The IRS scandal has been smoldering for over two years now, and despite multiple congressional hearings, and a DOJ investigation, the smoke has not yet led to a five alarm fire.
Recent IRS documents obtained by Judicial Watch may provide the spark that sets the scandal ablaze. The IRS records confirm that the IRS used donor lists to tax-exempt organizations to target those donors for audits.
The documents also show IRS officials specifically highlighted how the U.S. Chamber of Commerce may come under “high scrutiny” from the IRS. The IRS produced the records in a Freedom of Information lawsuit seeking documents about selection of individuals for audit-based application information on donor lists submitted by Tea Party and other 501(c)(4) tax-exempt organizations (Judicial Watch v. Internal Revenue Service (No. 1:15-cv-00220)).
A letter dated September 28, 2010, then-Democrat Senate Finance Committee Chairman Max Baucus (D-MT) informs then-IRS Commissioner Douglas Shulman: “ I request that you and your agency survey major 501(c)(4), (c)(5) and (c)(6) organizations …” In reply, in a letter dated February 17, 2011, Shulman writes: “In the work plan of the Exempt Organizations Division, we announced that beginning in FY2011, we are increasing our focus on section 501(c)(4), (5) and (6) organizations.”
In 2010, after receiving Baucus’s letter, the IRS considered the issue of auditing donors to 501(c)(4) organizations, alleging that a 35 percent gift tax would be due on donations in excess of $13,000. The documents show that the IRS wanted to cross-check donor lists from 501(c)(4) organizations against gift tax filings and commence audits against taxpayers based on this information.
A gift tax on contributions to 501(c)(4)’s was considered by most to be a dead letter since the IRS had never enforced the rule after the Supreme Court ruled that such taxes violated the First Amendment. The documents show that the IRS had not enforced the gift tax since 1982.
But then, in February 2011, at least five donors of an unnamed organization were audited.
The documents show that Crossroads GPS, associated with Republican Karl Rove, was specifically referenced by IRS officials in the context of applying the gift tax. Seemingly in response to the Crossroads focus, on April 20, IRS attorney Lorraine Gardner emails a 501(c)(4) donor list to former Branch Chief in the IRS’ Office of the Chief Counsel James Hogan. Later, this information is apparently shared with IRS Estate Gift and Policy Manager Lisa Piehl while Gardner seeks “information about any of the donors.”
Emails to and from Lorraine Gardner also suggested bias against the U.S. Chamber of Commerce. An IRS official (whose name is redacted) emails Gardner on May 13, 2011, a blog post responding to the IRS targeting of political and other activities of 501(c)(4), (5) and (6) organizations:
The U.S. Chamber of Commerce is a 501(c)(6) organization and may find itself under high scrutiny. One can only hope.
Judicial Watch President Tom Fitton issued the following statement, “These documents that we had to force out of the IRS prove that the agency used donor lists to audit supporters of organizations engaged in First Amendment-protected lawful political speech. And the snarky comments about the U.S. Chamber of Commerce and the obsession with Karl Rove’s Crossroads GPS show that the IRS was targeting critics of the Obama administration. President Obama may want to continue to lie about his IRS scandal. These documents tell the truth – his IRS hated conservatives and was willing to illegally tax and audit citizens to shut down opposition to Barack Obama’s policies and reelection.”
Jay Sekulow of the American Center for Law and Justice spoke with Neil Cavuto this afternoon to discuss the president’s recent comments on “The Daily Show” regarding the IRS scandal. Obama blamed the scandal on a “crummy law” that, as Sekulow pointed out, has been in place since 1954.
“It wasn’t such a bad law when all the left-wing groups got their tax exemptions,” he noted.
President Nixon’s infamous “enemies list” was given to the IRS to “use the available federal machinery to screw our political enemies,” according to White House counsel John Dean. Interestingly enough, the IRS at the time refused do it.
But the exposure of Nixon’s IRS abuses during congressional hearings in 1973 and 1974 led to the second article of his 1974 impeachment in which he was charged with attempting to obtain from the IRS “confidential information contained in income tax returns for purposes not authorized by law, and to cause, in violation of the constitutional rights of citizens, income tax audits or other income tax investigations to be initiated or conducted in a discriminatory manner.”
Sound like anyone we know?
UPDATE:
Fox News Business is on the story: IRS Targeted Mainstream Conservatives
Fox News’ Gerri Willis noted on the air this evening that “according to these documents – and this is new tonight – this was coming out of Washington. This wasn’t coming out of Cincinnati. This was coming out of Washington.”
http://www.youtube.com/watch?v=Dk-Ds8NOyZ8
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