TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Friday, December 2, 2016

The IRS Scandal, Day 1303:  Group Sues IRS For Failure To Produce Communications With Joint Committee on Taxation

IRS Logo 2Press Release, CoA Institute Sues IRS for Improperly Shielding Records:

Cause of Action Institute (CoA Institute) today filed a lawsuit against the IRS after the agency refused to produce records under the Freedom of Information Act (FOIA) relating to its dealings with Congress’s Joint Committee on Taxation (JCT).

In December 2015, the IRS Office of Chief Counsel issued new guidance claiming that nearly all IRS records relating to the JCT should be treated as “congressional records” and therefore shielded from public disclosure under FOIA. This revised guidance contradicts long-standing precedent for what records government agencies must provide in response to FOIA requests.

CoA Institute Vice President John Vecchione: “The IRS continues to withhold agency records that the American people have a right to see. Agency records, including communications with Congress, are subject to FOIA. But the IRS is now attempting to change the rules and withhold all of its communications with, and other records relating to, the JCT. Our lawsuit challenges what appears to be a ploy by the IRS to avoid transparency.”

For months, CoA Institute has sought IRS communications with JCT and other JCT-related records, including those that reflect internal deliberations concerning the agency’s dealings with the JCT.  By definition, these are agency records, as they would necessarily have been received or created by the IRS and are currently in the possession of the agency.  Such records would have been used by IRS employees and uploaded or stored into IRS recordkeeping systems, including e-mail or correspondence

On November 22, 2016, in response to CoA Institute’s administrative appeal, the IRS re-affirmed its conclusion that the requested records were not subject to FOIA and went a step further to describe CoA Institute’s FOIA requests as “too broad and too nebulous.” The Department of Justice has explained, however, that “[t]he sheer size or burdensomeness of a FOIA request, in and of itself, does not entitle an agency to deny that request on the ground that it does not ‘reasonably describe’ records.” The IRS never indicated that it was unable to locate records responsive to CoA Institute’s FOIA requests, nor did it suggest it required a narrowed scope or clarification as to the records sought.

CoA Institute’s lawsuit seeks to prevent the IRS from improperly shielding agency records from disclosure under FOIA.

The lawsuit can be found here.

Exhibits can be found here.

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December 2, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, December 1, 2016

The IRS Scandal, Day 1302:  The 'Corrupt' IRS Is Still Persecuting The Tea Party

IRS Logo 2WND, 'Corrupt' IRS Still Persecuting Tea Party:

A “corrupt” Internal Revenue Service still is shooting down advocates for conservative causes, especially if they have the words “tea party” in their names, even though courts have told the bureaucrats to stop.

Jay Sekulow of the American Center for Law and Justice said three non-profits that had applied for tax-exempt status years ago at a time when the agency, under the Obama administration, was selectively targeting and discriminating against conservative groups, recently received letters from the IRS regarding their requests.

Two of the organizations were denied tax-exempt status.

“It is clear that we still have an IRS that is corrupt and incapable of self-correction,” Sekulow said. ... “As we continue our fight at the ACLJ against the lawless, unconstitutional Obama administration’s IRS targeting of grassroots conservatives, we are achieving important victories,” Sekulow said. “But the fight also continues in federal court to ensure justice for all 38 of our clients from 22 states across the country. We must not stop fighting the IRS corruption until there is true justice and assurances that no American will ever be targeted by the IRS for his or her beliefs ever again.

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December 1, 2016 in IRS News, IRS Scandal | Permalink | Comments (2)

Wednesday, November 30, 2016

The IRS Scandal, Day 1301:  If Koskinen Is Impeached Or Fired, Trump Could Appoint New IRS Commissioner To Go Easy On His Taxes

IRS Logo 2USA Today, Trump Faces Potential Decision on IRS:

President-elect Donald Trump could face a decision that may affect whether his tax returns will continue to be audited throughout his four-year term of office.

IRS regulations call for annual audits of tax returns filed by U.S. presidents and vice presidents. But those rules, in place roughly 40 years, theoretically could be changed by the tax agency — whose current leader is under fire from Capitol Hill. ...

Trump has not publicly discussed future leadership for the IRS, which is part of the Department of the Treasury. ... Current IRS Commissioner John Koskinen, serving a five-year term that's set to end in November 2017, has been under pressure from congressional Republicans angered by what they contend was the tax agency's politically motivated delays of applications for non-profit status submitted by conservative Tea Party organizations. They say Koskinen misled Congress and obstructed committees that investigated the issue, allegations he has denied. ...

House Republicans started the process of initiating impeachment proceedings against Koskinen with a Judiciary Committee hearing in September. But no votes were held during the session. If he leaves through impeachment or resignation after Trump takes office, Trump would nominate a successor, subject to Senate confirmation.

"I serve at the pleasure of the President and a new President can always ask me to step aside sooner," Koskinen said in part of a statement prepared for a House hearing in July.

IRS commissioners haven't always stepped down for a new White House administration. Shirley Peterson, appointed in 1992 by President George H.W. Bush, officially left as of January 1993, as Bill Clinton took office. But Charles Rossotti, appointed by Clinton in 1997, stayed on for the opening two years of President George W. Bush's first term following enactment of the law that established five-year terms for IRS commissioners.

In a move to guard against any interference with the IRS, a 1998 federal law makes it illegal for executive branch officials to ask the tax agency to initiate or terminate an audit or investigations, Leas said. Convicted violators are subject to a maximum $5,000 fine and five-year prison term.

Several tax law experts recently told Politico the statute wouldn't necessarily stop the appointment of a nominee who might seek easier or tougher treatment of certain audits.

However, Robert McKenzie, a tax expert at the Arnstein & Lehr law firm's Chicago office, theorized that "a conscientious IRS employee would come forward and report it if someone tried to influence him or her on an audit."

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November 30, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, November 29, 2016

The IRS Scandal, Days 1201-1300

November 29, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1300:  The IRS Scandal And The DOJ's Ban On U.S. Citizens Only Hiring Practices

IRS Logo 2Patriot Post, DOJ Levies Fines for Respecting Rule of Law:

While Lois Lerner and her acolytes at the Internal Revenue Service got away with unlawfully blocking the tax-free applications of conservative groups — which the agency is still doing, by the way — Obama’s Justice Department is busy punishing those who actually take Rule of Law seriously.

The latest example comes from Colorado, where the Denver Sheriff Department was handed 
"a $10,000 fine after it required applications for deputy sheriff jobs to be U.S. citizens when hiring from the beginning of 2015 through March 2016," the Washington Examiner says. ...

Heritage Foundation fellow Hans von Spakovsky outlines the reasons the statue likely isn’t applicable in this case. Also, don’t miss the irony here. The IRS, to name just one example, spent years circumventing the law in order to subjugate Tea Party groups. But when it comes to the DOJ, its behavior is hardly different; the agency is selectively enforcing rules based entirely on whether it benefits the Left. Spakovsky writes, “Given the importance of the job done by law enforcement officers throughout all levels of government to protect the public from those who would harm them … requiring citizenship seems like a basic, commonsense qualification.”

“The federal government certainly thinks so,” he adds, “because it does not apply this statute to itself. If you want to be a special agent for the Federal Bureau of Investigation, which often works closely with local law enforcement, including sheriff’s departments like Denver’s, the FBI website specifically says that you ‘must be a United States citizen.’ The same is true of the U.S. Secret Service, which routinely discriminates against noncitizens in a manner that no doubt horrifies the DOJ’s Office of Special Counsel for Immigration-Related Unfair Employment Practices.” You know what else requires U.S. citizenship? Yep — the DOJ.

Federal agencies are hardly immune to corruption. They never have been. But when the Justice Department bends the rules — for example, by refusing to prosecute IRS bureaucrats and enforcing rules from which it exempts itself only so far as the outcome comports with an agenda — the administration can hardly be considered “the most transparent in history.” It’s a slow track to tyranny.

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November 29, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, November 28, 2016

The IRS Scandal, Day 1299:  Ways & Means Chair Brady On How The House Has Reined In The IRS

IRS Logo 2Houston Chronicle op-ed: Reining In the IRS, by Kevin Brady (Chair, House Ways & Means Committee):

Over the last year, the Ways and Means Committee has led the "IRS Accountability Agenda" where House Republicans have approved a series of aggressive, Constitution-restoring legislation to reform the IRS and hold it accountable to the American taxpayer.

Our actions include:

Passing into law the first ban against the IRS targeting taxpayers or organizations based on their political beliefs. In June 2016, the House passed the Preventing IRS Abuse and Protecting Free Speech Act, which protects the identities of those who donate to tax-exempt organizations. This was in response to more IRS targeting of Americans.

Passing into law the Stolen Identity Refund Fraud Prevention Act which directs the IRS to take aggressive action to combat the growing problem of identity theft of confidential taxpayer information.

In April the U.S. House passed the Ensuring Integrity in the IRS Workforce Act, which prohibits the IRS from rehiring employees for misconduct, and the No Hires for the Delinquent IRS Act, which suspends the hiring of new IRS employees unless the Treasury Secretary certifies that no IRS employees have serious delinquencies with respect to their own tax obligations.

The same month the U.S. House passed legislation that prohibits the IRS from paying bonuses to employees until the Secretary of the Treasury implements a comprehensive customer service strategy that puts hardworking taxpayers first. And the House approved a bill that repeals the IRS's authority to spend the user fees it collects – restoring to Congress the full authority over how the IRS spends those resources. ... 

One of the most offensive actions by the IRS is its continued unlawful seizures of money and assets of innocent Americans, called civil asset forfeiture. After two years of aggressive oversight by the Ways and Means Committee in which IRS Commissioner John Koskinen apologized for the agency's actions, the U.S. House approved the Clyde-Hirsch-Sowers RESPECT Act, which puts in place important measures to prevent the IRS from wrongfully seizing the assets of law-abiding taxpayers. Since then, under bipartisan pressure the IRS has agreed to review its seizures of assets against hundreds of American taxpayers, and has begun to return the money stolen from these innocent Americans, many of them small business people and farmers merely depositing their daily and weekly receipts. Finally, some justice for those who have been harmed. And perhaps fewer Americans hurt in the future by unlawful seizures.

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November 28, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Sunday, November 27, 2016

The IRS Scandal, Day 1298: The IRS Scandal And A Trump-Ryan Constitutional Revival

IRS Logo 2Wall Street Journal op-ed: A Trump-Ryan Constitutional Revival: Wariness of Trump Might Inspire Republicans in Congress to Give Up Lazy Delegation and Relearn the Art of Legislating, by Christopher DeMuth (Hudson Institute):

A central purpose of the American scheme of checks and balances is to draw out the distinctive strengths of the two political branches, executive and the legislature, while containing their distinctive weaknesses.

The scheme has not been working well of late. The consequences are unbridled executive growth into every cranny of commerce and society, and a bystander Congress. We have lapsed into autopilot government, rife with corruption and seemingly immune to incremental electoral correction.

These pathologies were a significant cause of the Trumpian political earthquake. And one of the many astonishing results of Donald Trump’s presidential campaign and the Republican sweep on Election Day is that they have set the stage for a constitutional revival. ... [T]he new president and Congress are poised to revive constitutional practices in their own branches.

One of these practices is results-oriented policy making—so-called transactional politics—an approximation of what the Founders meant by “deliberation.” Another, “checks and balances,” is vigorous policy competition between the executive branch and Congress. Both practices have fallen into disuse in what had seemed, until now, to be a continuing downward spiral of dysfunctional government. ...

Congress is bound to recover and assert many of its long-neglected legislative prerogatives. In recent decades, our scheme of separated powers has been supplanted by party solidarity between presidents and their congressional co-partisans. (Separation of Parties, Not Powers is the title of an influential 2006 study of this development by Daryl J. Levinson and Richard H. Pildes.)

Members of Congress have increasingly acted out of loyalty to party rather than to Congress as an independent constitutional branch. They support or obstruct administration initiatives along partisan lines, and when in support they receive fundraising and bureaucratic favors from the president in return. During periods of party-unified government, congressional majorities delegate broad lawmaking powers to the executive, as in the Affordable Care and Dodd-Frank acts, that are almost impossible to recover when divided government returns. Congressional minorities allied with the president, employing the Senate filibuster and other supermajority rules, ensure that Congress turns a blind eye to executive abuses, as in the recent IRS and Veterans hospital scandals. ...

If [congressional Republicans] want to participate in charting new courses for health-care, tax and immigration policy and financial regulation, they are going to have to give up lazy policy delegation to the executive and relearn the arts of legislating and collective choice. And if President Trump should try to settle these and similarly momentous matters through Obama-style executive decrees, they are going to have to cry foul and make it stick.

The hard intraparty contention of the 2016 campaign has prepared the congressional Republicans for this. President-elect Trump’s obvious relish for transactional politics, and the largeness of his ambitions, suggests that he is prepared as well. The likely evanescence of Barack Obama’s Congress-free domestic and foreign initiatives—the already voided immigration policies, the Clean Power Plan, the Iran deal, national rules for bathroom etiquette—should inspire everyone to stay at the table. ...

These would be healthy developments for our constitutional order. Presidents have the strengths of action, decisiveness, high aspiration and a national political mandate—along with the weaknesses of overreaching, insularity and concentration of power. They oversee a bureaucratic empire too vast for any one man to keep track of, and so powerful that abuse and corruption are commonplace.

