Senator Moran: 'IRS Committed Felony'

With the NSA wiretapping scandal dominating media, the IRS targeting scandal has taken a back seat. However, Senator Jerry Moran (R-Kan.) is pursuing the issue with zeal.

According to Moran: two weeks before the scandal became public, he was questioning Treasury Secretary Jack Lew about the alleged targeting of conservative groups. Moran said that over the past year, the IRS has had a number of allegedly “inadvertent” releases of protected, confidential taxpayer information.

Most of these relate to the improper release of Schedule B of Form 990, which lists donors to nonprofit organizations. The IRS made these improper releases of information about nonprofit groups in response to information requests from other groups that subsequently used this information to attack the organizations and their donors.

Moran gave three particularly egregious examples:

-- Last April, the IRS improperly disclosed the Schedule B donor list on the Form 990 of the National Organization for Marriage, a 501(c)(4) organization that advocates for traditional marriage between a man and a woman. While the Form 990 is publicly available, tax law and IRS regulations make clear that the Schedule B donor list of the 990 is not to be released for (c)(3)s and (c)(4)s.

-- Last December, the IRS turned over to the group ProPublica several applications for non-profit status that included pending applications for tax-exempt status from a number of 501(c)(4)s . While applications for non-profit status are available to the public after an official exemption is granted, they are protected tax-return information while the application is pending.

A Moran staffer said this example is particularly damning, as it represents a felony:

"As we understand it, publishing unauthorized tax returns or return information is a felony punishable by up to five years in prison or a fine of up to $5,000, or both. Despite this, Pro Publica published information from these pending applications that it should never have received. Thus far, we have not been able to confirm that appropriate administrative or legal responses have been undertaken by the IRS and the Treasury."

-- Earlier this year, in another allegedly inadvertent disclosure, the IRS released to a group one page of the Schedule B showing donors to a 501 (c) (4) affiliated with the Republican Governors Association. Moran said that Lew told him at the hearing he had no idea about these allegations, but would get back to him with answers. To that end, Moran submitted a list of questions to Lew -- these questions have yet to be answered. The scandal became public two weeks later.

Moran said he is still waiting to hear who released the information, and what will be done with them:

Part of my inquiry to Secretary Lew was "have the employees who released this information, have they been challenged, have they been admonished, have they been treated appropriately for what clearly seems to be an inappropriate release of private taxpayer information?"

The information ended up in the hands of ProPublica. This organization then published this information despite what I understand to be a felony. Again, I'm not able to confirm that any action has been taken, any recommendation from the Treasury Department to the Justice Department that anybody be prosecuted.

Moran said the three instances cited above became all the more outrageous when the news surfaced that these were far from isolated instances:

These are alarming in and of themselves, and become more significant to me having learned that there is a bias, a different treatment of one taxpayer over another.

Moran also said -- on the floor of the Senate -- that whoever is responsible needs to be tracked down and prosecuted if it is ultimately determined a crime has been committed:

I also think it's important for us to pursue the issue of the release of information that comes from one organization's filing ... ultimately used by another organization that apparently has a different political perspective than the organization whose application is pending.

There is more to be discovered as we look at how this information was released: were people who released it punished? Is there any pending criminal action (pending against the leakers)?

Moran said he has serious concerns about the lack of progress on the part of the IRS, the Treasury Department, and the Justice Department in pursuing the apparent breakdown in taxpayer protection:

Tax return information should not be used for political gain, regardless of the political leanings of both the taxpayer and the tax administrator.