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Wednesday, September 17, 2014

The IRS Scandal, Day 496

IRS Logo 2New York Times op-ed:  Apples and Hurricanes: Obama Beyond Bush, by Frank Bruni:

Whenever Barack Obama seems in danger of falling, do we have to hear that George W. Bush made the cliff? ... The I.R.S. scandal was not as bad as Watergate. (Nothing’s ever as bad as Watergate, which serves a nifty historical function as the gold standard of executive malfeasance and mendacity.) ...

If we’re determined to glance back at a figure who flatters Obama, let’s really have at it and look all the way to Warren Harding. Golf wasn’t his only distraction. He also had a thing for poker. And when it came to seeming and feeling overwhelmed, the 29th president, an Ohio Republican, reputedly confessed to friends that he was lost in the job. By that measure Obama is a rock. But it doesn’t make him a boulder.

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September 17, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, September 16, 2014

Retired IRS Agent Pushes NY to Audit Tax Cheats

Following up on my previous posts (links below):  Albany Times-Union, Audits Sought on Tax Cheats:

New York StateFor two years, a retired Internal Revenue Service officer has been urging state officials to audit big real estate partnerships, particularly in Manhattan, to track down tax cheats owing the state hundreds of millions of dollars.

But Jerry Curnutt hasn't gotten traction at the state Department of Taxation and Finance, and he hasn't been able to impress upon the state comptroller or attorney general how big a deal the matter is. "Why are they not doing them?" he said. "The reason: Don't make waves."

David Cay Johnston, the Pulitzer-Prize winning tax reporter for the New York Times, is so sure of Curnutt's abilities in finding real estate partnership tax cheats that the journalist said he would pay $10,000 out of his own pocket to cover Curnutt's fees. Curnutt, a 77-year-old consultant from Texas who retired from the IRS in 2000, was employed by Pennsylvania for six years on such an assignment through 2008. During that time he charged the state $190,483, at $140 an hour plus expenses. The Keystone State assessed $49 million against real estate partners who had not reported gains, its tax department said. "Additionally, Curnutt helped the department develop a case involving $700 million in nonreported income," said Department of Revenue spokeswoman Elizabeth Brassell.

September 16, 2014 in IRS News, Tax | Permalink | Comments (2)

The IRS Scandal, Day 495

IRS Logo 2Wall Street Journal editorial:  Covering for the IRS:

The IRS targeting of conservative groups has now become a story about the cover-up. More than a year after the scandal became public, the most transparent Administration in history has done everything in its power to spin the story, stymie Congressional investigators and run out the clock.

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September 16, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, September 15, 2014

The IRS Scandal, Day 494

IRS Logo 2The Hill:  Rand Paul Jokes He's 'Really Worried' About Anthony Weiner:

Sen. Rand Paul (R-Ky.) poked some fun at former Rep. Anthony Weiner (D-N.Y.) over his sexting scandal on Thursday.

“How many people here have a cellphone?” Paul asked an audience in New Hampshire, according to Breitbart News. “How many people think it’s none of the government’s damn business what you have on your cellphone?”

“I’ve been thinking that’s true,” Paul continued. “But I’m really, really worried about Anthony Weiner. Because you know he likes to take his selfies, and he’s had trouble finding a place to put them where the government can’t find them. So I’m thinking maybe Anthony Weiner should put his selfie in Lois Lerner’s emails.”

New York Post:  5 Lies That Have Shaped the Obama Presidency:

3. “Not even a smidgen of corruption.”

Obama said this in response to Bill O’Reilly’s question about the IRS scandal: “You’re saying no corruption?”

If there were not even a “smidgen of corruption,” as Obama insisted, it is hard to understand what outraged him, or at least seemed to, when news of the IRS scandal first broke. “It’s inexcusable, and Americans are right to be angry about it, and I am angry about it,” Obama said in May 2013. Obama routinely expressed anger when some new scandal erupted on his watch — IRS, the failed ObamaCare website, the VA scandal, Fast and Furious — but never before had he shoved a scandal down the memory hole so quickly.

And how could Obama know there wasn’t a smidgen of corruption before the investigation was even over? Perhaps because the administration knew that any proof of that was gone with deleted e-mails and destroyed hard drives?

The Wall Street Journal Report:

Paul Gigot: New developments in the ongoing investigation into the targeting of conservatives groups by the IRS, with the tax agency revealing last week that it lost the emails of five more employees, including a senior aide to Lois Lerner, the former official at the center of the scandal. That news comes amid fresh claims by House Oversight Committee chair, Darrell Issa, that Eric Holder's Justice Department is improperly collaborating with congressional Democrats in its own IRS probe. And this time, he says he has a phone call to prove it. ...

Kim Strassel: I think what you're seeing over the past week, and especially because of the latest revelation about the Justice Department--remember, the Justice Department is supposed to be investigating this IRS scandal. And instead, what we've got as an accumulation over the last few weeks is a bunch of evidence that suggests the IRS and Justice Department and other departments of the Obama administration instead appear to have been spending the past year doing everything they possibly can to impede congressional investigators in getting to the bottom of this affair.

So not just coordinating with Democrats. We now have news about Lois Lerner's BlackBerry being wiped. This happening after Congress had already starting investigating, after the Treasury inspector general had begun his investigation. You have the emails of other critical people in this scandal gone as well, at least five of them.

You have redactions in documents that are being sent so the investigators can't actually see the core conversations. And by the way, I should also note, the only reason we even know any of this is because of outside litigation, which has enlisted the help of the judicial branch, and judicial branch has been forcing the IRS and others to come clean with some stuff. That's why we're finding out they haven't been clean with congressional investigators.

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September 15, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Sunday, September 14, 2014

The IRS Scandal, Day 493

IRS Logo 2The Blaze:  Lois Lerner Fallout: GOP Looks to Stop IRS Workers From Using Personal Email at Work:

The Republican House next week plans to take up three IRS-related bills, including one that would prevent all IRS officials from using their personal email while at work.

The issue has come up in the GOP investigation of former IRS employee Lois Lerner and her role in the IRS targeting scandal. Not only has the IRS said it lost more than two years’ worth of Lerner’s emails, but it has become clear that Lerner used her personal email for work purposes.

The legislation from Rep. Charles Boustany (R-La.) is just one simple line prohibiting this practice: “No officer or employee of the Internal Revenue Service may use a personal email account to conduct any official business of the government,” the bill reads.