Congresses have the strengths of full-spectrum political representation, 535 state and local mandates, and responsiveness to shifting popular concerns and a soft spot for human-rights minorities at home and abroad—along with the weaknesses of parochialism, irresolution, decision-by-committee and herd mentality.

We need more of the strengths and less of the weaknesses. But transactional politics and interbranch rivalry are no guarantee of happy outcomes, which depend ultimately on the constitution of the participants. The record of tough-guy political outsiders is less than great. Businessman Silvio Berlusconi in Italy, and muscleman Arnold Schwarzenegger in California, came to office promising to upend the status quo. But when they discovered how entrenched and hard-bitten the status quo really was, they promptly folded, contented themselves with mere celebrity, and accomplished nothing.

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November 27, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, November 25, 2016

The IRS Scandal, Day 1296: Will Koskinen Resign As IRS Commissioner At Trump's Request?

IRS Logo 2Politico Morning Tax, It’s On. Still:

If you thought Donald Trump’s win last week might soften Rep. Jim Jordan’s desire to impeach IRS Commissioner John Koskinen — well, you were wrong.

As our Katy O’Donnell reports, Jordan (R-Ohio), the chairman of the House Freedom Caucus, used the occasion of the IRS denying the Albuquerque Tea Party tax-exempt status to put a jolt into his impeachment efforts. Jordan called that decision just the latest sign that “Koskinen continues in his dereliction of duty. Congress must move forward on impeaching him.”

As Katy also notes, Koskinen isn’t likely to sound daunted by the threat, having noted previously that the votes just don’t seem to be there in the House for impeachment. He’s also said that a federal judge’s recent statement that the IRS might still be improperly singling out tea party groups — which Jordan cited on Monday — was mistaken.

What does it all mean? It’s pretty clear that House GOP leaders really don’t feel the need to tackle impeachment. But Koskinen, who has about a year left on his term, has also suggested that he’d leave if the next president doesn’t want him to lead the agency — which certainly seems like a possibility, at least.

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November 25, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (9)

Thursday, November 24, 2016

The IRS Scandal, Day 1295: If Koskinen Is Impeached Or Fired, Trump Could Appoint New IRS Commissioner To Go Easy On His Taxes

IRS Logo 2Politico, Trump Gets to Pick His Own Auditor: Lawyers Say There's Nothing to Stop Him From Appointing an IRS Chief Who Will Go Easy on Him:

President-elect Donald Trump will soon be able to appoint a new director of the agency auditing his taxes, a potential political minefield after his writeoffs and his refusal to release his returns were repeatedly questioned in the campaign.

The president is barred from directing how the IRS treats specific taxpayers, but lawyers say there’s nothing to stop Trump from appointing an IRS chief who will go easy on him while scrutinizing his political enemies.

“There is precious little statutorily that prohibits that,” said Caplin & Drysdale tax lawyer Chris Rizek, who served in the Treasury Department’s Office of Legislative Counsel under former president Clinton.

Trump could have the opportunity to put his own IRS chief into place quickly, even though the IRS commissioner serves a fixed five-year term to shield the agency from presidential politics. Current Commissioner John Koskinen, whose term ends next November, is facing potential impeachment in the House over his handling of investigations, and he could come under pressure to resign before Trump takes office. House Freedom Caucus Chairman Jim Jordan reiterated his call for impeachment this month, and lobbyists expect Trump to give Koskinen the boot to throw conservatives a bone. ...

The IRS also reviews the president’s and vice president’s returns each year, but those audits aren’t required by law, and Trump could stop them. “They don’t need Congress’ approval to change that,” [Valparaiso Law Professor David] Herzig said. “It might raise red flags politically. But you could just change it, or you could just not enforce that part about presidential audits.” ...

Trump is taking office at a time when the IRS has already been weathering accusations that its audits are politically motivated.

The IRS admitted to using “Be On the Lookout” lists to target political groups seeking tax-exempt status in May 2013, after an inspector general audit found the agency was using “inappropriate criteria” to flag “Tea Party and other organizations…based upon their names or policy positions.” No evidence was ever uncovered the White House had anything to do with scandal, but some conservatives argue President Obama in effect sent a dog whistle audit plea by publicly criticizing political social welfare groups, prodding former IRS official Lois Lerner to take it upon herself to act.

Koskinen himself says that the tea party controversy, which he was brought in to clean up, should illustrate the importance of a nonpolitical, independent IRS.

“It’s reemphasized the importance of making sure that there isn’t a question about the IRS being political,” Koskinen maintained.

For the most part, the IRS has gotten pretty good at shrugging off political pressures, tax lawyers said.

“It is not at all uncommon for people to clamor for IRS or DOJ activity or criminal investigation, and the IRS kind of takes the position that they ignore that political pressure. I have not heard of any instance since 1973 of anyone at the White House calling anyone at the IRS to ask for an audit or put pressure on a taxpayer,” [Chris Rizek, who served in the Treasury Department’s Office of Legislative Counsel under former president Clinton] said. “Because if that got out it would be a pretty outrageous news story.”

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November 24, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Wednesday, November 23, 2016

The IRS Scandal, Day 1294: House Republicans Will Try To Oust IRS Commissioner Koskinen This Month

IRS Logo 2Washington Examiner, Conservatives Will Try to Oust IRS Chief This Month:

Rep. Tim Huelskamp will call for a post-election vote to impeach IRS Commissioner John Koskinen when Congress returns from Thanksgiving recess, he told the Washington Examiner.

Huelskamp, R-Kan., said he has no plans to drop his effort to oust Koskinen, whose term does not expire until November 2017. "We need to clean house, especially at the IRS," Huelskamp said.

Huelskamp said Koskinen could pre-empt a vote by announcing he will retire when Republican President-elect Trump takes office in January. "But barring that, I anticipate that two weeks from now we will introduce that resolution," Huelskamp said.

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November 23, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (9)

Tuesday, November 22, 2016

The IRS Scandal, Day 1293: WSJ— Has The Obama Administration Been 'Long On Dignity And Short On Scandal'?

IRS Logo 2Wall Street Journal: A Crisis of Authority—II, by James Taranto:

[I]n a lengthy series of interviews, both pre- and postelection, with the New Yorker’s David Remnick, Obama has been quite fretful—torn, as at that press conference, between his duty as a lame-duck president to respect the office and the man who will soon hold it, and his anguish at what amounts to a repudiation of authority. ...

Remnick himself described the Obama presidency as “two terms long on dignity and short on scandal.” The IRS? The State Department scandal that arguably sank Mrs. Clinton’s campaign? Again, the memory hole.

In Lima on Sunday the president himself declared: “I am extremely proud of the fact that over eight years we have not had the kinds of scandals that have plagued other administrations.” That’s either delusional or very carefully worded: To our knowledge no other administration has used the IRS to punish ordinary citizens for dissent, nor faced FBI findings that the secretary of state treated classified information in an “extremely careless” fashion.

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November 22, 2016 in IRS News, IRS Scandal | Permalink | Comments (4)

Monday, November 21, 2016

The IRS Scandal, Day 1292: Boston Herald Editorial—IRS Scandal Belies President Obama's Claim That His Has Been A Scandal-Free Administration

IRS ScandalBoston Herald editorial, Scandal 'Free' Obama:

“I am very proud of the fact that we will — knock on wood — leave this administration without significant scandal.” — President Obama at his Nov. 14 news conference.

Ah, the lie oft repeated . . .

Define scandal. Or perhaps “significant scandal.”

Well, let’s start with the IRS scandal — or is there another word for what happens when public officials in one of government’s most sensitive departments make decisions based on ideology. Let’s see, how about when any organization with the words “tea party” in its name applies for tax-exempt status? Lois Lerner, who headed the tax exempt division resigned.

But guess that’s only a “significant scandal” for those groups still waiting to hear back from the IRS. ...

No scandal here, folks. Just move along.

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November 21, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Sunday, November 20, 2016

The IRS, Day 1291:  Federal Judge—‘Strong Showing’ That IRS Discriminated Against Tea Party Groups

Saturday, November 19, 2016

The IRS Scandal, Day 1290:  Linchpins Of Liberty Seeks Declaratory Relief That IRS Violated Their First Amendment Rights

IRS Logo 2 Notice Regarding Declaratory Relief to Which plaintiffs Are Entitled, Linchpins of Liberty v. United States, No. 1:13-cv-00777 (D.C. D.C. Nov. 11, 2016):

Based on the applicable law, and the Government’s admissions, there can be no dispute that Plaintiffs are entitled to a declaration that the IRS violated their First Amendment rights by:

(1) engaging in viewpoint-based discrimination when it targeted Plaintiffs’ tax-exempt applications for heightened scrutiny, significantly delayed the processing of those applications, and issued irrelevant and unnecessary demands for information—all because of Plaintiffs’ political-sounding names and/or policy positions (i.e., viewpoints); and

(2) demanding that Plaintiffs disclose such information as donor names, the type of conversations and discussions members and participants had during organizational activities, and the political affiliations of Plaintiffs’ officers and directors, all without any government interest, let alone a substantial or sufficiently important one, as the Government has admitted the accuracy of TIGTA’s finding that such information demands were entirely irrelevant and unnecessary.

United States’ Motion for Summary Judgment as to Remaining CLaims and Supporting Statement of Points and Authorities, Linchpins of Liberty v. United States, No. 1:13-cv-00777 (D.C. D.C. Nov. 11, 2016):

No one disputes that the IRS used certain criteria and engaged in other conduct in processing applications for tax-exempt status that it should not have done, both as found by TIGTA and acknowledged by the IRS itself. Whether what went wrong rises to the level of a constitutional injury is an issue that this Court has yet to decide, and the United States has not conceded that legal point. But something having gone wrong in the processing of applications, whether it constitutes a constitutional injury or not, the point remains that what happened next is exactly what should have happened: an independent oversight body (TIGTA) became involved and conducted an extensive investigation of what happened, it made its recommendations to correct the objectionable conduct, and the IRS implemented all of those recommendations. And all of that took place with the additional and intense scrutiny of Congress exercising its oversight function. Something having gone wrong in the first place, the process to correct that problem worked as it was supposed to, leaving no need for the Court to grant declaratory or injunctive relief.

The fact that the IRS has acted on Plaintiffs’ applications leaves no live or ongoing issues to be resolved as to Plaintiffs’ claims, which centered on the application process. And, as described, the IRS has permanently changed its procedures that gave rise to Plaintiffs’ claims. As a result, Plaintiffs are not entitled to the declaratory and injunctive relief that they seek.

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November 19, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, November 18, 2016

The IRS Scandal, Day 1289:  Federal Judge To IRS—‘Strong Showing’ Of Discrimination Against Tea Party Group

IRS Logo 2USA Today, Judge to IRS: ‘Strong Showing’ on Tea Party Bias Claim:

A federal judge ruled this month in a lawsuit in the ongoing IRS-Tea Party saga that there was "a strong showing" that the agency had discriminated against conservative groups because of their political stances.

And U.S. District Court Judge Michael R. Barrett wrote in a decision that a particular group suing the IRS "has made a strong showing of a likelihood of success" on its claim that its free speech rights were violated by the delay in processing the application.

He ordered the IRS to continue processing the application from the group, called the Texas Patriots Tea Party, even as the IRS fights the group’s lawsuit.

"The Government appears not to see the forest through the trees when it uses the existence of this lawsuit as grounds to continue the delay that is the subject of this lawsuit," Barrett wrote in his Nov. 4 decision. "The evidence strongly suggests that the IRS initiated the delay" because the Texas group was affiliated with the tea party. ...

The latest ruling could set a precedent in the ongoing saga over alleged unfair treatment of such organizations and make it easier for them to go through the non-profit application process, lawyers in the case say. That's because it could force the IRS to speed up and reconfigure how it determines whether such groups can get nonprofit status throughout its system, and not just for the individual Texas group.

"We are suing in part for what we think is a violation of our First Amendment right to free speech, and we feel this ruling gives us that," said Kansas City-based lawyer Eddie Greim who is one of the lead lawyers for the Tea Party groups in the case. "If it holds up, this could establish the basic principle that the IRS will be judged on in the future."

The IRS declined comment on the case Thursday, citing its policy not to discuss any litigation against the agency.

The Texas Patriots lawsuit reached class action status in January and now includes several other conservative groups. A total of four lawsuits against the IRS are still alive nationally, including two filed in Washington, D.C. The latest ruling involves the Texas organization alone.

All the suits were filed shortly after IRS officials in 2013 acknowledged they had singled out conservative-leaning "public interest" groups for extra attention while reviewing their applications for nonprofit status. Such a designation allows people to donate with no tax penalty, and such groups can conduct some political activity as long as it is not "the majority" of their actions.

Conservative groups claimed that the slow process put a chill on such contributions during the 2012 election cycle, raising the possibility that the scrutiny was a way to slow down fundraising and campaigning by conservatives by the Obama administration.

That led to a major scandal and several investigations by Congress, the Justice Department and even with the IRS itself. It also caused the resignations or firings of several top IRS officials, including then-Commissioner Steven Miller as well as other administrators tied to the targeting.

An FBI and Justice Department investigation found in 2015 that the IRS's nonprofit approval system was rife with mismanagement and poor judgment, but that there wasn't enough evidence to prove that IRS agents acted in political ways or should be criminally prosecuted.

But the IRS completely stopped processing the Texas group's nonprofit application that was originally filed in 2012 once the suit was filed, saying it had lost jurisdiction because of the ongoing case.

