- IRS Documents Show How the Renegade Tax Agency Used Donor Lists To Steer Audits
- Federal Judge Says State Department Must "Answer For" Destruction of Clinton Emails
- Judicial Watch Client McCann Testifies To Congress on Deadly Sanctuary Policies
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Judicial Watch has released more blockbuster documents
from the Internal Revenue Service (IRS) that confirm that the IRS used
donor lists of tax-exempt organizations to target those donors for
audits. The documents also show that IRS officials specifically
highlighted how the U.S. Chamber of Commerce may come under "high
scrutiny" from the IRS. We forced these records out through a Freedom of Information lawsuit
seeking documents about the selection of individuals and organizations
for audits, based application information and donor lists submitted by
Tea Party and other 501(c)(4) tax-exempt organizations.
In 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."
Sure enough, in 2010, after receiving Baucus' 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. 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."
One
of the most disturbing bits of information pulled from the documents
concerns the U.S. Chamber of Commerce, which sometimes works to support
the free-enterprise system in the face of heavy-handed regulatory
policies.
Emails to and from Lorraine Gardner point to a bias against the Chamber. An IRS official (whose name is redacted) emails Gardner on May 13, 2011,
a leftist 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."
The
subject line of the email highlights this anti-Chamber of Commerce
comment: "we are making headlines notice the end regarding 501(c)(6)
applicability enjoy." This critical comment is forwarded to other IRS
officials and shows up attached to another Gardner IRS email chain with the subject line "re: 501(c)(4)" that discusses a pending decision about a tax-exempt entity.
In early May, once the media began reporting on the IRS audits of donors, IRS officials reacted quickly. One official acknowledges the issue "is a biggy" when a reporter from The New York Times contacts the IRS on May 9.
On
May 13, 2011, former IRS Director of Legislative Affairs Floyd Williams
discusses compliance with "interest" from Capitol Hill: "Not
surprisingly, interest on the hill is picking up on this issue ... with
Majority Leader Reid's office, has suggested the possibility of a
briefing for the Senate Finance Committee staff on general issues
related to section 501(c)(4) organizations. I think we should do it as
interest is likely to grow as we get closer to elections."
Later that day, then-Director of the Exempt Organizations Lois Lerner weighs in with an email
that confirms that she supported the gift tax audits. Lerner
acknowledges that "the courts have said specifically that contributions
to 527 political organizations are not subject to the gift
tax-nothing that I'm aware of that about contributions to organizations
that are not political organizations." Section 501(c)(4) organizations
are not "political organizations." [Emphasis in original]
Lerner's involvement and support for the new gift tax contradicts the IRS statement
to the media at the time that audits were not part of a "broader effort
looking at donations 501(c)(4)'s." In July 2011, the IRS retreated
after a public uproar and soon-to-be Acting IRS Commissioner Steven Miller directed
that "examination resources should not be expended on this issue" and
that all audits of taxpayers "relating to the application of gift taxes"
to 501(c)(4) organizations "should be closed."
By the way, we had filed a separate lawsuit
for records about targeting of individuals for audit in November 2013.
In that litigation, the IRS had refused to search any email systems,
including Lerner's records. A federal court ruled the IRS' search was
sufficient and dismissed the lawsuit earlier this month. So it took another lawsuit to get this new info from the IRS!
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 continues to lie about his IRS scandal. He told a comedian
the other day that "there was not some big conspiracy there." Obama
also said, "Congress had passed a crummy law that didn't give people
guidance in terms of what it was they were trying to do. They did it
poorly and stupidly."
How does he know all this? The Department of Justice and the FBI supposedly are still conducting a criminal investigation.
The
Treasury for Inspector General for Tax Administration (TIGTA) report
exposing the scandal made no mention of "crummy laws" passed by
Congress. Its audit
revealed the IRS had used "inappropriate criteria" to identify
potential political cases. "Early in Calendar Year 2010," TIGTA wrote,
"the IRS began using inappropriate criteria to identify organizations
applying for tax-exempt status to (e.g., lists of past and future
donors)." The illegal IRS reviews continued for more than 18 months
and, TIGTA reported, "delayed processing of targeted groups'
applications preparing for the 2012 presidential election."
And
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.
Obama's
IRS falsehood the other day contained an admission that few picked up
on. He said, "You don't want all this money pouring through
non-for-profits but you also want to make sure that everybody is getting
treated fairly." Who doesn't "want all this money pouring through
non-for-profits"? Barack Obama. There is no law prohibiting money
"flowing through non-profits." But he didn't like the idea of this
money being used against his reelection or his policies. So his IRS
targeted these groups and their donors for lawless oppression.