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September 14, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, September 13, 2014

The IRS Scandal, Day 492

Friday, September 12, 2014

Columbia Law Prof Is Victim of a 'Practice Audit'

Philip Hamburger (Columbia), Victim of a Practice Audit:

Audit 3Over at Instapundit, I read yesterday that the IRS defended its Breitbart audit with this statement: “The IRS stresses that audits are based on the information related to tax returns and the underlying tax law — nothing else.”

Glenn aptly writes “And who could hear this without laughing?” Actually, I know from personal experience it is false, because a while back I was subject to a “practice audit.”

It began with a notice that I was being audited for my charitable contributions. This was puzzling as my contributions were entirely in cash. To be sure, I was ashamed that they were pitifully low that year, but this made the audit all the more curious. Dutifully, I trekked up from the South Side to the federal building in downtown Chicago, and my accountant came in from out of state! ...

[The IRS man] asked some perfunctory questions and then turned to my charitable contributions. He looked at my embarrassingly low contributions, he examined my proof of having made them, and then seemed to weigh some profound question of tax law. The moment of truth had arrived.

At this point, however, I could not help myself. Being a former tax lawyer, but now being merely a client, I foolishly asked the idiotically simple question that had been bugging me all along: “Why am I being audited for cash contributions?”

The IRS man looked at us. Then, calmly and without discomfort, said, “It is a practice audit.”

Instinctively, I leaned forward and exclaimed, “WH . . . .” I never finished. My accountant, a well-built guy, was a step ahead of me. I felt his left arm pushing me back into my seat, while he said, “Thank you for sharing that. I assume then that this matter is closed.” The IRS man promptly agreed and that was that. ...

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September 12, 2014 in IRS News, Tax | Permalink | Comments (4)

The IRS Scandal, Day 491

Thursday, September 11, 2014

The IRS Scandal, Day 490

IRS Logo 2Commentary:  Is Eric Holder Trying to Protect the IRS?:

[I]t looks like Holder’s Department of Justice is seeking to help the IRS and the Democrats protecting the IRS. And the only reason the public knows about it is that Holder’s office accidentally called the wrong phone. Oops.

The left’s response to the IRS targeting scandal has morphed over time as more information has come to light. Mostly gone are the truthers who think nothing unethical happened or that this is an aimless witch hunt. It’s now clear to any sentient person that the IRS was indeed engaged in this targeting scheme ahead of a presidential election. Additionally, as I wrote last week, it’s since been revealed that the IRS began destroying evidence once the investigation into the targeting began.

That particular destruction of evidence concerned Lois Lerner, the former official at the center of the scandal, in order to get rid of her email correspondence. The media yawned at the revelation of the destruction of evidence, apparently tiring of this story. So the same day of Fallon’s phone call to Issa’s staff, the IRS admitted it lost the email of “five more workers who figure in the investigation into the alleged targeting of conservative nonprofit groups,” as the Wall Street Journal reported.

The Democratic response to the investigation has thus gone from the eminently silly denial that anything untoward took place to actively trying to thwart the investigation and run interference for the IRS–which, in its targeting scheme, was only following the pronouncements of high-level congressional Democrats, after all. And those Democrats have gotten quite uncomfortable with the investigation. Democratic Sen. Carl Levin has put together a report attacking the inspector general conducting the investigation.

Such interference and/or stonewalling wouldn’t be out of character for this DOJ. As the Washington Examiner reported yesterday, according to the department’s inspector general “Department of Justice senior officials have barred or delayed the inspector general there from gaining access to documents crucial to high-visibility investigations.”

The “nothing to see here” brigade has lost any semblance of credibility. In response, they’d like to make sure there’s actually nothing to see by the time investigators come looking for it.

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September 11, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, September 10, 2014

The IRS Scandal, Day 489

IRS Logo 2Washington Post:  IRS Chief’s Legal Adviser Spread Word of Missing E-mails to Treasury Lawyer:

Internal Revenue Service Commissioner John Koskinen testified this summer that he played no part in spreading word of the agency’s controversial missing e-mails to the Treasury Department or the White House. But one of his closest advisers apparently did.

Transcripts of closed-door testimony with the House Oversight and Government Reform Committee show that IRS attorney Catherine Duval acknowledged telling Treasury legal counsel Hannah Stott-Bumsted about the matter. A Fox News affiliate first revealed the testimony in a report Monday.

Washington Post:  Issa Accuses Holder Spokesman of Attempting to ‘Conspire’ With Democrats on IRS Documents:

Attorney General Eric Holder’s communications director is being accused of calling the House Oversight Committee Republican staff and asking for help spinning a story. The twist? The GOP staff alleges that Holder’s spokesman thought he was talking to the Democrats.

Oversight Committee Chairman Darrell Issa (R-Calif.) sent a letter to Holder on Monday about the incident, saying he was “extremely troubled” that the Justice Department may have been trying to coordinate with the minority staff on the release of documents to the committee regarding the Internal Revenue Service targeting certain political groups.

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September 10, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, September 9, 2014

CPAs File Class Action Against IRS Seeking Recovery of $150 Million in Fees Paid by Tax Practitioners

Press Release, CPAs File Class Action Seeking Recovery of More Than $150 Million in Fees Collected by IRS From Tax Practitioners:

RTRPTwo certified public accountants (CPAs) filed a class action complaint in the United States District Court for the District of Columbia earlier today challenging Internal Revenue Service (IRS) regulations requiring tax practitioners to annually register and pay a fee to the agency to obtain and maintain a preparer tax identification number (“PTIN”).  The class action involves more than 700,000 individual practitioners.  It seeks an injunction barring collection of the fee and recovery of the more than $150 million in fees the IRS has collected since 2010.

The challenged regulations were issued several years ago as part of a broad IRS initiative to radically expand its oversight of attorneys, accountants, and other tax return preparers who prepare tax returns for compensation.  Earlier this year, the D.C. Circuit Court ruled that large portions of the regulations issued by the IRS were invalid because the IRS lacked statutory authority to issue the regulations. Loving v. United States, 742 F.3d 1014 (D.C. Cir. 2014). 

