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Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, April 18, 2014

The IRS Scandal, Day 344

IRS Logo 2Above the Law:  Should ‘Campaign For Liberty’ Have Called Itself ‘Campaign For Progress’ Instead?:

Campaign for Liberty, Ron Paul’s 501(c)(4) organization, announced this week that it’s actually pretty sure that its tax recent filings are incomplete, even if true and correct. (Two out of three ain’t bad?) According to C4L, the organization refused to divulge the names of its donors when it filed its IRS 990 forms. The IRS fined Campaign for Liberty just shy of $13,000, plus growing interest for each day the fine goes unpaid. ...

Megan Stiles, the communications director at Campaign for Liberty, told the Washington Examiner in an email on Tuesday:  There is no legitimate reason for the IRS to know who donates to Campaign for Liberty. The IRS technically requires donor information from 501(c)(4) organizations and is forbidden by law from releasing it to the public, yet despite this they have ‘mistakenly’ released the information repeatedly over the years. Often these leaks have been made to political opponents of the conservative groups whose information was leaked. Leaking the donor information is intended to harass and to intimidate those donors from donating to political causes. Campaign for Liberty has refused to provide donor information to the IRS to protect the privacy of our members. Now the IRS has demanded the information and fined Campaign for Liberty for protecting its members’ privacy. ...

[C]an you blame them for being skeptical of how the IRS will treat them and their donors? It’s been a year since the Treasury Inspector General for Tax Administration conceded that the IRS used “inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based on their names or policy positions instead of indications of potential political campaign intervention.” President Obama himself has in the past used donor lists to publicly chastise private citizens who oppose him politically.

The investigation by the House Oversight and Government Reform Committee crawls along with all the deliberate speed of a patient on Seconal. However, Judicial Watch released yesterday a new batch of internal IRS emails showing that former IRS official Lois Lerner communicated with the Department of Justice on strategies for targeting 501(c)(4) groups. Even as Lerner broke the news of the IRS scandal by blaming “low-level” employees in Cincinnati, Lerner was still consulting with the DOJ about how the targeted organizations could be prosecuted. There’s mounting evidence to support conservative concerns about the political nature of the IRS.

In November, the IRS proposed changes to the rules governing 501(c)(4) organizations. The changes would constrict the political activity of groups claiming this tax-exempt status and require them to disclose their donors. The proposal elicited a record-breaking 169,000 public comments. IRS Commissioner John Koskinen told USA Today on Monday that, given the extraordinary number of comments, “In all likelihood we will re-propose a redefined rule and ask for more public comment.” He predicted that the process would not be complete “until the end of the year and beyond.”

Conservatives like Senate Minority Leader Mitch McConnell (R-Ky.) have opposed these changes, unsurprisingly. However, even the ACLU has criticized the proposed rules as unduly burdensome on First Amendment rights. It’s not only conservatives who should be wary about not only what the IRS has done in the past, but also what it aims to do in the future.

Can you blame Campaign for Liberty for not wanting to expose its private-citizen donors to retribution, even if that means disregarding IRS demands? Perhaps we should just ask former Mozilla CEO Brendan Eichwhat the consequences of disclosure might be.

IRS News, IRS Scandal, Tax | Permalink


Can these folks be any more ignorant or naive? How do they think criminal cases happen--do they think cases descend from the clouds, wrapped in a bow? The DOJ-Lerner emails suggest the departments may have been covering their backs after getting some congressional pressure. Sen. Whitehouse (D-R.I), a prominent campaign finance reformer, wanted to know why the IRS had not referred any suspect (c)(4)s to DOJ for prosecution. He used his time during an April 9, 2013, hearing to press DOJ on the matter. Congressmen and senators ask executive departments for answers. The executive departments try to answer the questions (or get held in contempt!). When the executive departments talk to each other to put the answers together, this is evidence of illegal targeting. It also bears saying that Lerner’s email exchanges within her division indicate she did not think such prosecutions would be viable.

Posted by: Publius Novus | Apr 18, 2014 7:00:36 AM

RE: Publius Novus
As a former IRS Revenue Officer I can assure that is not the way it works. If you discover suspected criminal actions the case is referred to Area Counsel. If they agree then the case goes to CID. If they agree then, and only then, does CID contact DOJ to build the case. You don't pick up the phone or email your buddy at DOJ. Unless of course you are exempt/ politically protected from 6103.

Posted by: An ex RO | Apr 18, 2014 5:25:30 PM

Thank you for the correction "Ex RO," but just ignore Publius Novus, as at this point it is pretty obvious he works for the DNC or some related Soros organization. All he does is come here and try to spin every IRS story, or change the subject. If you skim through prior threads you will notice he never addresses anyone who corrects him or points out gaping holes in his logic.

Posted by: Todd | Apr 19, 2014 6:48:21 AM