Lois Lerner, the former chief of the IRS Exempt Organization unit and the figure at the center of the targeting scandal, likely broke the law when she transferred 1.25 million pages of tax-return info to the Justice Department in October of 2010. The transfer was made in advance of a meeting between the IRS and Justice officials in which the prosecution of non-profit groups who Lerner believed were engaging in political activity was discussed.
Included in the transfer were the names of donors to the non-profit groups, as well as their tax returns. As Eliana Johnson of NRO writes, the transfer was in gross violation of IRS privacy laws.
Federal law prohibits the IRS from sharing tax returns filed with the agency, with very limited exceptions. “The IRS has a special obligation to keep information confidential, that’s how our tax system works,” says Eileen O’Connor, who served as assistant attorney general for the tax division of the DOJ in the George W. Bush administration.
Documents suggest that Lerner’s massive document transfer to the DOJ didn’t meet any of those exceptions, including one that allows the agency to disclose returns for use in criminal investigations — if they’ve been requested in relation to “an actual investigation about a person to whom the investigation is related,” says O’Connor. Both Lerner and the DOJ were interested in figuring out how to prosecute non-profit groups they believed were engaging in improper political activity, and Lerner sent the documents over to the department days before an October 8 meeting with several of her IRS colleagues, an FBI agent, and attorneys from the DOJ’s public-integrity section. There they discussed their mounting “concern that certain 501(c) organizations are actually political committees ‘posing’ as if they are not subject to FEC law, and therefore may be subject to criminal liability,” according to a DOJ summary of the meeting.
A lawful transfer of the documents would have required a formal request from the DOJ to the IRS, but DOJ trial attorney Stephanie Sasarak told Cause of Action in a March 9, 2016, letter that the department did not make any requests to the IRS for the documents it received. Alternatively, the secretary of the Treasury could have turned the documents over to the DOJ. In either case, section 6103 requires the Treasury secretary to disclose the transfer to the bipartisan Joint Committee on Taxation, which releases publicly a list of disclosures each year. But the Joint Committee on Taxation’s 2010 disclosure report does not show a transfer to the Department of Justice that matches the one Lerner sent in October of that year.
In October of 2015, the Justice Department closed its investigation into IRS targeting of conservative groups without indicting anyone.
The timing of the document transfer and the DoJ-IRS meeting is significant. The Democrats had made the Citizens United case a campaign issue and Lerner, a former FEC commissioner, wanted to help the Justice Department put a stop to the unlimited campaign contributions:
Lerner’s disclosure occurred against the backdrop of the Supreme Court’s January 2010 Citizens United decision, which allowed issue-oriented social-welfare groups to pour unlimited money into the political process and keep their donors anonymous. She shared the documents to aid the DOJ’s preliminary attempts to re-criminalize this activity. DOJ concern about the “misuse of non-profits for indirectly funding campaigns” prompted the meeting between IRS and DOJ officials.
The Nixon White House targeted opponents and “enemies,” using the IRS for audits and other forms of harassment. But that was just a couple of dozen people. Lerner’s dragnet swept up thousands of innocent non-profits in an effort to intimidate them into silence going into the election.
Lerner is now enjoying her retirement and government pension despite committing the most egregious invasion of privacy by the IRS in history.