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September 9, 2014 in IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 488

IRS Logo 2New York Observer: Will Orange Be the New Black for IRS Chief Lois Lerner?, by Sidney Powell:

With five more Computer Crashes, a “pattern of racketeering activity” may be emerging.

Late last Friday afternoon, in a blatant “late news dump” to avoid making headlines about the Internal Revenue’s witch hunt against conservative non-profits, the IRS disclosed to Congress that five more of the IRS computers containing relevant records had mysteriously crashed. Those computers belonged to colleagues of Lois Lerner, whose conduct is at the center of the investigation.

Perhaps there is some strange computer virus that selectively trashes records inconvenient to incumbents, like the “glitch” that erased part of Nixon’s tapes. How else to explain the fact that this is the fourth announcement of an ever-expanding computer calamity connected to Lois Lerner to emerge from the IRS? First it was just Lerner’s computer that was affected, then those of her closest co-conspirators, then “no more than twenty” computers, and now an ever larger batch of burned out workstations.

Even more interesting, the IRS has apparently not yet shared this newest tidbit with Judge Emmet G. Sullivan, the distinguished and courageous jurist presiding over Judicial Watch’s Freedom of Information Act lawsuit. Judge Sullivan has made the most progress so far in uncovering the conspiracy among Lerner and friends to target, harass and illegally obtain information from conservative non-profit organizations to benefit Mr. Obama’s reelection campaign—for which the law firm of Ms. Lerner’s husband, Michael Miles, also hosted a voter registration event. ...

While the agency continues to blame “computer crashes” for the now more than 20 people whose emails are “missing,” no IRS official has yet to identify when or how each computer crashed—much less why. We know Lois Lerner’s hard drive, which was “scratched” only a matter of days after receiving a letter from Congress requesting her emails. The IRS then destroyed it. The IRS followed a year later with the destruction of her unimpaired Blackberry containing emails for the same period. As we reported first, it made no effort whatsoever to obtain information from the Blackberry—despite being well into the Congressional inquiry. That is obstruction of justice and destruction of evidence—worse than the conduct for which Leslie Caldwell, now head of the Criminal Division of the Department of Justice, destroyed Arthur Andersen LLP and its 85,000 jobs.

Any number of federal criminal statutes might apply to these facts, including Title 18 of the United States Code, Section 1343—Wire Fraud; Section 1503—Influencing officer generally; 1505—Obstruction of proceedings before department, agencies and committees; and Section 1519—Destruction, alteration, or falsification of records in federal investigations. Sections 1343 and 1503 are also predicate offenses for the federal Racketeering Statute, Section 1961, which provides that a “pattern of racketeering activity” can be proved by committing two predicate acts. These statutes are punishable by terms of imprisonment varying from five to twenty years. ...

So yet again, the IRS simply creates more questions and at least five more reasons for Judge Sullivan to name a special prosecutor. When did each of the now more than 20 computer crashes occur—by date and time? How could that possibly happen? Why did the IRS prematurely cancel its longstanding contract for backup? Why did it take this long to find out that 5 more had “crashed?” Where is the Blackberry or other device for each of the persons whose computer crashed? What servers are implicated? Whose resignations are forthcoming? Why is Koskinen still there? Who is on Emmet Sullivan’s short list to be the special prosecutor?

Evidence is mounting by the day that Lois Lerner and her co-conspirators abused the power of the sovereign, violated the trust of the people, lied to Congress, destroyed documents and evidence of their wrongdoing, and violated multiple criminal statutes.

With the revelations of this last week, Lois Lerner and the IRS might as well be sitting on a ticking bomb . . . and it’s about to explode.

Forbes:  IRS Loses Emails Of 5 More Key Employees, Including Lois Lerner's Aide, by Robert W. Wood:

The IRS announced that it lost emails from five more IRS workers relevant to the ongoing investigation into whether the IRS targeted conservative groups. It’s a new black eye for an agency that has had many. It was only a few months ago that the IRS revealed that Lois Lerner’s emails were gone.

Lerner remains the key figure at the heart of the controversy. Now, in another belated announcement, the “we lost five more too” raises new questions why no one seems to know very much. Or maybe they won’t say. When the whole mess came to light, Mr. Lerner refused to testify and was held in contempt of Congress. She could be prosecuted and face jail, though that’s unlikely.

The five employees include a senior aide to Ms. Lerner. Two of the latest 5 IRS employees with “computer crashes” worked in the Cincinnati IRS office processing applications for tax-exempt status. The Cincinnati office, it’s worth remembering, was where those “rogue” employees of the IRS were off supposedly doing their own thing without the say-so of their bosses at the headquarters of the IRS in DC.

(Image credit: grassfire.com)

(Demand an IRS Independent Prosecutor Petition available at http://grassfire.com/2014/06/irs-independent-prosecutor/. Image credit: grassfire.com)

Again blaming computer crashes, the IRS said it found no evidence that anyone deliberately destroyed evidence. But Rep. Darrell Issa (R., Calif.), chairs the House Oversight and Government Reform Committee, and he isn’t so sure.

“First it was only Lois Lerner,” Rep. Issa said. “Now we learn there are 5 others, several months after the administration supposedly came clean about email losses. To the contrary.… each of the five hard drive issues resulting in a probable loss of emails substantially predates the onset of the investigations in 2013.”

The IRS had a backup tape system, but officials have said the agency routinely recycled the tapes. Besides, some of the real juice may be in text or instant messages. In 2013 when the IRS targeting scandal was already brewing, Ms. Lerner asked an IRS IT specialist if the IRS saved texts. No, they are not automatically saved, came back the response. The IT person went on to say that saving them was possible, though, so be careful.

“Perfect,” came Ms. Lerner’s reply. Congressional investigators, Judicial Watch and others doubtless want emails and texts, especially since it now appears that there was a little more off-the-grid mentality when it came to texts. Many Republicans think former IRS official Lois Lerner knows a lot.

USA Today:  E-mails Show IRS Attempts at Damage Control:

Lerner has emerged as the central figure in the IRS' handling of tax-exemption applications by conservative groups before the 2012 election. The Exempt Organizations office she headed subjected groups with names such as "Tea Party" and "Patriots" to more scrutiny and longer wait times than similar liberal advocacy groups, according to congressional Republicans.

The Democratic-controlled Senate Permanent Subcommittee on Investigations released the documents Friday along with a report finding that mismanagement, and not political bias, was responsible for the targeting.

