Sanborn incident

William Adams Richardson, President Ulysses S. Grant's Secretary of the Treasury, hired a private citizen, John B. Sanborn, a former Union General, to collect $427,000 in unpaid taxes.

After an investigation by the Treasury Department discovered corruption, President Grant signed legislation making the practice illegal.

In 1872 lawmakers allowed the Bureau of Internal Revenue (BIR) to hire private citizens to assist the Government to discover and collect any money belonging to the United States.

Private collectors were required, by law, to furnish details about each collection, such as, nature of the debt and the evidence used to support accusations.

Sanborn's defense was that he was under contract from the government due to a rider in an 1872 appropriations bill created by congressman William H. Kelsey.

This bill allowed the Secretary of the Treasury to hire three persons to "discover and collect" unknown taxes to the United States government.

[2] Previously, acting Treasury Secretary William Adams Richardson, hired Sanborn as an independent tax collector on a 50 percent commission basis, known as a moiety.