Carolyn Schenck

Carolyn Schenck is the former Internal Revenue Service lawyer interviewed in The leaked tapes that show how the rich avoid taxes. The episode uses her account to explain how the IRS learned about the Malta Tax Loophole, evaluated it under Economic Substance Doctrine, and tried to move from public warning to disclosure and enforcement.

Her role is practical rather than abstract. Schenck describes investigative tools, practitioner intelligence, the 2021 Dirty Dozen warning, late-2021 treaty clarification with Malta, and later summons and disclosure-rule work. She also becomes the source’s witness for Tax Enforcement Capacity risk after the proposed rule stalls and she leaves the IRS during staff reductions.

Source Position

• Schenck treats the Malta strategy as lacking an economic purpose beyond tax avoidance.
• She frames the Dirty Dozen listing as a warning to promoters and taxpayers.
• She views the stalled disclosure regulation as a missed opportunity to protect public revenue and taxpayers from aggressive shelter advice.

Connections

• Internal Revenue Service — institution where she worked.
• Malta Tax Loophole, Economic Substance Doctrine, and Tax Shelter Disclosure Regulation — enforcement issues she explains.
• Tax Enforcement Capacity — broader capacity problem her account illustrates.
• Lauren Loricchio and Tax Notes — reporting branch that surfaces the leaked calls around the same case.