The documents show Lerner's efforts to persuade Treasury auditors that there was no institutional bias at the IRS, the agency's attempts to head off a damaging investigation with a pre-emptive apology, and Lerner's pep talk to her staff after the apology.

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September 9, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, September 8, 2014

The IRS Scandal, Day 487

IRS Logo 2Washington Post:  Why Did the IRS Clean Out Lois Lerner’s Blackberry as Probes Began?:

Congress had little opportunity to debate the Internal Revenue Service’s missing-e-mail controversy while on break during the past month, but lawmakers will have plenty to talk about when they return next week.

One question likely to come up is why the IRS wiped out Lois Lerner’s Blackberry shortly after congressional staffers interviewed the then-IRS official about suspected targeting of conservative groups.

So far, the IRS has provided no answer. ...

IRS attorney Thomas J. Kane said in a separate declaration that the agency “removed or wiped clean” information from the Blackberry in June 2012, shortly after congressional staffers questioned Lerner about the targeting allegations and in the same month that the IRS inspector general began examining the issue.

Kane offered no explanation for why the IRS “removed or wiped clean” the data, and the IRS did not respond to the same question when asked by The Washington Post on Wednesday.

Taxable Talk:  IRS Won’t Say Why It Erased Lois Lerner’s Blackberry, by Russ Fox:

Let’s assume you’re under a court order to find some emails. Your hard drive crashed, but you think that some of them are saved on your Blackberry. Would you:

(a) Try to find them on the Blackberry,
(b) Do nothing, or
(c) Erase the Blackberry.

If you’re the IRS, the answer is (c). After the IRS was on notice about the missing Lois Lerner emails the IRS then wiped clean Ms. Lerner’s Blackberry. ...

As Reason.com stated,

There may be a reasonable explanation for all this. But if there is, the IRS has yet to provide it, and in fact has refused when asked to do so. Combined with all the other suspicious and convenient omissions, lapses, and losses related to this case, it does make one wonder if perhaps there isn’t a reasonable explanation to be offered.

There’s nothing to add to Reason’s conclusion.

Washington Examiner:  We Still Don't Know Why Lois Lerner's Blackberry Was Wiped Clean

Glenn Reynolds (Tennessee):  Well, I Can Certainly Guess:  "At this point, I don’t think even the most credulous can really regard all this data destruction as anything other than a criminal conspiracy to cover up evidence of wrongdoing."

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September 8, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Sunday, September 7, 2014

The IRS Scandal, Day 486

IRS Logo 2Sharyl Attkisson, IRS Says It Has Lost Emails From 5 More Employees:

The Internal Revenue Service has lost emails from five more employees who are part of congressional probes into the treatment of conservative groups that applied for tax-exempt status, the tax service disclosed Friday.

The IRS said in June that it could not locate an untold number of emails to and from Lois Lerner, who headed the IRS division that processes applications for tax-exempt status. The revelation set off a new round of investigations and congressional hearings.

On Friday, the IRS issued a report to Congress saying the agency also lost emails from five other employees related to the probe, including two agents who worked in a Cincinnati office processing applications for tax-exempt status. ...

The IRS blamed computer crashes for all the lost emails. In a statement, the IRS said all the crashes happened well before Congress launched its investigations.

The IRS first told Congress in June that other employees involved in the probe also had computer problems. At the time, IRS Commissioner John Koskinen promised lawmakers a report on whether any had lost emails. The report was issued Friday.

"Throughout this review, the IRS has found no evidence that any IRS personnel deliberately destroyed any evidence," said the IRS statement. "To the contrary, the computer issues identified appear to be the same sorts of issues routinely experienced by employees within the IRS, in other government agencies and in the private sector."

When Congress started investigating the IRS last year, the agency identified 82 employees who might have documents related to the inquiries. The IRS said 18 of those people had computer problems between September 2009 and February 2014. Of those employees, five probably lost emails - in addition to Lerner - the agency said Friday.

Lerner, who was placed on leave and has since retired, has emerged as a central figure in congressional investigations. The other five employees appear to be more junior than she. In addition to the Cincinnati workers, they include a technical adviser to Lerner, a tax law specialist and a group manager in the tax-exempt division.

In general, the IRS said the workers archived emails on their computer hard drives when their email accounts became too full. When those computers crashed, the emails were lost. "By all accounts, in each instance the user contacted IT staff and attempted to recover his or her data," said the IRS statement. The IRS has said it stored emails on backup tapes but those tapes were re-used every six months. The inspector general's office is reviewing those tapes to see if any old emails can be retrieved..

"The IRS has lost thousands of emails, but worse yet, completely lost the American people's trust," said Sarah Swinehart, a spokeswoman for House Ways and Means Republicans. "The DOJ must appoint a special prosecutor so the full truth can come out."

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September 7, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, September 6, 2014

The IRS Scandal, Day 485

IRS Logo 2Senate Permanent Committee on Investigations Majority Report, IRS and TIGTA Management Failures Related to 501(c)(4) Applicants Engaged in Campaign Activities:

The primary conclusion of the Majority staff report is that, contrary to common understanding and widespread reporting, the IRS actually exhibited no bias in its review of conservative groups. The Majority staff report claims that the IRS targeted liberal and conservative groups equally and that a Treasury Inspector General for Tax Administration (TIGTA) report on the targeting of conservative groups was fundamentally flawed.

Senate Permanent Committee on Investigations Minority Report,  IRS Targeting Tea Party Groups

The Subcommittee Minority staff sharply disagrees with the conclusions reached by the Majority staff report. While some liberal groups were examined by the IRS from May 2010 to May 2012, there were far fewer such groups, they were systematically separate from the review of conservative groups, their questioning was far less intrusive, and, in some cases, the liberal groups were affiliates of specific organizations like ACORN that had behaved illegally in the past and could reasonably expect additional scrutiny. The inclusion of a scant few liberal groups by the IRS does not bear comparison to the targeting of conservative groups.

