This is really really disturbing. It seems to reveal a side of the IRS that I never knew existed. According to the NYT's Joe Nocera, an IRS investigator basically stalked ultra-marathoner Charlie Engle because he wondered about how he supported his lifestyle.

The film, “Running the Sahara,” was released in the fall of 2008. Eventually, it caught the attention of Robert W. Nordlander, a special agent for the Internal Revenue Service. As Mr. Nordlander later told the grand jury, “Being the special agent that I am, I was wondering, how does a guy train for this because most people have to work from nine to five and it’s very difficult to train for this part-time.” (He also told the grand jurors that sometimes, when he sees somebody driving a Ferrari, he’ll check to see if they make enough money to afford it. When I called Mr. Nordlander and others at the I.R.S. to ask whether this was an appropriate way to choose subjects for criminal tax investigations, my questions were met with a stone wall of silence.)

I always assumed you weren't investigated by the IRS unless they had some prima facie evidence of wrongdoing or you were subject to a broad and impersonal audit dragnet. Turned out that like millions of others Engle lied on a mortgage application during the housing bubble.
UPDATE: As his dad, Rich, points out and Nocera's article makes clear, there is a good case to be made that Charlie Engle didn't lie about his income on his loan applications. So he may be in jail for nothing.

In March 2009, still unsatisfied, Mr. Nordlander persuaded his superiors to send an attractive female undercover agent, Ellen Burrows, to meet Mr. Engle and see if she could get him to say something incriminating. In the course of several flirtatious encounters, she asked him about his investments.

After acknowledging that he had been speculating in real estate during the bubble to help support his running, he said, according to Mr. Nordlander’s grand jury testimony, “I had a couple of good liar loans out there, you know, which my mortgage broker didn’t mind writing down, you know, that I was making four hundred thousand grand a year when he knew I wasn’t.”

Mr. Engle added, “Everybody was doing it because it was simply the way it was done. That doesn’t make me proud of the fact that I am at least a small part of the problem.”

The woman was wearing a wire, and now Engle is in jail. (Check out his blog here.) Amazing. I had no idea IRS operatives could tape you sureptitiously. I thought only criminal investigation wings of the Justice Department or state and local police could do that. No excuse for Engle to have lied to his lender, but the way he got nailed is quite scary.