS employees from preparing tax returns for pay.