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September 6, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, September 5, 2014

The IRS Scandal, Day 484

IRS Logo 2Judicial Watch Press Release:  New IRS Documents Show Lerner Did Not Need Conservative Group Donor Lists – Emails Mention “Secret Research Project” by Top IRS Official:

Judicial Watch today released a new batch of Internal Revenue Service (IRS) email documents revealing that under former IRS official Lois Lerner, the agency seems to acknowledge having needlessly solicited donor lists from non-profit political groups. According to a May 21, 2012, memo from the IRS Deputy Associate Chief Counsel: “such information was not needed across-the-board and not used in making the agency’s determination on exempt status.” Later, in her May 10, 2013, remarks in which Lerner first revealed in response to question she planted about the IRS targeting of conservative groups, she conceded that the requests for donor names was “not appropriate, not usual.” The new documents obtained by Judicial Watch also reveal that 75% of the groups from whom the lists were solicited were apparently conservative, with only 5% being liberal.

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September 5, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, September 4, 2014

IRS Releases EITC Overpayment Data

IRS, Compliance Estimates for the Earned Income Tax Credit Claimed on 2006-2008 Returns:

EITC Logo (2014)This report presents information about the nature of errors taxpayers made when claiming the Earned Income Tax Credit (EITC) in Tax Years 2006 through 2008. This is the latest of several analyses of EITC compliance undertaken by the IRS over the years to help understand behavior and develop strategies for improving the administration of the credit. Prior to this report, the most recent analysis was conducted for Tax Year (TY) 1999 in a report commonly called the 1999 Compliance Study. 

As with the earlier studies of compliance, the analysis in this report relies on audit data; in this case, the audits were conducted by IRS’ National Research Program (NRP). NRP audits are like other IRS audits but provide the added benefit that they can be used for population estimates of taxpayer reporting compliance. One challenge with using audit data is that taxpayers do not always respond to or participate in the audit as required. In particular, 15 percent of EITC filers selected for an NRP audit of a TY 2006-2008 return did not participate in the audit, compared to 6 percent selected for an audit for a TY 1999 return. When this happens, the audit outcomes may not reflect their “true” eligibility for the credit.1 To address this uncertainty, two sets of estimates are presented throughout this paper, reflecting different assumptions about the true compliance behavior of these taxpayers: the “higher” estimate assumes that audit nonparticipants are generally noncompliant and the “lower” estimate assumes that the true compliance of audit non-participants is the same as the compliance of otherwise similar audit participants.

We find no discernible change in the overall tendency for noncompliance between 1999 and 2006-2008. This is based on a comparison of “dollar overclaim percentages,” defined as total dollars overclaimed as a percent of total dollars initially claimed for EITC (before considering IRS corrections or enforcement). In TY 2006-2008, the estimates of the overclaim percentage are 28.5 percent (lower estimate) and 39.1 percent (higher estimate).

Table 2b

Comparable figures from the 1999 Compliance Study are 30.9 percent and 35.5 percent. ...

While the overall tendency for noncompliance is little changed, the growth in the EITC program has led to an increase in total dollars of claims and overclaims since 1999. Averaging over returns filed for TY 2006-2008, an estimated 23.7 million taxpayers claimed an annual total of $49.3 billion in EITC, compared with 18.8 million taxpayers claiming a total of $31.3 billion in EITC in TY 1999. Total overclaims for TY 2006-2008 are estimated to be $14.0 billion (lower estimate) or $19.3 billion (higher estimate). Similar figures from the 1999 Compliance Study are $12.3 and $14.0 billion, after adjusting for inflation ($9.7 and $11.1 billion in current dollars).

(Hat Tip: Leslie Book.)

September 4, 2014 in IRS News | Permalink | Comments (0)

The IRS Scandal, Day 483

IRS Logo 2Wall Street Journal editorial:  Tax Collectors in the Cafeteria: The IRS Doesn't Like the Way Silicon Valley Does Lunch:

Having harassed the Tea Party for years, the Internal Revenue Service is now targeting Silicon Valley. The tax collectors are offended by the practice, common in the technology industry, of providing meals to employees without counting the food as taxable compensation. ...

[L]ast week the Treasury published the annual list of IRS priorities and ominously included a plan for new guidance "regarding employer-provided meals." As a large bureaucracy, the IRS has no fewer than 317 such projects on its priority list. In this case they seem to mean it. The Journal reports that IRS auditors are now flagging the issue and demanding back taxes from companies amounting to 30% of the meals' fair-market value, according to lawyers for the firms.

You don't have to be a software programmer to think that the IRS ought to focus on other priorities. For example, not one of the 317 projects is devoted to accurate and complete disclosure of the agency's role in targeting the President's philosophical opponents.

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September 4, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Wednesday, September 3, 2014

The IRS Scandal, Day 482

Tuesday, September 2, 2014

The IRS Scandal, Day 481

Monday, September 1, 2014

President Obama Appoints Ronald Pearlman to the IRS Oversight Board

The White House has announced the appointment of Ronald Pearlman to the Internal Revenue Service Oversight Board:

IRS Oversight BoardRonald Alan Pearlman recently retired as a Professor of Law at the Georgetown University Law Center, a position he held from 1999 to 2014. Previously, he was a Tax Partner at Covington & Burling from 1991 to 2000. Mr. Pearlman was Chief of Staff on the Joint Committee on Taxation of the U.S. Congress from 1988 to 1990 and a Tax Partner at Bryan Cave from 1986 to 1988. Prior to Bryan Cave, Mr. Pearlman served at the Department of the Treasury, first as the Deputy Assistant Secretary for Tax Policy from 1983 to 1984, and subsequently as Assistant Secretary for Tax Policy from 1984 to 1985. Before joining Treasury, Mr. Pearlman was a Tax Partner at Thompson & Coburn from 1969 to 1983. Mr. Pearlman received a B.A. from Northwestern University, a J.D. from the Northwestern University School of Law, and an L.L.M. from the Georgetown University Law Center.

September 1, 2014 in IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 480

Sunday, August 31, 2014

The IRS Scandal, Day 479

Saturday, August 30, 2014

The IRS Scandal, Day 478

Friday, August 29, 2014

The IRS Scandal, Day 477

IRS Logo 2Sharyl Attkisson:  Can Justice Dept. Investigate IRS Impartially?:

Should a special counsel take over the Justice Department probe of lost IRS emails and the targeting of conservative tax-exempt groups?

Attorney General Eric Holder says there’s no need: his Justice Department is conducting a thorough and fair investigation.

But can the Justice Department be impartial in IRS probe of “lost” documents while, at the same time, defending the IRS in civil litigation over the lapse?