Barrett ruled that process should continue, but also that the IRS could use neither the previous process it used for such conservative groups nor the expedited replacement system the agency offered after the scandal broke. ...

It's unclear how these cases will be handled by the incoming Trump administration, although one conservative watchdog group is asking that investigations into the scandal be resumed once President-elect Trump takes office. ...

Judicial Watch this week released more than a thousand new documents obtained through a Freedom of Information Act lawsuit that show officials in Cincinnati and Washington knew IRS agents in Cincinnati were targeting conservative groups by their party affiliations and by "guilt by association." ...

"We're getting document after document showing the IRS both in Washington and Cincinnati knew that people were doing things outside the rules," Judicial Watch's Finton said. "If they were asking inappropriate questions based on guilt by association or party affiliations, then I don't know what more you need to show that something inappropriate was going on, if not illegal."

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November 18, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Thursday, November 17, 2016

The IRS Scandal, Day 1288:  Top IRS Official Says Agency Targeted Conservative Groups Based on ‘Guilt By Association’ And ‘Party Affiliation’

IRS Logo 2Judicial Watch Press Release, New Documents Reveal Top Obama IRS Official Admitted Cincinnati Office Targeted Groups Based on ‘Guilt by Association’:

Judicial Watch announced today that it has obtained 1593 pages of new documents from the Internal Revenue Service (IRS), including notes from a 2011 interoffice meeting revealing a top IRS official admitted that Cincinnati office agents were targeting organizations requesting tax exempt status based on “guilt by association” and “party affiliation.” According to former IRS Director of the Office of Rulings and Agreements Holly Paz, “they think they know what the org is really doing, rather than looking at actual activities.” ...

“This further confirms the IRS knew about abuses years before they were exposed. President Trump needs to reopen the criminal investigation of the IRS as soon as he is sworn into office,” said Judicial Watch President, Tom Fitton.

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November 17, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (10)

Wednesday, November 16, 2016

The IRS Scandal, Day 1287:  Koskinen Urges Trump Transition Team To Name New IRS Commissioner Soon

IRS Logo 2The Hill, IRS Chief Urges Trump Team to Consider Replacement Soon:

The head of the IRS said Tuesday it’s in the best interest of Donald Trump’s presidential transition team to act early when mulling options for his potential replacement.

“One of my concerns for a little while has been, whoever won, they need to understand that, no matter what happens, my term runs out next November,” IRS Commissioner John Koskinen told reporters after an American Institute of CPA's conference Tuesday.

He said Trump's team would be best served by making sure they have someone to put through the confirmation process by mid-spring in order to prevent a leadership drop off next November. ...

He said that he hopes meetings with the Trump’s transition team will begin soon.

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November 16, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, November 15, 2016

The IRS Scandal, Day 1286:  Rep. Jordan Says He Will Continue To Push For IRS Chief’s Impeachment

IRS Logo 2Politico, Jordan Says He Will Continue Push for IRS Chief’s Impeachment:

House Freedom Caucus Chairman Jim Jordan is still pushing to impeach IRS Commissioner John Koskinen as lawmakers return to Washington for the lame-duck session.

Jordan renewed the call for impeachment in a statement to POLITICO Monday criticizing the agency for denying tax-exempt status to the Albuquerque Tea Party group. The decision on the group — one of three stalled reviews the IRS agreed to expedite after a judge excoriated the agency for continued delays in August — came last week.

Rep. Jim Jordan Statement on IRS Denying Albuquerque Tea Party Non-Profit Status:

Congressman Jim Jordan (R-Ohio) made the following statement regarding the decision by the Internal Revenue Service (IRS) to deny the Albuquerque Tea Party non-profit status after delaying its application for almost seven years as part of the IRS targeting scandal:

“After seven years of stonewalling, targeting and harassing the Albuquerque Tea Party, the IRS has yet again blocked the group’s non-profit status without any explanation. This decision is a reminder that when a federal judge recently said that targeting was still going on, he meant it.

“This is further evidence that the IRS has not changed its ways, and shows that IRS Commissioner John Koskinen continues in his dereliction of duty. Congress must move forward on impeaching him.”

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November 15, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Monday, November 14, 2016

The IRS Scandal, Day 1285:  After Six Year Delay And One Court Order, IRS Denies Two Of Three Tea Party Applications For Tax-Exempt Status

IRS Logo 2Washington Times, After Years of IRS Delay, 2 Tea Party Groups Denied Tax-Exempt Status:

Nearly seven years after it applied to the IRS for nonprofit status, the Albuquerque Tea Party has finally been given a decision: Denied.

The tax agency, under orders from a federal judge, is belatedly tackling the remaining tea party cases that it delayed for years, and so far the tea party isn’t doing well. Only one of the three groups in the case was approved, and the other two, including Albuquerque, got notices of proposed denials last week.

The applicants will have a chance to appeal, but the denials aren’t sitting well with the groups, whose attorney said it’s more evidence that the IRS continues to single out the tea party for abuse. “It is clear that we still have an IRS that is corrupt and incapable of self-correction,” said Jay Sekulow, chief counsel at the American Center for Law and Justice, which represented a number of tea party groups in a case against the tax agency.

The one group that was approved was Unite in Action, a Michigan-based organization that first applied for tax-exempt status more than six years ago. The Albuquerque Tea Party and Tri Cities Tea Party from Washington state were notified of proposed denials.

Still to come is a decision on Texas Patriots Tea Party, a group that is part of a separate class-action lawsuit out of Ohio. A judge in that case ruled late last month that the IRS was likely violating the group’s First Amendment rights by delaying its application and ordered the tax agency to process and decide on the application.

The IRS, which declined to comment on the new decisions, admitted in court that it did subject the tea party groups to intrusive scrutiny, singling them out because of their political viewpoints and forcing them to go through hurdles that other groups didn’t face.

Jay Sekulow (American Center for Law and Justice), Continuing the Fight Against IRS Corruption in Federal Court:

As we continue our fight at the ACLJ against the lawless, unconstitutional Obama Administration’s IRS targeting of grassroots conservatives, we are achieving important victories.

But the fight also continues in federal court to ensure justice for all 38 of our clients from 22 states across the country. We must not stop fighting the IRS corruption until there is true justice and assurances that no American will ever be targeted by the IRS for his or her beliefs ever again.

Three of our remaining clients have received determinations from the IRS in recent weeks after a significant victory in which a federal judge ordered the IRS to issue determinations within 30 days.

Michigan-based Unite in Action – after waiting for more than six years – has been approved by the IRS.

Two other clients – Albuquerque Tea Party from New Mexico and Tri Cities Tea Party from Washington State – received proposed denials regarding their applications. The lengthy delays in receiving these determinations underscores the continuing problems inside the Obama Administration’s IRS.

It is clear that we still have an IRS that is corrupt and incapable of self-correction. We're pleased Unite in Action has finally received its approval after lengthy delays. We're now in the process of reviewing the proposed denials in the other two cases as we aggressively move forward with our federal lawsuit against the IRS to ensure it is bound by the U.S. Constitution and the law protecting the fundamental freedoms of speech and association that serve as the bedrock to this great nation.

As we continue fighting against the Executive lawlessness in federal court, please sign our petition to join the fight – for freedom and for the Constitution.

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November 14, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Sunday, November 13, 2016

The IRS Scandal, Day 1284:  Podesta Friend At DOJ Led Cover-Up Of IRS Scandal

IRS Logo 2Polizette, Podesta Friend at DOJ Led Cover-Up of IRS Scandal:

Senior Department of Justice official Peter J. Kadzik, newly exposed by WikiLeaks as colluding with Hillary Clinton’s campaign chairman, is the same Obama appointee who helped cover up the Internal Revenue Service’s deliberate targeting of conservative and Tea Party groups. ...

[Lois] Lerner refused to testify at congressional hearings, instead invoking her Fifth Amendment rights to avoid possible self-incrimination. Congressional investigators found that the IRS targeted right-of-center 501(c)(4) nonprofit advocacy groups during the 2010 and 2012 election cycles. They determined that Lerner organized an unprecedented crackdown on Tea Party and conservative groups and then attempted to scapegoat those nonprofits, blaming them for the harsh treatment they received at her instigation. ...

At DOJ, Kadzik also put the kibosh a year ago on any possible criminal prosecution of Lois Lerner. ... Kadzik was dismissive. "Ineffective management is not a crime," he wrote. "The Department of Justice's exhaustive probe revealed no evidence that would support a criminal prosecution. What occurred is disquieting and may necessitate corrective action — but it does not warrant criminal prosecution."

Kadzik wrote there was no proof of bad intent on Lerner's part and that she seemed to try to correct the inappropriately tough scrutiny on conservative and Tea Party nonprofits once she "recognized that it was wrong." "In fact, Ms. Lerner was the first IRS official to recognize the magnitude of the problem and to take concerted steps to fix it," he wrote. ...

Kadzik is tied to the Democratic Party Establishment and is a donor to Democrat candidates. Using his private Gmail account, on May 19, 2015, Kadzik tipped off John Podesta, Hillary's campaign chairman and former White House chief of staff in Bill Clinton's administration, about an upcoming hearing, according to a WikiLeaks document dump. ...

Earlier this year, WikiLeaks published a Sept. 8, 2008 email from Podesta, then serving on the Obama transition team, to Cassandra Butts of the Obama campaign. Podesta boasted in it that Kadzik — who represented him when he was accused of procuring a job for Bill Clinton paramour Monica Lewinsky as a way to keep her quiet — was a "fantastic lawyer" who "kept me out of jail." 

 

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November 13, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Saturday, November 12, 2016

The IRS Scandal, Day 1283:  IRS Handed Defeat in Court Ruling Against Tea Party Group It Stiffed

IRS Logo 2Townhall, IRS Handed Defeat in Court Ruling Against Tea Party Group It Stiffed:

The Texas Patriots Tea Party emerged as victor in its case against the IRS. On Friday, U.S. District Court Judge Michael R. Barrett ruled that the agency must process TPTP's application for tax exempt status after a long (and seemingly politically motivated) delay.

It's now clear the IRS segregated TPTP's application in 2012 because it was a conservative political organization. It was just one instance in a larger scandal in which the IRS targeted conservatives and unfairly stalled their applications.

The agency has insisted it no longer practices such political bias, yet the court said that doesn't solve TPTP's issue. "Regardless of the fact the IRS purports to have stopped applying the inappropriate political advocacy criteria in 2013, the evidence is undisputed that the IRS continued to delay processing TPTP’s until August of 2016," the judge wrote in his decision."

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November 12, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Friday, November 11, 2016

The IRS Scandal, Day 1282:  True The Vote Asks Supreme Court To OK Lawsuits Against Lois Lerner, Former IRS Commissioner For Damages For Violating Their Constitutional Rights

IRS Logo 2 The Center for Constitutional Jurisprudence at the Claremont Institute, Constitutional Jurisprudence Clinic at Chapman Law School, Public Interest Legal Foundation and Cleta Mitchell and other lawyers at Foley & Lardner have filed a cert. petition (appendix) asking the Supreme Court to review True the Vote’s case against the IRS for the IRS’s illegal targeting of conservative organizations:

True the Vote won a major victory before the U.S. Court of Appeals for the D.C. Circuit back in August, when that Court reinstated its claims against the IRS itself, holding that they were not moot even after the IRS finally granted True the Vote’s application for non-profit status, because the IRS has not demonstrated that it has ceased its illegal conduct. But the D.C. Circuit also held that the individual IRS officials involved in the unconstitutional targeting scheme, including Lois Lerner and the former IRS Commissioner Douglas Shulman, were immune from suit for what one of the judges described as their “egregious unconstitutional conduct.” That aspect of the case is what True the Vote is asking the Supreme Court to review. There are sympathetic courts elsewhere in the country that seem to recognize the problem if the perpetrators of this unconstitutional targeting scheme are not held to account. The Sixth Circuit Court of Appeals in Ohio stated in parallel litigation that “among the most serious allegations a federal court can address are that an Executive agency has targeted citizens for mistreatment based on their political views. No citizen—Republican or Democrat, socialist or libertarian—should be targeted or even have to fear being targeted on those grounds.” And the district court for the Southern District of New York in Manhattan has allowed lawsuits to proceed against IRS officials by other organizations who fell victim to the same targeting scheme that caught True the Vote in its net.

We close the brief with a reminder from Abraham Lincoln’s Lyceum Address: If the laws be continually disregarded with impunity, “the alienation of the American People’s affections from the Government [will be] the natural consequence.” Lincoln was addressing mob rule by private citizens, of course, but the danger is even more pronounced when the lawlessness is engaged in by those at the highest levels of government. We expect to learn sometime in January whether the Supreme Court will take this case.

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November 11, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, November 10, 2016

The IRS Scandal, Day 1281:  Another Federal Court Says The IRS Continues To Harass Conservative Groups

IRS Logo 2 NorCal Tea Party Patriots v. IRS, No. 1:13cv341 (D.C. S.D. OH Nov. 4, 2016) (citations omitted):

Did the IRS subject TPTP to viewpoint discrimination in the manner in which it has processed TPTP’s § 501(c)(4) application for tax-exempt status and is that discrimination still ongoing? The Court concludes in the following analysis that TPTP has established at least a likelihood of success on the merits on those questions. The Court first will explain why granting TPTP preliminary injunctive relief to remedy the ongoing harm against TPTP is appropriate. It then will follow from that analysis why the Government is not entitled to summary judgment.

