In 1924, Treasury Secretary Andrew Mellon, one of the country's wealthiest men, was feuding with Sen. James Couzens (R-Mich.), said to be the richest member of Congress. Couzens wound up being sued by the Bureau of Internal Revenue, precursor to the IRS, over a tax bill of between $10 million and $11 million on a sale of Ford Motor Co. (F) stock -- an amount approximately equivalent to $140 million today. The result was a power struggle between Congress and the administration of Calvin Coolidge, which led to the creation of the U.S. Joint Committee on Taxation. The Washington Post dubbed the affair "the greatest tax suit in the history of the world."
Photo: President Calvin Coolidge (Left) and Sen. James Couzens (right in glasses).
Worse than Watergate, but significantly less well-known, is a 15-year FBI program directed against domestic political groups deemed "subversive." It was called COINTELPRO, and the IRS was one of its tools of attack. Members of the New Left, black activists, antiwar figures and other dissidents were targeted for audits, and the IRS handed over 200 tax returns for investigatory purposes in a manner deemed illegal in 1968.