The question is raised in the context of a Freedom of Information lawsuit filed against the IRS by the conservative watchdog Judicial Watch. In what seems to be yet another about-face, Justice Department lawyers Friday told Judicial Watch the elusive documents may have been saved, after all, on some type of government-wide backup system from which materials are difficult to retrieve. So, on the one hand, the Justice Department is investigating the IRS. On the other, it is representing and defending the IRS.

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August 29, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, August 28, 2014

The IRS Scandal, Day 476

IRS Logo 2New York Post editorial:  IRS Back-up Baloney:

Some 15 months after Americans learned about the IRS’ targeting of conservative groups, we still have no clue how such an abuse was allowed to happen. And every day, the story only gets murkier.

This week, for instance, a government watchdog group, Judicial Watch, said administration officials admitted that all the “missing” e-mails belonging to Lois Lerner (the woman at the heart of the scandal) had been backed up after all — as part of a practice to back up all the government’s e-mails. ...

An administration official later denied it had said anything new to Judicial Watch and claimed the group was mischaracterizing the facts. The problem for Americans is that the government’s story has always seemed incredible — so why believe anything it says now?

There’s more: According to a sworn declaration, Lerner had two Blackberries, one of which contained all of the e-mails that would have been sent to her crashed computer. But that Blackberry “was removed or wiped clean of any sensitive or proprietary information and removed as scrap for disposal in June 2012” — even after the hard drive “crash” and months after an initial congressional inquiry. How did that happen?

The more we learn, it seems, the less we know. And the less the public can trust their own government. It’s long past time for real answers.

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August 28, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, August 27, 2014

Tax Court Approves the IRS's Taxation of Frequent Flyer Miles

CitiBank LogoThe Tax Court yesterday required the taxpayer to include $668 in income as reported by Citibank on Form 1099-MISC as the value of an airline ticket received by the taxpayer upon redemption of 50,000 "Thank You Points" from opening a Citibank account. Shankar v. Commissioner, 143 T.C. No. 5 (Aug. 26, 2014).

(Hat Tip: Phil Hackney.)

Update:  Sam Brunson (Loyola-Chicago), Tax Court: Frequent Flier Miles Are Income

August 27, 2014 in IRS News, Tax | Permalink | Comments (2)

IRS Ethics Lawyer Facing Possible Disbarment

IRS Logo 2Washington Times, IRS Ethics Lawyer Facing Possible Disbarment, Accused of Lying:

A lawyer in the IRS ethics office is facing the possibility of being disbarred, according to records that accuse her of lying to a court-appointed board and hiding what she’d done with money from a settlement that was supposed to go to two medical providers who had treated her client.

The disciplinary arm of the D.C. Court of Appeals has recommended that Takisha McGee, a section manager in the IRS Office of Professional Responsibility, lose her law license over the charge, which stems from a personal injury case she worked about a year before she joined the tax agency.

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August 27, 2014 in IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 475

IRS Logo 2Real Clear Politics:  George Will on IRS: "It Is Off The Rails And It Is Now Thoroughly Corrupted":

I can just hardly wait until the IRS lawyers go into that courtroom and tell the judge that it would be too onerous to stop obstructing justice in this case. That's a really interesting defense. You know, Lily Tomlin, the comedian, used to have a character, the Bag Lady, who said, 'no matter how cynical you get you, just can't keep up.' And that's the way it was with the IRS.

Remember this thing began in deceit with Lois Lerner planting a question to reveal this getting ahead of the Inspector General of the IRS report. Then there were a few rogue agents in Cincinnati. The IRS is the most intrusive and potentially punitive institution of the federal government and it is a law enforcement institution and it is off the rails and it is now thoroughly corrupted.

People are saying, 'well, the Justice Department can take care of this.' There is a reason why Jack Kennedy had his brother [as] Attorney General. There is a reason why Richard Nixon had his campaign manager John Mitchell [as] Attorney General. It is an inherently political office and it can't be trusted in cases like this.

 

 

The order from U.S. District Court Judge Emmett Sullivan was certainly clear enough. In a landmark victory for Judicial Watch, the federal judge ordered the IRS to submit sworn declarations detailing what happened to Lois Lerner’s “lost” emails and what steps were being taken to find them. What was provided was a garbled explanation from no less than five IRS officials with more holes than a block of Swiss cheese. ...

These sworn declarations came from five IRS officials: Aaron G. Signor, John H. Minsek, Stephen L. Manning, Timothy P. Camus, and Thomas J. Kane.

We noted that the IRS and DOJ filings seem to treat as a joke Judge Sullivan’s order requiring the IRS to produce details about Lois Lerner’s “lost” emails and any efforts to retrieve and produce them to Judicial Watch as required under law.

This is the story we’re supposed to believe, according to these IRS officials: Lerner’s crashed drive was analyzed by two technicians who employed a variety of tech tactics to recover the data, to no avail. The drives – which, mind you, had no recoverable data according to these experts – were then “degaussed” (wiped clean) “to protect against any possible disclosure of… taxpayer information.” Anyone with even a passing familiarity with the IRS email scandal would have realized that these filings were a blatant continuation of the cover-up.

Well, if there’s one thing I know, it is that most federal courts don’t take kindly to being treated disrespectfully and expected to act like a somnolent member of Congress as administration officials mislead, omit, and play games.

Sure enough, in a stunning move, Judge Sullivan took the extraordinary step of launching an independent inquiry into the issue of Lerner’s missing emails. ...

Judicial Watch has filed hundreds of FOIA lawsuits. I have never seen this type of court action in all my 16 years at Judicial Watch.

Judge Sullivan has already authorized Judicial Watch to submit a request for limited discovery into the missing IRS records after September 10. So stay tuned for further details very soon.

Judge Sullivan took the additional step of appointing Magistrate Judge John M. Facciola to manage and assist in discussions between Judicial Watch and the IRS about how to obtain the missing records. Magistrate Facciola is an expert in e-discovery.

August 27, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, August 26, 2014

The IRS Scandal, Day 474

IRS Logo 2Judicial Watch, Statement on Discovery of Backups for “Missing” Lois Lerner IRS Emails:

Department of Justice attorneys for the Internal Revenue Service told Judicial Watch on Friday that Lois Lerner’s emails, indeed all government computer records, are backed up by the federal government in case of a government-wide catastrophe.  The Obama administration attorneys said that this back-up system would be too onerous to search.  The DOJ attorneys also acknowledged that the Treasury Inspector General for Tax Administration (TIGTA) is investigating this back-up system.