A. Motion for Preliminary Injunction
Plaintiffs seek a preliminary injunction requiring the IRS to process TPTP’s § 501(c)(4) application in the ordinary course of business. The Government responds that a preliminary injunction is neither justified nor appropriate. ...

2. Likelihood of Success on the Merits
TPTP has made a strong showing of a likelihood of success on the merits on Count II of the Second Amended Class Action Complaint. TPTP alleges that the IRS discriminated against it on the basis of its political viewpoint in the processing of its § 501(c)(4) application. TPTP has put forward evidence demonstrating that the IRS targeted TPTP’s application for special scrutiny and delayed processing because it met the political advocacy criteria found to be inappropriate in the 2013 TIGTA Report. Although the IRS had changed the political advocacy criteria language in May 2012 to focus more on political activities than on party names, an EO screener identified TPTP as a “TEA PARTY” case on the screening checklist in September 2012. Additionally, the IRS Rule 30(b)(6) deponent admitted TPTP’s application was segregated as a Tea Party case. The IRS has held TPTP’s application without further processing since June 2013 after requesting and receiving additional information from TPTP. Processing applications “pursuant to different standards and at different rates depending upon the viewpoint of the applicants [is] a blatant violation of the First Amendment.” Z Street v. Koskinen, 791 F.3d 24, 32 (D.C. Cir. 2015).

The Government responds that the 2015 TIGTA Report proves that the IRS ceased using the inappropriate political advocacy criteria to target dissenting groups at the screening stage based on their political viewpoint no later than June 2013. The Government argues that the Court should not issue an injunction to enjoin behavior which the IRS already has stopped. However, the IRS’s argument misses the mark.

Regardless of the fact the IRS purports to have stopped applying the inappropriate political advocacy criteria in 2013, the evidence is undisputed that the IRS continued to delay processing TPTP’s until August of 2016. The Government appears not to see the forest through the trees when it uses the existence of this lawsuit as grounds to continue the delay that is the subject of this lawsuit. The evidence strongly suggests that the IRS initiated the delay because TPTP’s application was perceived at the screening stage to be a Tea Party case. The Court is not persuaded that the discriminatory animus that motivated the initial decision to segregate and delay TPTP’s application can be neatly separated from the delay that now has continued for three years. Accord True the Vote, Inc. v. Internal Revenue Serv., 831 F.3d 551, 562 (D.C. Cir. 2016) (“It is not at all clear why the IRS proposes that not ceasing [discriminatory conduct] becomes cessation if the victim of the conduct is litigating against it.”).

Moreover, the Court is not convinced that the IRS’s general litigation hold policy justifies the delay in processing TPTP’s application. The Government admitted that it has discretion whether to apply the general litigation hold policy in specific cases during oral arguments in the case of Z Street v. Koskinen, No. 15-5010 (D.C. Cir. May 4, 2015), another case in which a tax-exemption applicant alleged viewpoint discrimination by the IRS.8 Moreover, the litigation hold policy should arise only when an applicant’s tax exemption status is at issue in the litigation. TPTP is not challenging in this suit whether it is entitled to § 501(c)(4) tax-exempt status. There is no disputed issue in this litigation which will affect the IRS’s determination of whether TPTP qualifies for § 501(c)(4) status. Thus, there is no basis to stay determination of the application pending the outcome of this lawsuit. Additionally, the Government has not proven that the so-called cease and desist letter justifies the purported litigation hold. TPTP asked the IRS to process its application during its Rule 30(b)(6) deposition, well after Plaintiffs’ counsel issued the cease and desist letter. Plaintiffs’ counsel later explained at a Court conference that the sole purpose of the cease and desist letter was for the IRS to direct communications regarding the processing of TPTP’s application through its counsel. Yet the IRS has persisted to delay processing the application. Given these facts, TPTP has established a least a likelihood of success on the merits of proving that the IRS’s refusal to finish processing TPTP’s § 501(c)(4) application is a continuation of the discriminatory treatment that appears to have begun when the IRS segregated the application as a Tea Party case.

Likewise, the Government has not proven that a litigation hold was necessary to protect its agents from being named as defendants in this suit. Plaintiffs originally asserted multiple claims against IRS managerial and line-level employees in the Second Amended Class Action Complaint. The Court dismissed the claims against the employees in their individual capacities in its July 17, 2014 Order. It is unclear on what reasonable grounds the agents who process TPTP’s application could be sued given the law of the case doctrine. Also, the evidence that the IRS ceased using the political advocacy criteria to segregate Tea Party-type applications by June 2013 undercuts the Government’s argument. IRS agents who process an application in the ordinary course are not likely to be accused of viewpoint discrimination. The Government’s August 16, 2016 letter explaining that the IRS has decided to process TPTP’s application does not alter this conclusion. To date, the IRS has not issued a decision on the application.

Finally, the Government has not established that a preliminary injunction is inappropriate because such relief is different in kind from the relief sought in Count II of the Second Amended Class Action Complaint. Plaintiffs state in Count II that “[t]his Court may grant declaratory and injunctive relief against the IRS and the Treasury Department . . . declaring that the Defendants’ discriminatory conduct is unlawful and enjoining them from using tax exemption applicants’ political viewpoints to target them and subject them to delay . . . .” The injunctive relief sought in the Motion for Preliminary Injunction is not materially different. TPTP asks the Court for an ordering compelling the IRS to process TPTP’s application in the ordinary course. Such an order would require the IRS to end the three-year delay in processing.

For all these reasons, the Court concludes that Plaintiffs have established TPTP’s likelihood of success on the merits on Count II of the Second Amended Class Action Complaint.

3. Irreparable Harm and the Public Interest
Next, the Government argues that Plaintiffs cannot prove irreparable harm. The Court disagrees. The loss of First Amendment freedoms causes irreparable injury. Liberty Coins, LLC v. Goodman, 748 F.3d 682, 690 (6th Cir. 2014). Additionally, the public interest lies with the protection of constitutional rights. 

Nonetheless, the Government argues that no irreparable harm exists in this case because TPTP has an alternative statutory remedy available. In 2015, Congress amended 26 U.S.C. § 7428 to provide a remedy for § 501(c)(4) applicants whose applications have been pending before the IRS for more than 270 days without a determination. Previously, the remedy was available only to § 501(c)(3) applicants. Now § 501(c)(3) and § 501(c)(4) applicants can file suit in the U.S. Tax Court, the Court of Federal Claims, or the District Court for the District of Columbia for a judicial determination of their tax exemption applications if the IRS has not made a determination in 270 days. 26 U.S.C. § 7428(a)&(b). The Government argues that TPTP will not suffer irreparable harm absent an injunction because it can file a § 7428 suit for judicial determination of its application.

The Government made a substantially similar argument in the Z Street case and it was rejected by the D.C. Circuit Court of Appeals. ... The Court agrees with the Z Street analysis. TPTP is not asking the Court to declare its eligibility for a § 501(c)(4) tax exemption. Instead, TPTP seeks an order prohibiting the IRS from delaying its consideration of its § 501(c)(4) application because of its political viewpoint in opposition to the current presidential administration. It seeks for the IRS to process its application in the ordinary course of business as it would any other § 501(c)(4) applicant. Section 7428 does not provide an adequate alternative remedy for the alleged constitutional wrongdoing.

4. Preliminary Injunctive Relief
The Court concludes for the reasons stated above that Plaintiffs have established that TPTP is entitled to injunctive relief pursuant to Rule 65 of the Federal Rules of Civil Procedure. The Court orders the IRS to process TPTP’s § 501(c)(4) application in the ordinary course of business. The IRS shall direct all necessary communications with TPTP through Plaintiffs’ counsel.

B. Motion for Partial Summary Judgment
Turning to the Motion for Partial Summary Judgment, the Government argues that TPTP’s claim fails as a matter of law on the grounds of mootness or lack of standing. It follows from the foregoing analysis of the preliminary injunction issue that the Court does not agree. ...

The Government argues that the case is moot and that TPTP lacks standing because the IRS has ceased the allegedly wrongful conduct which is the basis of the Count II claim. TIGTA concluded that the IRS discontinued using the inappropriate political advocacy criteria and the BOLO listings to screen cases by June 2013. Plaintiffs do not offer evidence at this point to refute the TIGTA conclusion. The cessation of wrongful conduct by a government entity can moot a case if the cessation appears genuine. Bench Billboard Co. v. City of Cincinnati, 675 F.3d 974, 981 (6th Cir. 2012). However, in True the Vote, Inc. v. Internal Revenue Serv., the D.C. Circuit Court of Appeals was not convinced that statements made by the IRS regarding the suspension of the use of the BOLO listings established that the case was moot. The court explained: “A violation of right that is ‘suspended until further notice’ has not become the subject of voluntary cessation, with no reasonable expectation of resumption, so as to moot litigation against the violation of rights.” This Court agrees. While the cessation of the use of the political advocacy criteria to screen applications did not remedy the alleged ongoing discrimination against TPTP, a preliminary injunction ordering the IRS to process TPTP’s § 501(c)(4) application in the ordinary course will. The Court concludes, therefore, that TPTP has a concrete interest in the outcome of the case, and Count II is not moot. The Court will deny summary judgment to the Government on Count II.

IV. CONCLUSION
For the foregoing reasons, the Government’s Motion to Strike, or in the Alternative Response to, Plaintiff’s Notice of Intention to Supplement Motion for Preliminary Injunction is GRANTED to the extent that it seeks to respond to Plaintiff’s Notice of Intention to Supplement Motion for Preliminary Injunction; the Government’s Motion for Partial Summary Judgment is DENIED; and the Texas Patriots Tea Party’s Motion for Preliminary Injunction is GRANTED.

The Court orders the IRS to process TPTP’s § 501(c)(4) application in the ordinary course of business, directing all necessary communications and requests for additional information to TPTP’s legal counsel. The risk of harm to the IRS if this injunction is overturned is minimal so the Court will require Plaintiffs to submit only a nominal security deposit of $1.00.

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November 10, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Wednesday, November 9, 2016

The IRS Scandal, Day 1280: WSJ—Lois Lerner As Precursor To James Comey

IRS Logo 2Wall Street Journal:  The Antonin Scalia Election, by William McGurn:

When Americans find themselves inside the voting booth on Tuesday, for many the decisive factor will be which candidate—Donald Trump or Hillary Clinton—should fill Antonin Scalia’s empty seat on the Supreme Court.

This is no small thing. Still, whose vote will replace Scalia’s on the high court is only half the Scalia story, and perhaps not the important half. Beyond even his jurisprudence, this was a man whose wisdom was to appreciate that American liberty is rooted in the separation of powers—and that the chief means of accountability is the ballot box and not the criminal courts.

The left abandoned this principle long ago. ... Mr. Comey’s real outrage was his acquiescence to the handcuffs the Justice Department put on FBI investigators throughout the Clinton email investigation—especially Justice’s refusal to go to a grand jury, without which investigators have no good way to compel evidence and testimony. The principled stand for an FBI director would have been to inform the attorney general,Loretta Lynch, that unless she gave his agents the standard tools of an FBI investigation, he would resign and tell the American people why.

Instead, Mr. Comey proceeded with the constraints and then showboated with a July press conference absolving Mrs. Clinton of any prosecutable wrongdoing. Never mind that an indictment was not his decision to make.

No doubt Ms. Lynch would not have indicted Mrs. Clinton. But had Mr. Comey kept his mouth shut, she, President Obama and Mrs. Clinton would be answering for the decision—not to mention for the highly unethical meeting between the attorney general and Mrs. Clinton’s husband that would have remained secret but for an intrepid reporter. Now all Mr. Comey has to show for his concern for his personal reputation is to have added the FBI to the list of government institutions the public no longer trusts.

And let’s remember how Republicans blinked on Lois Lerner. When Congress held her in contempt for refusing to testify about IRS targeting of conservative groups, the House had three choices: pursue her civilly (which would take years), jail her until she testified, or refer the matter to the local U.S. attorney. Then-Speaker John Boehner opted for the last, probably realizing the Obama Justice Department would never prosecute.

Throughout it all, Congress was lectured about not doing anything to jeopardize a criminal investigation. But in the American understanding, government is accountable first and foremost to We the People operating through our elected representatives. As a co-equal branch of government, Congress is free to use its own powers regardless of what some executive agency might be doing.

Certainly jailing Ms. Lerner would not have been without its political risks. Then again, the Founders meant for such decisions to require hard political calculations.

And the results of opting for an indictment House Republicans knew would not come? Ms. Lerner has mostly gotten off scot-free. The American people still do not know the whole story. And on Friday, a ruling from a federal judge in Ohio reminded us the IRS is still targeting conservative organizations for illegal scrutiny.

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November 9, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Tuesday, November 8, 2016

The IRS Scandal, Day 1279: WSJ — Another Federal Court Says The IRS Continues To Harass Conservative Groups

IRS Logo 2Wall Street Journal editorial, IRS vs. Tea-Party Patriots: New Evidence That Harassing Conservatives Has Continued:

The Obama Administration is nearing the end but the legal challenges to the IRS targeting of conservative groups are far from over. On Friday federal Judge Michael Barrett granted a preliminary injunction against the IRS on strong evidence of viewpoint discrimination by the agency.

