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Baltimore City Council President Brandon Scott wants the police department to provide any information it has on requests by the Internal Revenue Service to force minimum tax withholding amounts on some officers, in light of allegations of tax fraud levied by a federal prosecutor.
Baltimore City Council President Brandon Scott wants the police department to provide any information it has on requests by the Internal Revenue Service to force minimum tax withholding amounts on some officers, in light of allegations of tax fraud levied by a federal prosecutor. (Karl Merton Ferron / Baltimore Sun)

Members of the Baltimore City Council sent a letter Monday to Police Commissioner Michael Harrison asking how his department handles Internal Revenue Service inquiries about the tax withholdings of its employees, given recent concerns about fraud voiced by federal prosecutors.

The letter from Baltimore City Council President Brandon Scott and Councilman Kristerfer Burnett, chair of the legislative investigations committee, specifically asked about “lock-in letters,” or a form of correspondence the IRS can send to an employer instructing it to withhold taxes from an employee’s pay at a specific rate — disregarding deductions the employee may have claimed on his or her tax forms.

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Their inquiry follows the federal conviction last year of former Commissioner Darryl De Sousa on tax fraud charges, as well as additional claims of suspect tax filings made in the case against the corrupt Gun Trace Task Force, a squad of detectives who were all convicted on charges ranging from drug dealing to robbery and overtime fraud.

In a stipulation of facts filed along with De Sousa’s guilty plea, federal prosecutors noted that nearly four years prior, in 2015, the IRS had sent De Sousa and the police department a “lock-in letter” that said De Sousa was not entitled to the withholdings he was claiming, and instructing the department not to honor them.

In federal court, Assistant U.S. Attorney Leo Wise said the IRS and FBI learned, while investigating De Sousa and the gun task force, "that other BPD officers engaged in similar conduct.” In a filing in the case, prosecutors wrote that the "practice of taking fraudulent deductions was information that was shared among officers.”

De Sousa ultimately admitted to deliberately claiming tax deductions for a house he didn’t have, a business he didn’t run and work expenses he never incurred, and pleaded guilty to three counts of failing to file federal tax returns. In March, U.S. District Judge Catherine Blake sentenced him to 10 months in federal prison, saying she wanted to deter other tax-cheating cops.

“This is a sad day for you. It’s also a sad day for our city,” Blake told De Sousa. “This city needs a police force it can trust.”

De Sousa has not responded to requests for comment from behind bars.

Eric Melancon, Harrison’s chief of staff, said Monday that the department facilitates IRS requests “through central payroll,” and will be “working with city finance to get the information to answer these questions.”

For months, The Baltimore Sun has been requesting information from city officials on the prosecutors’ claims of wider-spread tax fraud within the police department, and what the city and the department were doing to address them. The Sun filed multiple requests under the Maryland Public Information Act to the city’s finance and legal departments, and to the office of Maryland Comptroller Peter Franchot, for records pertaining to the receipt of lock-in letters. The newspaper also asked about any plans officials had to address the concerns of the federal prosecutors.

All of those requests for documents were denied. And the requests for additional information as to the response by the city or the state were met with silence — until Monday.

Scott said the charges against De Sousa had been cause for concern last year, and that The Sun’s additional inquiries had caused him to revisit the matter more recently.

“It was a concern following the incidents of last year, but once we learned of further requests and things like that, it brought it back to the forefront and we decided to take some action on it,” he said.

In their letter to Harrison, he and Burnett asked the commissioner to quantify the number of lock-in letters received and “processed” by the department in the last five years; whether and how the department assists employees who receive such letters; and what actions the department takes when it receives them.

“It is our understanding that the process required by the IRS to ensure proper tax withholding is unyielding and potentially severe,” they wrote in their letter to Harrison. “The improper handling of this type of demand may cause an employee to experience financial distress unless there is immediate and sufficient attention made by the employer to review the matter and provide assistance.”

Scott said his letter to Harrison was “all about accountability" for a troubled police department, at a time when residents are skeptical that city officials are paying their fair share in taxes. Last year, former Mayor Catherine Pugh also pleaded guilty to tax evasion charges related to the sales of her “Healthy Holly” children’s books.

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“We need to know how they are handling these issues and whether they are doing their due diligence in looking into it,” Scott said of the police department. “But it’s the beginning. We may learn that we’re going to have to look at other agencies.”

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