We obviously disagree that disclosing the emails as required would be onerous, and plan to raise this new development with Judge Sullivan.

This is a jaw-dropping revelation.  The Obama administration had been lying to the American people about Lois Lerner’s missing emails. There are no “missing” Lois Lerner emails – nor missing emails of any of the other top IRS or other government officials whose emails seem to be disappearing at increasingly alarming rate. All the focus on missing hard drives has been a diversion. The Obama administration has known all along where the email records could be – but dishonestly withheld this information. You can bet we are going to ask the court for immediate assistance in cutting through this massive obstruction of justice.

New York Observer:  IRS Shocker: Filing Reveals Lerner Blackberry Destroyed; The Device Was Wiped AFTER Congressional Inquiry Began:

The IRS filing in federal Judge Emmet Sullivan’s court reveals shocking new information. The IRS destroyed Lerner’s Blackberry AFTER it knew her computer had crashed and after a Congressional inquiry was well underway. As an IRS official declared under the penalty of perjury, the destroyed Blackberry would have contained the same emails (both sent and received) as Lois Lerner’s hard drive. ...

With incredible disregard for the law and the Congressional inquiry, the IRS admits that this Blackberry “was removed or wiped clean of any sensitive or proprietary information and removed as scrap for disposal in June 2012.” This is a year after her hard drive “crash” and months after the Congressional inquiry began.

The IRS did not even attempt to retrieve that data. It cavalierly recites: “There is no record of any attempt by any IRS IT employee to recover data from any Blackberry device assigned to Lois Lerner in response to the Congressional investigations or this investigation,” according to Stephen Manning, Deputy Chief Information Officer for Strategy & Modernization.

House Committee on Oversight and Government Reform:  Justice Dept’s IRS Representation Conducted by Former IRS Attorney Involved in Targeting of Conservatives Himself:

House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) and Regulatory Affairs Subcommittee Chairman Jim Jordan (R-Ohio) today sent a letter to U.S. Attorney General Eric Holder reiterating bipartisan calls for the appointment of a special counsel for the Administration’s Justice Department investigation of Internal Revenue Service’s (IRS) targeting of conservative groups after new documents obtained by the Committee showed additional conflicts of interest within the Justice Department. Among other examples, a current Justice Department attorney who represented the IRS in litigation relating to the IRS’s targeting of conservatives was in fact previously an IRS employee and was involved in the IRS’s scheme to target conservatives.

The Committee has learned that Andrew Strelka, currently an attorney at the Justice Department’s Tax Division, worked from 2008 to 2010 at the IRS in the Exempt Organizations (EO) Division, formerly headed by Lois Lerner. Emails show that Strelka was directly involved in the IRS targeting of conservative tax-exempt applicants. In March 2010, Strelka received an e-mail from IRS manager Ronald Shoemaker directing him to “[b]e on the lookout for a tea party case.” Shoemaker directed Strelka: “If you have received or do receive a case in the future involving an exemption for an organization having to do with tea party let me know.”  Strelka also received an e-mail in June 2011 about the crash of Lois Lerner’s hard drive.  Until recently, Strelka represented the IRS in civil litigation relating to the IRS targeting.

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August 26, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Monday, August 25, 2014

The IRS Scandal, Day 473

IRS Logo 2Personal Liberty Digest: IRS Answers Due Today In Lawsuit Over Missing Lerner Emails:

The Internal Revenue Service is expected to present sworn testimony today to a federal judge who cracked down on the agency after it offered dismissive responses to a previous discovery order aimed at explaining how Lois Lerner’s infamous “lost” emails went missing. ...

Judicial Watch’s lawsuit against the IRS is faring better than a similar one filed by Texas-based conservative group True the Vote. Earlier this month, federal judge Reggie Walton denied True the Vote’s request for an independent forensic audit of IRS computers connected with Lerner’s emails, saying it would only duplicate the investigative efforts of the government’s Treasury Inspector General for Tax Administration.

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August 25, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Sunday, August 24, 2014

The IRS Scandal, Day 472

IRS Logo 2The American Thinker: IRS E-mails: The Perfect Storm:

August 22 is another deadline for the Obama administration’s IRS officials to come clean about their clear malfeasance in office. Judge Emmet Sullivan, who has acted sua sponte to compel IRS officials to provide all the details surrounding the “lost” e-mails, has the reputation of a judicial pit bull, a federal judge who insists that his orders and his office be treated with proper respect.

This is a scandal ordinary Americans can completely grasp in all its incarnations. The Obama administration picks out its political opponents for particular persecution. The organ of federal power chosen for this persecution, the IRS, is despised and feared by millions of Americans. Did Obama’s flacks forget that the last major congressional action to rein in the IRS, the IRS Restructuring and Reform Act of 1998, passed the Senate by a vote of 97 to 0 and the House by a vote of 402 to 8, and was signed into law by Bill Clinton? ...

The explosion of information technology expertise among ordinary Americans means that even the relatively apolitical snicker at the hapless efforts of the IRS bosses to pretend that all the e-mail records have been lost. Most Americans use e-mails all the time and know just how difficult it would be to utterly scrub forever even casual e-mails sent to friends and acquaintances. Most Americans in their ordinary lives assume that an e-mail they send will exist in myriad places, and that if their computers crash, this will not affect these independent records of e-mails sent.

The scandal then is the perfect storm of political corruption. Obama’s IRS partisans do something very bad. They complement this misbehavior with condescending e-mails that seem to relish their abuse of political opponents. When confronted by the proper regulating agency within our constitutional system, Congress, they smirk, dissemble, rebel, and ignore. These bad folks then assume that ordinary Americans know much less about information technology than they do and think that they can lie with impunity. When the third branch of government, the Judicial Branch, is brought into the argument, these IRS clowns lie and hide again. ...

What all this means is that when these records appear – and with a federal judge threatening IRS employees with jail time, these records will appear – then the whole sordid mess will implode like a deck of cards. The depth of corruption, like the depth of corruption in the VA scandal, will be impossible to fob off as rogue employees acting badly. Heads will have to roll, and this grim knowledge will move those who know the truth – very likely people we have not heard of yet – to come out of the shadows and to spill their guts to save themselves. It is the perfect storm, and it is coming up fast.