Judge Barrett ruled (NorCal Tea Party Patriots v. IRS) that the Texas Patriots Tea Party (TPTP) “has made a strong showing of a likelihood of success on the merits.” He added that “TPTP has put forward evidence demonstrating that the IRS targeted TPTP’s application for special scrutiny and delayed processing because it met the political advocacy criteria found to be inappropriate in the 2013 TIGTA Report.”

This case is especially notable because the targeting of TPTP occurred after the time that the Treasury Inspector General for Tax Administration said the IRS had been using the inappropriate targeting criteria. The group, which is based near Fort Worth, applied for tax-exempt status in summer 2012 and was flagged in September 2012 for extra scrutiny as a tea-party group. According to the Treasury report, the IRS’s use of targeting criteria stopped in May that year. ...

Judge Barrett’s injunction requires the IRS to process the group’s application as it would any other, but the tax agency needs a top to bottom house-cleaning.

New York Post, From the Right: IRS Targeting Never Stopped:

Remember the IRS scandal over the agency targeting conservative nonprofits? Well, it’s still happening, writes Rick Moran at PJ Media: “A federal judge in Ohio has had it with the IRS foot-dragging on applications from conservative organizations for exempt status and has ordered the agency to quit stalling.” The order, contained in a filing unsealed Friday, makes clear that “three years after being assured by the IRS that they had stopped singling out conservative organizations for special scrutiny, the targeting continues,” Moran says. It also shows the IRS’ utter contempt for the investigation, according to Moran. The targeting will continue, Moran says, “until a judge holds a couple of IRS managers in contempt and lets them cool their heels in jail for a few days.”

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November 8, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, November 7, 2016

The IRS Scandal, Day 1278:  Trump's Refusal To Release His Tax Returns And The IRS Scandal

IRS Logo 2American Thinker: In Defense of Trump's Nondisclosure of His Tax Returns, by Kenneth H. Ryesky (E&Y):

There are ... considerations against disclosure, over and above the political calculus behind Trump's decision to release or not release his tax returns (and, for that matter, the tax return disclosure/nondisclosure decision of any politician for any political office). ...

Ex-IRS commissioner Fred Goldberg asserts that Trump's release of certain limited portions of his tax returns "would have no impact on any pending or future IRS audit of Trump. Zero. None." But there is no denying that the IRS has increasingly of late been sicced by politicians upon their political enemies, and it is not difficult to imagine a government official who is not directly involved in a Trump return audit (including a president or congresscritter), having seen a released copy, pressuring or otherwise inducing a cognizant IRS bureaucrat to take a closer look at one or more particular items on Trump's return (or on the return of a connected person or entity). ...

Notwithstanding (or perhaps because of) my professional standing in the taxation community, my own curiosity about Donald Trump's tax returns is probably greater than that of the average American voter. But given the demonstrated political weaponization of the IRS, perhaps Trump's refusal to play the disclosure game may better serve America's interests in the long run.

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November 7, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Sunday, November 6, 2016

The IRS Scandal, Day 1277: Second Federal Court Rules IRS Targeted Conservative Groups, Orders IRS To Act On Tea Party Group's Tax-Exempt Application Pending Since 2012

IRS Logo 2Washington Times, Judge Orders IRS to Stop Tea Party Targeting, Approve Four-Year-Old Application:

The IRS is still targeting tea party groups for illegal scrutiny by refusing to process applications that have been pending for years, a federal court said in a ruling made public Friday, ordering the tax agency to quit stalling.

U.S. District Judge Michael R. Barrett said the IRS can still either approve or deny the Texas Patriots Tea Party’s application for nonprofit status, but the agency can no longer sit on its hands. And he said the IRS must give the application an honest evaluation without prejudice stemming from the years long targeting.

In a series of stark findings, Judge Barrett ruled that the IRS did in fact single tea party groups out for special scrutiny because of their political viewpoints in opposition to President Obama — undercutting congressional Democrats who said liberal groups faced the same level of targeting.

“The evidence strongly suggests that the IRS initiated the delay because TPTP’s application was perceived at the screening stage to be a Tea Party case,” Judge Barrett, whose courtroom is in Ohio, said in an opinion that was filed earlier under seal, and was only made public after parts of the 29-page ruling were redacted.

It’s the latest blow to the tax agency, which is facing a separate order from a judge in Washington, D.C., to process a handful of other cases the agency had delayed.

American Thinker, Judge Orders IRS to Stop Targeting Conservative Groups:

A judge in Ohio is ordering the IRS to stop targeting conservative groups applying for tax exempt status and to make an immediate determination on an application by a Tea Party group in Texas.

The decision, made public on Friday, leaves no doubt that despite their claims to the contrary, the IRS is still playing politics in determining the tax exempt status of conservative groups - some of whom have been waiting for years to be approved. ...

The arrogance of this out of control agency is breathtaking. Judge after judge in ruling after ruling has ordered the IRS to halt their illegal targeting of conservative groups, but the IRS has, in effect, thumbed its nose at the courts and continues to play politics with tax exempt applications by conservatives.

The real world impact is that most of these groups who've had their applications slow walked through the system wither and die because donors can't take the tax deduction from monies they contribute to these groups. That, of course, is the heart of the IRS plan, which has worked for 5 years to stifle the free speech of conservatives.

PJ Media, Federal Judge: IRS Still Illegally Targeting Conservatives:

A federal judge in Ohio has had it with the IRS foot-dragging on applications from conservative organizations for exempt status and has ordered the agency to quit stalling.

The order was contained in a sealed filing that became public on Friday. What's clear in the judge's order is that three years after being assured by the IRS that they had stopped singling out conservative organizations for special scrutiny, the targeting continues.

Of course, it isn't just the IRS slow-walking applications through the system that's the problem. The targeting also included outrageous requests for information like donors names and addresses, reading lists, and other private information the agency had no business trying to acquire.

Two federal judges have now ruled against the IRS, rejecting their arguments that they're not targeting conservative organizations.

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November 6, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, November 5, 2016

The IRS Scandal, Day 1276:  George Will On The 2016 Presidential Election And The IRS Scandal

IRS Logo 2Washington Post op-ed: A Fitting Final Chapter to 2016’s Sleaze Sweepstakes, by George F. Will:

It is grimly hilarious to hear it said that the Justice Department, by not holding Comey to established protocols concerning discussions of ongoing investigations, and concerning pronouncements close to elections, has tainted itself. ... The department has enabled, by not seriously investigating, the IRS’s suppression of political advocacy by conservative groups. Or of the IRS’s subsequent destruction of subpoenaed emails pertinent to this. So, unsurprisingly, the most intrusive and potentially punitive federal agency continues to punish conservative groups for being conservative, according to Cleta Mitchell, a lawyer for political groups who confirms there are indeed conservative organizations who were targeted by the IRS and have still not received their tax-exempt status.

In 2013, President Obama professed himself “angry” about “inexcusable” IRS behavior, before he decided there was not a “smidgen” of IRS corruption. He claimed to have learned about the IRS behavior from the media. Now he claims that he learned from the media about Clinton’s email abuses, although they had exchanged emails using her private server. Perhaps.

The defining scandal of the Obama era has been the media’s lackadaisical consensus that Obama’s administration has had no serious scandal. This, although with the Justice Department protecting the IRS, the administration has (in the words of Richard Nixon’s White House counsel John Dean) used “the available federal machinery to screw our political enemies.”

Clinton, the ultimate author of her current agony, resembles no one so much as Nixon in her paranoia and joyless pursuit of joy. Her government career began with the House committee preparing Nixon’s impeachment. Twenty-two years earlier, he had saved his career by addressing a supposed scandal with his nationally broadcast “Checkers speech,” which was mawkish, abasing and effective. How fitting it would be for a Clinton “Checkers speech” to end our long national nightmare that this campaign has been.

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November 5, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, November 4, 2016

The IRS Scandal, Day 1275: The Impact Of The IRS Scandal On The Investigation Of The Clinton Foundation

IRS Logo 2Dallas Observer, The Dallas IRS Office That's Quietly Determining the Fate of the Clinton Foundation:

The Earle Cabell Federal Building in downtown Dallas is an all purpose office complex, a bastion of federal bureaucracy located at 1100 Commerce St. Most people come for a passport or to get business done in front of a federal judge. But inside, a quiet review is underway that has direct ties to the raging presidential election: The local branch of the IRS' Tax Exempt and Government Entities Division is reviewing the tax status of the Bill, Hillary and Chelsea Clinton Foundation.

This IRS review has not generated similar waves as Department of Justice probes into the foundation, and has largely been forgotten in the campaign's melee. It's just not as sexy as private email servers, FBI infighting and charges of political pressure applied to law enforcement.

But even though this examination is less scrutinized and is harder to conceptualize, it's impact may be important. The report won't likely be done in time to influence the presidential campaign — even though the review started more than four months ago — but it could certainly influence the first term of a Hillary Clinton presidency.

As with anything tax related, the status of the foundation may be determined using rules few understand. And that makes understanding the work at 1100 Commerce St. in Dallas that much more important. 

In Washington, D.C., many things start with words printed on congressional letterhead. Earlier this year, 64 GOP members of Congress asked the IRS to investigate why the foundation can keep its nonprofit status. The letter includes “media reports” claiming pay-to-play relationships between former President Bill Clinton, who received large speaking fees, and decisions made by Hillary Clinton to approve choices that benefited foundation donors. The sources of these reports range from The New York Times to hit-piece investigative books.

In July, the IRS sent letters back to the Congress informing members the review had begun. The letter also noted that the Tax Exempt and Government Entities Division (TE/GE) office in Dallas would be conducting the review.

IRS spokespeople in Dallas and Washington won’t say why the review is being conducted in Dallas. Spokespeople claim even this information would violate rules — Code 6103, staff make sure to cite — that stop them from discussing ongoing examinations. IRS officials declined to provide details about the Dallas office, including its size, or comment on the TE/GE work in general. ...

The TE/GE focuses on nonprofit groups, which is specialty work that requires experience. “They are pretty much career people,” says Ben Stoltz, an attorney with Perliski Law Group, a Dallas boutique firm with half of its business representing nonprofit groups. “It’s a different side of the IRS than people are used to seeing. ... They're generally very cooperative, but they're also the watchdogs."

The mix of awareness and enforcement dovetails with cases that get publicity. "They have a limited budget, which is a problem, so they have to pick their targets wisely," Stoltz says. "Because this is a high profile case, they can make an example and show that no one is above the law.” ...

Instead of money changing hands, the IRS is looking to see if the Clintons traded money for preferential treatment. The IRS rules lay out what qualifies as inurement:

Any transaction between an organization and a private individual in which the individual appears to receive a disproportionate share of the benefits of the exchange relative to the charity served presents an inurement issue. Such transactions may include assignments of income, compensation arrangements, sales or exchanges of property, commissions, rental arrangements, gifts with retained interests, and contracts to provide goods or services to the organization.

Given this language, citing “gifts” and “quid pro quo benefits” in emails is a pretty bad move for anyone involved in a nonprofit group. Another bad move: When senior Clinton advisers like Doug Bland call the intersection of the foundation fundraising and the former president’s personal activities “Bill Clinton Inc.” ...

This all leaves the IRS investigation in Dallas as a sideshow to the main Clinton Foundation events playing out in the offices of other federal agencies. However, if other investigations expose pay-to-play schemes, the IRS could take that into consideration, strip the foundation of its nonprofit status and seek payment of back taxes.

Looking forward, there’s one last wrinkle: If the IRS gives the foundation a clean bill of health, it will likely resurrect charges that the tax exemption office operates with a political bias. In 2011 Lois Lerner, the IRS’ head of TE/GE, pleaded the 5th and left her position after a scandal broke surrounding the denial of nonprofit exemptions to right-wing groups.

A Department of Justice probe found "substantial evidence of mismanagement, poor judgment and institutional inertia leading to the belief by many tax-exempt applicants that the IRS targeted them based on their political viewpoints.” A Government Accountability Office report in 2015 found "there are several areas where EO’s controls were not well designed or implemented. The control deficiencies GAO found increase the risk that EO could select organizations for examination in an unfair manner — for example, based on an organization’s religious, educational, political, or other views."

The GAO said the expertise of the TE/GE staff could be a problem, if there are too few "gatekeepers" to pass along referrals for closer looks:

The specialization of the classifiers allows for in-depth knowledge of complex issues and for the opportunity to apply experience; however, internal control risks accompany this approach. First, for political activity, church, and high profile referrals, the classifier appears to serve as an initial gatekeeper for determining whether a referral is reviewed by a committee. Although committee reviews are intended as a safeguard against unfairness in the examination selection process, referrals that do not make it past the classifier do not undergo committee review. 

The GAO recommended a host of changes, much of it focused on better documentation, more training and an increase in staff rotations. The IRS agreed to them — without admitting any guilt. In a response letter by deputy commissioner John Dalrymple, he says the IRS agrees that "internal controls are necessary to ensure we are applying the tax law with integrity and fairness. Although the report says that a hypothetical risk exists that returns could be selected unfairly, the draft report did not find any evidence that this has happened. Nevertheless, Exemptions Organization is committed to further strengthen our internal controls to ensure we continue to select organizations for examination in a fair and consistent manner. "

The DOJ determined that no crimes had been committed but the damage had been done — for many, the TE/GE will forever be partisan. The ruling on the Clinton Foundation's status, either way, will lead some to see continued partisanship inside the IRS or overreaching in a high profile case to prove they are not partisan.