This president and his administration are out of control.
In September 2014, another Judicial Watch FOIA lawsuit forced the release of documents
detailing that the IRS sought, obtained and maintained the names of
donors to Tea Party and other conservative groups. IRS officials
acknowledged in these documents that "such information was not needed."
The documents also show that the donor names were being used for a
"secret research project."
Let's review some of the facts Obama chose to ignore.
The House Ways and Means Committee announced at a May 7, 2014, hearing
that, after scores of conservative groups provided donor information
"to the IRS, nearly one in ten donors were subject to audit." In 2011,
as many as five donors to the conservative 501(c)(4) organization Freedom's Watch were audited, according to the Wall Street Journal. Bradley Blakeman, Freedom's Watch's former president, also alleges he was "personally targeted" by the IRS.
There's more.
In February 2014, then-Chairman of the Ways and Means Committee Dave Camp (R-MI) detailed improper IRS targeting of existing conservative groups:
Additionally,
we now know that the IRS targeted not only right-leaning applicants,
but also right-leaning groups that were already operating as
501(c)(4)s. At Washington, DC's direction, dozens of groups operating
as 501(c)(4)s were flagged for IRS surveillance, including monitoring of
the groups' activities, websites and any other publicly available
information. Of these groups, 83 percent were right-leaning. And of
the groups the IRS selected for audit, 100 percent were right-leaning.
Maybe
President Obama can fool a comedian about the IRS scandal, but he isn't
fooling Judicial Watch as we battle his Justice Department and IRS
lawyers successfully in court to hold him accountable for his
worse-than-Nixon abuse of the IRS.
There
is a legal reckoning coming for Hillary Clinton's notorious email
practices and policies. There is too much Judicial Watch legal pressure
and too many federal court judges for the Obama administration and the
Clinton gang forever to avoid the legal consequences of their email
shenanigans. For instance, we are pleased to report that a federal
judge has said that the State Department will "have to answer for" any
destruction of Hillary Clinton's email records.
U. S. District Court Judge Rudolph Contreras made the statement at a July 9, 2015, status conference concerning a Judicial Watch Freedom of Information Act lawsuit
for records about the State Department's vetting of then-Secretary of
State Hillary Clinton's potential conflicts of interest. The transcript
of the July 9 court hearing is available here.
Recall that it was only four months ago, on March 2, 2015, that The New York Times reported then-Secretary Clinton used at least one non-"state.gov"
email account to conduct official government business during her entire
tenure as the secretary of state. It also was reported that Secretary
Clinton stored these records on a non-U.S. government server at her home
in Chappaqua, New York.
There
are nearly 20 federal lawsuits that touch on Mrs. Clinton and her
staff's use of secret email accounts to conduct official government
business. In our various FOIA lawsuits, our lawyers have informed
attorneys for the Obama administration that Hillary Clinton's account
and any other secret accounts used by State employees should be secured,
recovered and searched.
During
this particular court hearing, Judicial Watch attorney Chris Fedeli
raised the concerns JW had about the preservation of records, especially
email records that were not part of the 55,000 records Clinton turned
over to the State Department last year. Apparently, Fedeli struck the
right note.
In response, Judge Contreras said he was also "concerned" about the preservation of these records:
If documents are destroyed between now and August 17,
the government will have to answer for that, and, you know, if they
don't want to do anything out of the ordinary to preserve between now
and then, they can make that choice. I will allow them to make that
choice, but they will answer for it, if something happens.
After
a Justice Department lawyer attempted to assure him that the
administration was asking for government records from former State
Department employees, Judge Contreras questioned the State Department's
position that it had no legal obligation to take additional steps to
obtain other government records in the custody of Mrs. Clinton and other
former officials who used her special email system:
[I]t
is to state the obvious that this is not an ordinary case, and everyone
should be working to make sure that whatever documents exist today
remain in existence.
Judge
Contreras also voiced concerns regarding the State Department's refusal
to provide any information about the Clinton email issue:
But
I am a little bit mystified that the government is not more forthcoming
in just answering questions that will help this case proceed on a
systematic basis, and on a basis that will allow everyone to get the
answers that will eventually help resolve these cases...
This
one court hearing shows that Hillary Clinton and her co-conspirators in
the State Department will have to account for each and every email on
Hillary Clinton's notorious email system. That's encouraging. It's
become clear now to the public at large that Hillary Clinton has been
telling fairy tales about the missing emails that are beginning to
unravel. "Nothing Mrs. Clinton has said so far on the subject is
correct," The Wall Street Journal's Kimberly Strassel has charitably observed.
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