But there is actually a bigger issue at stake as politics batters the nonprofit tax world. After all, the whole point of the IRS' involvement is to ensure that donations are actually used for charitable work.  

“It boils down to the public trust,” Stoltz says. “This division is responsible for the integrity of the system. Americans donate more money to charity than anywhere else in the world. But for the public to donate, people have to believe that it’s legit.”

(Hat Tip:  Glenn Reynolds.)

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November 4, 2016 in IRS News, IRS Scandal, Political News, Tax | Permalink | Comments (1)

Thursday, November 3, 2016

The IRS Scandal, Day 1274:   Koskinen Says It Is Time To 'Move Beyond' The Scandal And Restore The IRS's Budget

IRS Logo 2Bloomberg BNA, We Can’t Afford’ More IRS Budget Cuts, Koskinen Proclaims:

IRS Commissioner John Koskinen is fired up about what he sees as crippling budget reductions, and he isn’t being shy about showing it.

Koskinen spent nearly 10 minutes today laying out the massive risks of future budget cuts to the agency, and describing his plan to remind members of Congress during future appropriations processes just what could happen if the IRS doesn’t receive an injection of funds. Agency funding is down $900 million since 2010. ...

Members of Congress—who will likely tackle a massive, year-end funding package in December—need to understand that a starving IRS can’t provide the government with the money it needs to function, Koskinen said. The agency is down 5,000 revenue agents and criminal investigators from six years ago, he said, and it can give back anywhere from four to 10 times the amount of money it’s given in terms of additional revenues.

Koskinen also had strong words for the members of Congress who are continuing to punish the agency for the years-old scandal involving scrutiny of groups applying for tax exemptions. Fury from some Republican lawmakers has continued since. Several members of the hard-right House Freedom Caucus say Koskinen, who wasn’t at the IRS at the time, deserves to be impeached over the matter, and they almost succeeded in bringing the issue to a House floor vote earlier this fall.

“My hope is at some point we can move beyond some of the problems of the past. The whole c4 issue and the IG’s report was three and a half years ago, and my hope is over time we’ll be able to convince people that we’ve taken all the recommendations anyone has made in the investigative area, and from the Senate Finance Committee, and we are committed to ensuring the mistakes never happen again. They shouldn’t have happened, I think it was a bad mistake, and it unfairly treated a whole set of organizations that got put up in long delays,” he said.

“My hope is as we move beyond that we can then have a more direct discussion about the resource needs of the agency.”

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November 3, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (10)

Wednesday, November 2, 2016

The IRS Scandal, Day 1273:  Harry Reid And James Comey

IRS Logo 2American Thinker, Liar Reid Slams Comey:

Chutzpah has a new poster child and his name is Harry Reid. The man who stood idly by as the IRS used its ultimate power to target the Tea Party and other groups in 2012 in order to reelect President Obama, the man who lied on the Senate floor about GOP presidential nominee Mitt Romney, now claims that FBI Director James Comey violated the Hatch Act by fulfilling his obligation to notify Congress regarding new evidence in the Hillary email investigation. ...

Harry Reid wasn’t quite so outraged when another government agency with three letters, the IRS, decided to use its power to target and intimidate Tea Party and other conservative groups. As Politico reports, Reid thought groups that merely exercise their right to bind together in common cause to exercise their free speech rights deserved to be targeted and investigated by a politically motivated IRS:

After accusations that the IRS targeted conservative groups unfairly, Senate Majority Leader Harry Reid argued on Tuesday that some nonprofit organizations are indeed abusing their tax-exempt status.

The Nevada Democrat singled out GOP strategist Karl Rove as an abuser of the system because his tax-exempt group, Crossroads GPS, spent millions on the 2012 election to defeat Democrats….

“His organization, Rove’s organization, [has] one purpose and one purpose only and that’s to defeat Democrats. Anyone who thinks otherwise is being willfully foolish,” Reid said. “Preventing overtly political groups like the ones run by Karl Rove as masquerading as social welfare organizations, is really a critically important tasks.”

Rove’s group was one that several Democrats singled out in 2010, when they asked the IRS to investigate whether they were violating their tax exempt status.

Wasn’t the attempt by Lois Lerner and her cronies, in a scandal that also involved lost or deleted emails, conveniently crashed hard drives, etc. to target conservative groups a political move by government employees to influence an election?

House and Senate Democrats, it has been documented, often sent letters to the IRS asking that particularly successful and annoying groups be investigated. As Investor’s Business Daily noted:

Senate Democrats, including supporters of the Disclose Act, provided the names of groups they wanted targeted in a taxpayer-funded witch hunt overseen by an IRS employee and Obama campaign donor.

Using the Citizens United case as a pretext, retiring Sen. Carl Levin, D-Mich., on July 27, 2012, wrote IRS Commissioner Douglas Shulman to investigate 12 conservative groups he accused of violating their tax-exempt status and engaging in coordinated political activity.

The groups Levin asked to be targeted for special scrutiny were Crossroads Grassroots Policy Strategies, Priorities U.S.A., Americans Elect, American Action Network, Americans for Prosperity, American Future Fund, Americans for Tax Reform, 60 Plus Association, Patriot Majority USA, Club for Growth, Citizens for a Working America Inc. and the Susan B. Anthony List. ...

Democratic Sens. Jeanne Shaheen, New Hampshire; Tom Udall, New Mexico; and Al Franken, Minnesota; sent a similar letter to Shulman in February 2012, asking the IRS to investigate tax-exempt groups they believed were engaged in political activities. So did retiring Sen. Max Baucus, D-Mont., in 2010 and House Democrats in 2012, the Atlantic reported Monday.

And on the House side, Congressional Democrats were hardly reluctant to have the IRS target conservative groups: Coordination by Rep. Elijah Cummings with the IRS to target conservative was also noted by IBD:

Of particular interest to us has been Rep. Elijah Cummings, D-Md., ranking member on Rep. Darrell Issa's House Government Reform and Oversight Committee, who has made every effort to keep the committee from finding out the true extent of IRS corruption and abuse of power in its targeting of conservatives.

As we've noted, emails released by Issa, a California Republican, show that Cummings' Democratic staff had requested information from the IRS' tax-exempt division, the one headed by Lois Lerner, on True the Vote, a conservative group that monitors polling places for voter fraud and supports the use of voter IDs, something that Cummings opposes.

"The IRS and the Oversight Minority made numerous requests for virtually identical information from True the Vote, raising concerns that the IRS improperly shared, protected taxpayer information with Rep. Cummings' staff," the Oversight panel said in a statement.

The hypocritical Democrats doth protest too much. They are the ones who have sanctioned abuse by government agencies to influence elections.

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November 2, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Tuesday, November 1, 2016

The IRS Scandal, Day 1272:  Why The IRS Scandal Still Matters To Republicans And Democrats

IRS Logo 2Commentary: The IRS Scandal Still Matters, by Jonathan S. Tobin:

Years after the Internal Revenue Service scandal broke and long after the media lost interest in the agency’s practice of subjecting conservative groups to special scrutiny and delays, the government is quietly seeking to bury it. A ruling from a federal judge earlier this month demanding that the IRS finally resolve stalled applications for non-profit status has gotten results.

Many of these small groups often affiliated with the Tea Party movement have now been granted the designation they needed to begin fundraising. Among them was Z Street, a pro-Israel group whose tax exemption request dated back to 2010. While the resolution seems to be satisfactory, the result is actually anything but. Rather than a belated triumph for justice, what has happened here is quite the opposite.

Though the Z Street litigation preceded the general outrage about the revelations about the IRS’s discrimination broke in the spring of 2013, it opened a window into the way the supposedly apolitical tax agency operated. IRS personnel didn’t just make Z Street jump through hoops unknown to groups that were not associated with causes opposed by the Obama administration. An IRS agent specifically told Z Street founder Lori Lowenthal Marcus that the government gave “special scrutiny” not only to pro-Israel organizations but also to those that advocated views that “contradict those of the administration’s.”

Though the government fought a long battle to prevent Z Street—which is sympathetic to Israel’s settlement movement—from suing to recover its rights, the courts consistently upheld its right to do so. But thanks to a separate court ruling, the IRS has now waved the white flag on this case and dozens of others that all involved agents opposing or stalling requests from non-profits similarly linked to positions that were not favored by President Obama.

No one should think justice has really been done. After years of being dormant because of its inability to raise money that could be deducted as a charitable donation, Z Street has probably been dead in the water too long to recover. The same is probably true for the other “winners” in this battle. More to the point, whatever influence their educational efforts might have achieved had they been allowed to function effectively has been lost. Considering that most of these groups sought to promote ideas (though not parties or politicians) on which the 2012, 2014, and now the 2016 elections were fought, there’s no denying the fact that they were effectively silenced by a band of officious government bureaucrats pursuing the liberal agenda of the Obama administration.

Though there is still no proof that the IRS agents were acting on direct orders of the White House, their willingness to behave in this matter advanced the president’s political interests in a way that ought to stir bipartisan outrage. Unfortunately, neither Democrats nor the president’s faithful liberal media were able to see past their partisan loyalties to take effective action. Indeed, as we head toward the election of our next president, the IRS scandal has been sent down a memory hole and is largely forgotten. This wasn’t the first time the IRS has been used to advance a partisan agenda, but it isn’t likely to be the last. There is no reason to think that the pattern might not be repeated in the future once the dust settles. ...

This is not an issue on which conservatives and liberals ought to be divided. A government that is allowed to play fast and loose with the basic rules of fairness to disadvantage conservatives or friends of Israel could easily be employed by different people to discriminate against liberals. That’s why the IRS scandal still matters. Let’s hope the courts don’t close the file on this issue before genuine accountability is provided.

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November 1, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, October 31, 2016

The IRS Scandal, Day 1271: President Obama Lied About The IRS’s Targeting Of Conservatives

New York Post op-ed: Obama Told Us He’s Honorable — But He’s Just Another Liar, by Kyle Smith:

At least President Obama is honest. Or so goes the common perception. He tried, maybe he made mistakes, the other side was mean to him, but through it all, he didn’t lie.

That view got smithereened this week. It was always hard to believe the president’s repeated claim that he didn’t know his own secretary of state was using an off-the-books e-mail server to avoid public scrutiny, in the process virtually guaranteeing that she would commit multiple felonies by taking classified information into the open.

Now we know Obama was lying. His own aides said so, in e-mails uncovered by WikiLeaks and made public this week. ...

Obama lied about the IRS’s targeting of conservatives, even contradicting his own statements that the harassment was “inexcusable” and made him “angry” on May 15, 2013. Less than a year later, when the heat was off, he said there was “not even a smidgen of corruption” and the IRS’s vendetta against right-leaning groups was totally excusable as a bureaucratic snafu.

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October 31, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Sunday, October 30, 2016

The IRS Scandal, Day 1270: Why The IRS Matters This Election

IRS Logo 2Seattle Times, Why It Matters: IRS:

The Issue:
The Internal Revenue Service touches everyone, not just taxpayers but anyone who receives a government check, drives on roads made possible by tax revenue or sends a child to a school helped by Washington. It’s a touch that can come with a heavy hand, in the eyes of critics who believe the agency’s far-reaching powers are abused and the agency needs to be cut down to size.

Why It Matters: ...
With some 90,000 employees, a massive stockpile of information on citizens and powers to dig deep into the lives of those it decides to investigate, the IRS is in the face of Americans like no other agency. That’s become even more so since it was handed the job of enforcing the mandate that people carry health insurance.

The potential for abusing power is obvious, and it has happened — most vividly at the hands of President Richard Nixon but also in the administrations of John Kennedy, Franklin Roosevelt and more, historians say.

During the Obama administration, the IRS has acknowledged mistreatment of tea party groups by subjecting them to excessive scrutiny in their bid for tax-exempt status. But investigations by the Justice Department and the IRS’ independent inspector general found no evidence that actions against the conservative groups were politically motivated.

Koskinen took over after the IRS actions in question but has not been clear of the controversy. Conservative lawmakers pressed unsuccessfully to impeach him, accusing him of lying to Congress, not answering subpoenas and overseeing an agency that destroyed documents in the tea party case. He denied the accusations and told lawmakers that when he testified in June 2014 that no documents had been destroyed since congressional investigations began, he didn’t know that IRS workers had mistakenly destroyed backup tapes bearing thousands of emails.

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October 30, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Saturday, October 29, 2016

The IRS Scandal, Day 1269: The Dark Art Of Political Intimidation

KS

Power Line, FREE KIM STRASSEL!:

YouTube has restricted Kim Strassel’s PragerU short course on The Intimidation Game. It’s almost like they want to prove her point

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October 29, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Friday, October 28, 2016

The IRS Scandal, Day 1268: Sen. Whitehouse — Republicans Are Using Koskinen Impeachment To Bring IRS To Heel On Dark Money Campaign Financing

IRS Logo 2The Hill op-ed: The Republican Mission to Quell the IRS, by Sen. Sheldon Whitehouse (D-RI):

It looks like any other slick political ad on your TV. There’s ominous music, a dramatic voice-over, a grainy picture of President Obama. But this isn’t just another campaign commercial.

The news broke recently that a Republican mega-donor plans to spend about $1 million a week on ads calling on Congress to impeach John Koskinen, the commissioner of the IRS. It seems like an odd way to spend your millions. While it’s true that the IRS is the right’s favorite whipping boy, why the campaign-style ad blitz?

Well, in my years as a prosecutor, it’s become a habit to consider motive. So it got me thinking: What motive do the Republicans have to impeach the IRS commissioner? Maybe it’s just emotional acting-out against an agency they hate because it collects the taxes they hate. Maybe it’s an outbreak of political madness.

Or maybe there is method to their madness.

Let’s look at the Republican Party and how it is funded. While it raises a healthy amount for its campaign committees, Republicans and their allies depend increasingly on the super PACs and shadowy outside spending groups made possible by the Supreme Court’s 2010 Citizens United decision. ...

An under-funded and harried IRS has been unwilling to police the activities of powerful social welfare groups after an effort to separate out new applicants blew up in its face. In 2013, the IRS signaled it would begin the process of drafting a rule to better enforce our laws limiting dark money in elections. It later put the rulemaking process on hold after an especially loud outcry from conservative groups. The agency also came under heavy fire in the press from conservatives and Republicans in Congress who feared having the hose to their political oxygen crimped. And since Republicans took control of the House of Representatives in 2011, they’ve worked to slash the IRS budget. Funding in 2016 was $11.2 billion, or 17 percent below 2010 levels, adjusted for inflation.

So the dark-money floodgates remain wide open, deluging our politics in special-interest slime.

The GOP’s crusade against Commissioner Koskinen may seem overblown, but it makes a lot of sense when you consider motive: Republicans need dark money, and dark money needs a cowering IRS.

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October 28, 2016 in IRS News, IRS Scandal, Political News, Tax | Permalink | Comments (5)

Thursday, October 27, 2016

The IRS Scandal, Day 1267: Court Orders IRS to Give Account For Targeting Conservatives

IRS Logo 2One News Now, IRS to Give Account for Targeting Conservatives:

A Christian legal group recently scored a legal victory against the IRS, which was ordered to issue outstanding determinations and answer for its political targeting of conservative groups and citizens to whom it unjustly denied tax exemptions for years. ...

The American Center for Law and Justice (ACLJ) was pleased to announce last week its latest victory against the agency many Americans love to hate. “Three years after we filed a lawsuit on their behalf – and for some, nearly seven years after they submitted their applications for tax-exempt status – the grassroots conservative groups that were targeted by the IRS for their political views are finally receiving some of the relief to which they have long been entitled – determinations on those applications.”

After the IRS refused to change its unlawful discriminatory dealings with conservatives by continuing its abuse of the system through punishing those not embracing the administration’s Leftist politics, the lawsuit filed against it pressed forward in the courts.

“In early August, the federal appellate court for the District of Columbia Circuit held that the plaintiffs who filed suit in Linchpins of Liberty, et al. v. United States, et al. in 2013 had set forth allegations sufficient to obtain actual evidence about the IRS’s targeting of conservative tax-exempt applicants based on their names and political positions,” the ACLJ reported. “The D.C. Circuit thus reversed the decision of the district court (which had previously dismissed the claims on the grounds that the IRS had apparently ceased the targeting conduct) and sent the case back to the lower court, explaining that the IRS had failed to demonstrate that either the targeting scheme, or its effects on plaintiffs, had actually ended.”

ACLJ Chief Counsel Jay Sekulow maintains that the court was no longer willing to allow the IRS to drag its feet – ordering it provide information about its alleged shady dealings targeting conservative groups over the years. “[Earlier this month], District Judge Reggie B. Walton held a status conference to resume the lower court proceedings in the case,” Sekulow announced. “While the IRS’s attorney, once again, took the position that most of the claims are moot because most of the plaintiff organizations have received determinations, the court picked up where the D.C. Circuit left off, and ordered that the IRS cease delaying determinations on any outstanding tax-exempt applications of Tea Party groups and other grassroots organizations. He gave the IRS 30 days to comply.”

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October 27, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, October 26, 2016

The IRS Scandal, Day 1266: Obama Denies Any ‘Major Scandals’ In His Administration — What About The IRS Scandal?

IRS Logo 2The Daily Signal, 9 Controversies Obama Didn’t Mention When He Denied Any ‘Major Scandals’:

President Barack Obama discarded eight years of controversies surrounding his administration, including the targeting of conservative groups, veterans lacking health care, the administration’s response to a terrorist attack weeks before the 2012 election, and a botched gun sting.

During a Democratic fundraising event in San Diego Sunday, Obama attacked Rep. Darrell Issa, R-Calif., the former chairman of the House Oversight and Government Reform Committee, for the various investigations into the administration.

“Here’s a guy who called my administration perhaps the most corrupt in history, despite the fact that actually, we have not had a major scandal in my administration,” Obama told Democratic donors. ...

Here’s a list of nine controversies that Obama didn’t mention at the Democratic fundraiser, but that nevertheless leave many unanswered questions. ....

1. IRS Targeting Scandal

In 2013, Lois Lerner, former director of the IRS Exempt Organizations division, admitted that officials in the IRS’ Cincinnati office acted improperly. The move was meant to preempt the release of a Treasury Inspector General for Tax Administration, which found a sustained targeting of conservative groups applying for tax-exempt status.

Lerner asserted her innocence in the matter before the House Oversight and Government Reform Committee, then invoked her Fifth Amendment rights against self-incrimination to avoid cross-examination of her claims. The House voted to find her in contempt of Congress.

Justice Department prosecutor Barbara Bosserman, who had donated $6,750 to Obama’s campaign and the Democratic National Committee from 2004 to 2012, investigated the matter and declined to bring up charges.

House investigators did not find a direct link from the White House to the IRS scandal.

The Justice Department was aware of the matter two years before Congress and took no action, according to documents obtained by the government watchdog group Judicial Watch through the Freedom of Information Act.

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October 26, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, October 25, 2016

The IRS Scandal, Day 1265: Treasury & IRS CIOs Receive IT Leadership Awards

IRS Logo 2Sonny Bhagowalia (Deputy Assistant Secretary for Information Systems & Chief Information Officer, U.S. Treasury Department) and Gina Garza (Chief Information Officer, IRS) received 2016 FedScoop 50 Leadership Awards. From an internal IRS memo (sent to me by a reader, who says he an IRS IT subcontractor):

Congratulations to CIO Gina Garza and Treasury CIO Sonny Bhagowalia for winning a 2016 FedScoop 50 award. Gina and Sonny were both recognized in the Federal Leadership category.

The FedScoop awards honor the federal and industry leaders who made significant contributions in the areas of cybersecurity and technological modernization. More than 340,000 votes were cast over the one-month voting period to narrow the field to 50 from the more than 1,000 original nominees.

"Receiving this award is such a great honor for me, IT and the IRS. It shows that we are recognized among our governmental technology-sector peers for the great work we do," said Gina.

Congratulations to Gina and Sonny.

From my reader (the IRS IT subcontractor):

"Cybersecurity" in this case being keeping emails from prying Congressional eyes, and "technological modernization" being spending $12 million on an email system that the IRS can't use. Or maybe "recycling" backup tapes on an accelerated schedule.

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October 25, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Monday, October 24, 2016

The IRS Scandal, Day 1264: Light Meet Tunnel

IRS Logo 2Politico Morning Tax, Light Meet Tunnel:

The Albuquerque Tea Party and Unite In Action should get a ruling on their tax-exempt status one way or another next month, under a recent order from a federal court. Judge Reggie B. Walton ordered the IRS to make a final decision on the groups’ status by Nov. 11, which will be more than six years after the organizations applied for a tax exemption. As our Toby Eckert notes, the fact that those groups still hadn’t heard from the IRS played a role in the revival of a lawsuit filed by the American Center for Law and Justice on their behalf. A lower court had tossed the suit a couple years ago, finding that the IRS was no longer improperly scrutinizing tea party groups.

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October 24, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Sunday, October 23, 2016

The IRS Scandal, Day 1263: The Denial Of Probe Into IRS Disclosure Of Taxpayer Information Is ‘Alarming’

IRS Logo 2Bloomberg BNA, Denial of Probe Into IRS Disclosure ‘Alarming,’ Group Says:

The dismissal of an investigation into the IRS’s disclosure of protected taxpayer information by a government watchdog is “alarming,” a conservative group said.

The Cause of Action Institute in June asked the Department of Justice Inspector General and the Treasury Inspector General for Tax Administration to “examine potential legal violations arising from the October 2010 disclosure of more than one million pages of tax returns and return information to the FBI and DOJ Public Integrity Section by” the Internal Revenue Service and former agency official Lois Lerner, the group said in an Oct. 20 news release.

As part of the request, the institute asked that the DOJ watchdog examine whether the Federal Bureau of Investigation and DOJ employees violated taxpayer confidentiality laws by inspecting the disclosed data.

The DOJ Inspector General responded in an Oct. 12 letter signed by Daniel C. Beckhard, assistant inspector general for the Oversight and Review Division. It appeared that some protected taxpayer information was included on compact discs that the IRS provided to the department, the inspector general said, but when the department learned of that disclosure, it returned the CDs to the IRS and informed Congress.

“Given the absence of available information suggesting that Department employees over whom our Office has jurisdiction might have engaged in conduct that violates laws, regulations, or policy, we have determined that this matter does not warrant further investigation,” Beckhard said in the letter, which was attached to the CoA Institute’s news release.

The CoA Institute said it has filed a Freedom of Information Act request with the DOJ watchdog to “determine the exact nature of its notification to Congress.” ...

“The DOJ IG’s response is concerning,” said John J. Vecchione, vice president at the CoA Institute. “While admitting that the IRS did, in fact, disclose confidential taxpayer information, the IG failed to address the absence of any proper requests for disclosure from the DOJ,” he said. “Even more alarming, the IG refused to conduct an investigation into legal violations because of the ‘absence of available information,’ ” Vecchione said.

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October 23, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (16)

Saturday, October 22, 2016

The IRS Scandal, Day 1262: Z Street Receives 501(c)(3) Tax-Exempt Status, Seven Years After Filing Application

IRS Logo 2Politico Morning Tax, Welcome to the Club, Z Street:

The conservative, pro-Israel group was just granted its tax-exempt 501(c)(3) status, almost seven years after it first applied. Z Street had sued the IRS, making the case that its tax-exempt application drew extra scrutiny from the agency because of its disagreements with the Obama administration over Israel. Other conservatives also accused the IRS of foot-dragging, which they connected to the agency’s improper scrutiny of tea party groups. Plus, there was at least one guy popular with Democrats who gave the IRS poor marks for its handling of the application: Judge Merrick Garland, now President Barack Obama’s pick for the Supreme Court, who heaped scorn on the IRS’s argument that it had a cushion protecting it from the lawsuit.

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October 22, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, October 21, 2016

The IRS Scandal, Day 1261: George Will And Donald Trump Are Wrong — Elections Are Not Rigged, And The IRS Is Not Rigging Them

IRS Logo 2Salon, George Will Says Donald Trump Is Simply Making the Wrong Argument About Rigged Election, Is Incredibly Wrong:

George Will is a fan of voter purging. He's also an old white male. That explains it.

As most of the conservative fold realizes that conspiracy theorist Donald Trump is Godzilla and the Republican Party is Tokyo, George Will is dipping his toes into the Pacific Ocean and thinking, maybe there’s something here.

On Monday, Will told Fox News that Trump “has a point” when he claims that the election is rigged, according to a transcript via RealClearPolitics:

It is hard to think of an innocent reason why Democrats spend so much time, energy and money, scarce resources all, resisting attempts to purge the voter rolls, that is to remove people who are dead or otherwise have left the jurisdiction. It’s hard to think of an innocent reason why they fight so tremendously against Voter I.D. laws. They say, well, that burdens the exercise of a fundamental right. The Supreme Court has said that travel is a fundamental right and no one thinks that showing an I.D. at the airport burdens that fundamental right.

We know — we don’t surmise — we know that the 2010, ’12 and ’14 elections were rigged by the most intrusive and potentially punitive institution of the federal government, the IRS. 

First of all, the election is not rigged. This can’t be stressed enough. Also, if Will is claiming that the 2010 and 2014 elections were rigged (they weren’t), they would have been rigged for Republicans, who during the midterms rode two wave elections.

And we’ll completely ignore his claim that “vote rigging” includes Internal Revenue Service audits of whether 501(c)4 organizations are really “promot[ing] the social welfare” — or existing to create valuable and profitable email lists for others to rent.

But here’s the reason why Democrats “spend so much time, energy and money” resisting attempts to purge the voter rolls. Because most of the time, that’s code for “making sure lots of Democrats don’t vote.” ...

Republicans have pushed illegal voter ID laws and have pursued a questionable tactic known as “voter caging.” Even if the people affected by these voter-suppression strategies are able to get to the polls, they would have to file provisional ballots and could face longer lines in fewer polling places. Such tactics, unsurprisingly, have mainly been applied in minority areas.

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October 21, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Thursday, October 20, 2016

The IRS Scandal, Day 1260: Cleta Mitchell — Use Of The IRS Against Republican Critics Likely Will Persist In A Clinton Administration

IRS Logo 2Washington Times op-ed:  Hillary Clinton’s IRS — A Sneak Preview: Use of the Agency Against Republican Critics Likely Will Persist, by Cleta Mitchell  (Foley & Lardner, Washington, D.C.):

Imagine:  What if the Internal Revenue Service (IRS) singled out hundreds of grassroots citizens groups across the nation and subjected them to ill treatment because of their political beliefs and values, mainly in opposition to the president of the United States? And imagine if that president ordered an investigation of the scandal and the lead attorney was a maximum donor to the president’s political campaigns. And then imagine if the president appointed as IRS commissioner to “clean up” the scandal someone who was a maximum donor to the president’s political campaigns. Can you imagine such a thing? The watchdogs in Congress and the media would never allow such clear partisanship to rule the IRS, right?

But that is exactly the situation we have watched unfold over the past three years, since the Treasury inspector general for tax administration (TIGTA) confirmed that the IRS had, indeed, targeted conservative groups — hundreds of them — for singular mistreatment and abuse. The Department of Justice attorney charged with “investigating” the targeting was Barbara Bosserman, an individual who had contributed the maximum to President Obama’s political campaigns.

And what about IRS Commissioner John Koskinen? He is yet another maximum Democratic donor. Since 1997, Mr. Koskinen has contributed $51,550 to the Democratic National Committee, various Democratic congressional and Senate candidates and the presidential campaigns of John Kerry, Barack Obama and Hillary Clinton. ...

What harm might arise from having one of Hillary Clinton’s staunchest supporters at the helm of the IRS? Think back. During the Bill Clinton administration, the IRS audited a host of Clinton “enemies”: According to the Christian Science Monitor, the Clinton-era IRS, like several before it, audited a wide range of organizations viewed as hostile to the White House agenda. These included leading conservative publications, think tanks and interest groups, among them the American Spectator, Judicial Watch, National Review, the Heritage Foundation, the National Rifle Association, the National Center for Public Policy Research, the American Policy Center, American Cause, Citizens for Honest Government, Citizens Against Government Waste, Progress and Freedom Foundation, and Concerned Women for America. The IRS also audited two Clinton paramours: Gennifer Flowers and Liz Ward Gracen, and sexual assault accusers Paula Jones and Juanita Broaddrick, as well as fired White House Travel Office Director Billy Dale.

There was never anyone in the IRS held to account for the Clinton administration’s targeting of its perceived “enemies” for IRS audits; there has likewise been no accountability for the oppression and discrimination practiced by Mr. Obama’s IRS via the targeting of those groups who have opposed and criticized the Obama administration.

Nor has Congress taken steps to prohibit the IRS from using donor information as a basis for generating IRS tax audits, and there is ample evidence that the IRS audited scores of donors to the 2012 Mitt Romney presidential campaign and the super PAC supporting Mr. Romney.

A Hillary Clinton presidency, with a maximum Clinton donor running the IRS, would not bode well for conservative organizations, donors, activists and sympathizers. ... 

As long as the liberal media and congressional Democrats collude with Democratic administrations in their targeting and attacking of conservatives, the Democrats in the White House will feel free to use the agencies of the federal government — including the IRS — as political weapons against those who criticize and disagree with them.

A Hillary Clinton presidency, with an IRS commissioner who has long been an ardent political supporter and donor, does not present a very encouraging picture of a non-political IRS that will resist being used as an arm of the Democratic White House.

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October 20, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (7)

Wednesday, October 19, 2016

The IRS Scandal, Day 1259: George Will — Trump Is Right That Elections Are Rigged, And The IRS Is Exhibit A

IRS Logo 2Real Clear Politics, George Will: Trump Has Point That Elections Are Rigged If He Would Just Make It More Clearly:

When Mr. Trump talks about it being rigged, he sweeps all his grievances into one big puddle. He talked about the media. He talked about the primaries. He talked about the polls. Talked about the Republican National Committee. I think when most persons hear that an election is rigged, they think of government action to rig the election. And there Mr. Trump has a point if he would just make it more clearly. 

It is hard to think of an innocent reason why Democrats spend so much time, energy and money, scarce resources all, resisting attempts to purge the voter rolls, that is to remove people who are dead or otherwise have left the jurisdiction. It's hard to think of an innocent reason why they fight so tremendously against Voter I.D. laws. They say, well that burdens the exercise of a fundamental right. The Supreme Court has said that travel is a fundamental right and no one thinks that showing an I.D. at the airport burdens that fundamental right.

We know -- we don't surmise -- we know that the 2010, '12 and '14 elections were rigged by the most intrusive and potentially punitive institution of the federal government, the IRS. You can read all about it in Kim Strassel's book Intimidation Game. She's familiar to all Wall Street Journal readers and FOX viewers. This is not a surmise. I have talked to lawyers in a position to know they say it's still going on. The IRS is still intolerantly delaying the granting of tax exempt to conservative advocacy groups to skew the persuasion of this campaign.

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October 19, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Tuesday, October 18, 2016

The IRS Scandal, Day 1258: Judge Orders IRS to Clear Tea Party Application Backlog Within Month

IRS Logo 2American Center for Law and Justice, Major Victory: IRS Ordered to Issue Outstanding Determinations & Answer for Political Targeting of Citizens:

Three years after we filed a lawsuit on their behalf, and for some, nearly seven years after they submitted their applications for tax-exempt status, the grassroots conservative groups that were targeted by the IRS for their political views are finally receiving some of the relief to which they have long been entitled—determinations on those applications.

In early August, the federal appellate court for the District of Columbia Circuit held that the plaintiffs who filed suit in Linchpins of Liberty, et al. v. United States, et al. in 2013 had set forth allegations sufficient to obtain actual evidence about the IRS’s targeting of conservative tax-exempt applicants based on their names and political positions. The D.C. Circuit thus reversed the decision of the district court (which had previously dismissed the claims on the grounds that the IRS had apparently ceased the targeting conduct) and sent the case back to the lower court, explaining that the IRS had failed to demonstrate that either the targeting scheme, or its effects on plaintiffs, had actually ended.

Last week, District Judge Reggie B. Walton held a status conference to resume the lower court proceedings in the case. While the IRS’s attorney once again took the position that most of the claims are moot because most of the plaintiff organizations have received determinations, the court picked up where the D.C. Circuit left off, and ordered that the IRS cease delaying determinations on any outstanding tax-exempt applications of Tea Party groups and other grassroots organizations. He gave the IRS thirty days to comply.

It will be seven years this December since one of our clients awaiting a final determination – Albuquerque Tea Party – submitted its tax-exempt application. Another client – Unite in Action – has been waiting six and a half years since filing its application in May 2010. As a result of Judge Walton’s order, these years-long application processes are finally concluding, and the organizations are receiving the review and determinations they deserve. This is a major victory.

Judge Walton also agreed with our position, affirmed by the appellate court, that the IRS cannot obtain dismissal of the case simply by issuing the remaining determinations but must also produce evidence showing that any negative effects of the targeting on plaintiffs have been completely and irrevocably eradicated. Specifically, we urged, and the court agreed, the IRS must answer such questions as: What was the determination process prior to the targeting? How and why did the targeting begin? What treatment did plaintiffs’ applications receive during the targeting? What assurances are currently in place that plaintiffs will not suffer further retaliation or discriminatory treatment at the hands of the IRS?

As a result of this order, the IRS will, at long last, be required to disclose the details of the lawless and unconstitutional Tea Party targeting scheme. The court’s requirement that the IRS give account for its conduct is a tacit acknowledgment that plaintiffs—as well as the American public—deserve honesty and transparency from their government.

We are pleased that the court has taken this first step and look forward to a resolution of this case that will hopefully include the first judicial acknowledgment of the unmistakably unconstitutional nature of the IRS’s egregious political targeting of U.S. citizens.

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October 18, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (9)

Monday, October 17, 2016

The IRS Scandal, Day 1257

IRS Logo 2Lima News editorial: Jim Jordan Is the Conscience of Conservatives:

U.S. Rep. Jim Jordan’s growing stature on Capitol Hill makes him an easy choice for re-election in the 4th Congressional District over Democrat Janet Garrett. ...

Another hearing saw him push for impeachment proceedings against IRS Commissioner John Koskinen, saying the IRS leader lied to Congress.

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October 17, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Sunday, October 16, 2016

The IRS Scandal, Day 1256: The IRS Spent $12 Million For Microsoft Cloud-Based Email Archive That Was Incompatible With Its On-Premises Email System And Never Used

IRS Logo 2Treasury Inspector General for Tax Administration, Review of the Enterprise E-Mail System Acquisition (2016-20-080):

The IRS currently maintains an on-premises e‑mail environment that does not have archive capability. The existing system hardware is approaching manufacturer end-of-support and is experiencing numerous failures resulting in a significantly increased workload on enterprise e‑mail support staff. If the IRS does not efficiently upgrade its e-mail environment, it could adversely affect the IRS’s ability to effectively perform tax administration.

The IRS purchased subscriptions for an enterprise e-mail system that, as it turned out, it could not use. The purchase was made without first determining project infrastructure needs, integration requirements, business requirements, security and portal bandwidth, and whether the subscriptions were technologically feasible on the IRS enterprise.

IRS Information Technology organization executives made a management decision to consider the enterprise e-mail project an upgrade to existing software and not a new development project or program. Therefore, the Information Technology organization did not follow the Internal Revenue Manual Enterprise Life Cycle guidance. The IRS authorized the $12 million purchase of subscriptions over a two-year period between June 2014 and June 2016. However, the software to be used via the purchased subscriptions was never deployed.

Figure 1

The IRS may have violated the bona fide needs rule when it purchased the subscriptions using Fiscal Years 2014 and 2015 appropriations and did not deploy the software subscriptions in those years. In addition, the IRS violated Federal Acquisition Regulation requirements by not using full and open competition to purchase these subscriptions.

Bloomberg BNA, IRS Wasted $12 Million on Failing E-Mail System, IG Reports:

Lacking the ability to archive all e-mails on site is especially troubling considering the blowback the agency has faced for the last several years, Douglas Mancino, a partner at Seyfarth Shaw LLP told Bloomberg BNA today. Members of the House Freedom Caucus are vying to impeach the IRS commissioner, saying he misled Congress and alleging the agency destroyed e-mails showing evidence of its scrutinizing of conservative groups. The agency’s records retention was also at the heart of a recent lawsuit (Judicial Watch, Inc. v. IRS, D.D.C., No. 1:13-cv-01559).

The IRS strongly disagrees with the notion that it wasted taxpayer dollars or didn’t follow appropriate practices, Gina Garza, the chief information officer, said in a response letter included in the report. “The IRS takes seriously our obligation to manage taxpayer dollars in the most efficient and effective manner possible,” she said. “The IRS remains committed to continuously improve our IT systems and processes.”

But Mancino differed. “The IRS expects taxpayers to have record-retention policies that extend for years, particularly for major corporate records, including when they’re maintained in electronic format. One would think the IRS itself would think along the same lines and have the same policies, especially in the environment of the last five or six years,” he said. The findings show mismanagement and spending that would be considered “a career-limiting move” in the corporate world, he said.

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October 16, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Saturday, October 15, 2016

The IRS Scandal, Day 1255

IRS Logo 2Government Executive, White House Accused of Bypassing Rules on Access to Taxpayer Information:

In the latest in a long effort to prove White House interference with the Internal Revenue Service, the right-leaning legal group Cause of Action Institute released a 67-page investigative report saying President Obama has “circumvented the congressionally created and authorized procedures for accessing confidential taxpayer information.”

Writing in the context of the three-year-old political controversy over alleged political “targeting” by the IRS’s Exempt Organizations division, Cause of Action explored “recent IRS misuse and unauthorized release of confidential taxpayer information and the possible role of a detailee program in the Office of the White House Counsel that may have provided access to the protected information.”

The report cites two examples of alleged political abuse of private taxpayer information. One involved a 2010 charge that then-Obama Council of Economic Advisers Chairman Austan Goolsbee in a call with reporters questioned the sufficiency of taxes paid by Koch Industries, news of which launched an inspectors general probe (never released) into whether the Kansas businessmen’s tax returns were reviewed at the White House.

A second example the legal group cited was a November 2012 instance in which the IRS allegedly gave the journalism group ProPublica “confidential application files of certain conservative groups seeking tax exempt status.”

The Obama team allegedly accomplished the interference by “relying on individual consent forms that were never intended for use by the president,” Cause of Action wrote. “The practice has allowed the president to avoid the reporting requirements and limitations placed on presidential access to taxpayer information by the Tax Reform Act of 1976.”

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October 15, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, October 14, 2016

The IRS Scandal, Day 1254

IRS Logo 2The Daily Caller, Obama’s Tax Lawyers Had Conservative Groups’ Confidential Information:

President Barack Obama’s White House hired at least two Department of Justice (DOJ) attorneys who accessed conservative groups’ confidential taxpayer information while defending the Internal Revenue Service (IRS) during the targeting scandal.

The two were among 10 Justice Department Tax Division lawyers Obama has kept on the White House staff without taxpayer privacy training since April 2009, nonprofit government watchdog Cause of Action Institute (CofA) said in a report made public Wednesday [Presidential Access to Taxpayer Information].

Obama “is the first president to have recruited litigation specialists from the DOJ Tax Division, some of whom had knowledge of confidential taxpayer information concerning his political opponents,” the report said. “The DOJ has supplied a regular stream of Tax Division lawyers to the Obama White House for more than seven years, all without any apparent guidance or safeguards to ensure against the unauthorized disclosure of taxpayer information.”

Using Department of Justice tax lawyers may be unique to the current White House, but for “nearly as long as the IRS has existed, presidents have weaponized it against their foes,” the report said. “The Obama administration has made frequent and damaging use of the IRS as a political weapon.”

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October 14, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)