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August 24, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, August 23, 2014

IRS Releases 2012 Individual Income Tax Return Data

IRSThe IRS yesterday released  (IR-2014-83) Publication 1304, Individual Income Tax Returns 2012:

U.S. taxpayers filed 144.9 million individual income tax returns for tax year 2012, down 0.3 percent from 2011. The adjusted gross income less deficit reported on these returns totaled $9.1 trillion, which is an 8.7-percent increase from the prior year.

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August 23, 2014 in IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 471

IRS Logo 2Washington Examiner op-ed:  The Case for Impeaching Lois Lerner and Other Lawbreakers at the IRS, by Ken Cuccinelli & Mark Fitzgibbons:

In April, the House Ways and Means Committee referred Lois Lerner to the Department of Justice for criminal prosecution. Nothing has come of it. Given the politicization and lawlessness of the DOJ under Attorney General Eric Holder, nothing likely will.

The House should move to impeach Lerner instead, and other IRS officials who have broken the law. Federal bureaucrats need to be sent a message that lawbreaking is not part of their job descriptions, and that notwithstanding our recalcitrant Justice Department, our constitutional system provides this remedy against executive branch officials gone rogue under the law.

More importantly, Americans deserve to know that lawbreaking within their own government will have consequences. ... If criminal conduct within the IRS and the federal bureaucracy won’t be prosecuted, our Constitution at least gives our elected representatives a check of impeachment on unelected “civil officers.”

Impeaching Lerner and others may actually help restore some faith that someone in government takes the rule of law seriously.

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August 23, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, August 22, 2014

The IRS Scandal, Day 470

Thursday, August 21, 2014

ObamaCare Tax Forms Pose Challenge for Enrollees, Exchanges

Washington Times, Obamacare Tax Forms May Pose Challenge for Enrollees, Exchanges:

Obamacare customers won’t be able to file their tax returns next year until the government sends them a form detailing their coverage and tax credits, and if those forms are late some taxpayers could face a delay in seeking their refunds.

1095A

Federal and state officials said they’re working on the forms, known as the 1095A, and vowed to meet the Jan. 31 deadline for issuing them. But some tax professionals are skeptical, citing the administration’s iffy track record on being able to meet other deadlines in the massive health overhaul law. “It really strains credulity to think 1095A is not going to be a big problem,” said George Brandes, vice president for health programs at Jackson Hewitt Tax Service.

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August 21, 2014 in IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 469

IRS Logo 2Breitbart:  Federal Judge Takes Extraordinaru Steps in IRS Lawsuit:

The order from U.S. District Court Judge Emmett Sullivan was certainly clear enough. In a landmark victory for Judicial Watch, the federal judge ordered the IRS to submit sworn declarations detailing what happened to Lois Lerner’s “lost” emails and what steps were being taken to find them. What was provided was a garbled explanation from no less than five IRS officials with more holes than a block of Swiss cheese. ...

These sworn declarations came from five IRS officials: Aaron G. Signor, John H. Minsek, Stephen L. Manning, Timothy P. Camus, and Thomas J. Kane.

We noted that the IRS and DOJ filings seem to treat as a joke Judge Sullivan’s order requiring the IRS to produce details about Lois Lerner’s “lost” emails and any efforts to retrieve and produce them to Judicial Watch as required under law.

This is the story we’re supposed to believe, according to these IRS officials: Lerner’s crashed drive was analyzed by two technicians who employed a variety of tech tactics to recover the data, to no avail. The drives – which, mind you, had no recoverable data according to these experts – were then “degaussed” (wiped clean) “to protect against any possible disclosure of… taxpayer information.” Anyone with even a passing familiarity with the IRS email scandal would have realized that these filings were a blatant continuation of the cover-up.

Well, if there’s one thing I know, it is that most federal courts don’t take kindly to being treated disrespectfully and expected to act like a somnolent member of Congress as administration officials mislead, omit, and play games.

Sure enough, in a stunning move, Judge Sullivan took the extraordinary step of launching an independent inquiry into the issue of Lerner’s missing emails. ...

Judicial Watch has filed hundreds of FOIA lawsuits. I have never seen this type of court action in all my 16 years at Judicial Watch.

Judge Sullivan has already authorized Judicial Watch to submit a request for limited discovery into the missing IRS records after September 10. So stay tuned for further details very soon.

Judge Sullivan took the additional step of appointing Magistrate Judge John M. Facciola to manage and assist in discussions between Judicial Watch and the IRS about how to obtain the missing records. Magistrate Facciola is an expert in e-discovery.

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August 21, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Wednesday, August 20, 2014

The IRS Scandal, Day 468

IRS Logo 2Wonkette:  Laura Ingraham Explains That Thugs Gonna Thug:

What do you think would have happened, guys, if tea party activists, right, came to Washington D.C. after the IRS scandal broke and decided to start smashing windows, rampaging through neighborhoods, throwing fire bombs. What do you think Eric Holder and Barack Obama would do? Would they start saying, ‘Well, we understand that people are angry, we really get your emotion here, but this isn’t acceptable. Do you really think there would have been this nuanced language, this emoting that has become the pastime of this administration?

Washington Times:  Intolerance on the Left: The Marketplace of Ideas Can’t Function Without Civility:

We often hear those on the right branded as “intolerant.” We’re all a bunch of extremists who just want to shut down the other side, right? We’re unlike those on the left, who welcome debate and want to give all viewpoints a respectful hearing.

Or so we’re told. We might even start to believe it — until we encounter the oh-so-tolerant voices of our loyal opposition. Voices such as: ...

Lois Lerner: According to emails written by the former Internal Revenue Service official, conservatives are “crazies” and another word too obscene to quote. Conservatives who dare to criticize the government, in her view, want to “take us down.” Small wonder that the agency targeted conservative groups during Ms. Lerner’s tenure.

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August 20, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, August 19, 2014

TIGTA: ObamaCare Medical Device Tax Is Raising 25% Less Revenue Than Expected, IRS Administration of Tax Is Rife With Errors

TIGTA The Treasury Inspector General for Tax Administration today released The Affordable Care Act: An Improved Strategy Is Needed to Ensure Accurate Reporting and Payment of the Medical Device Excise Tax (2014-43-043):

The Affordable Care Act includes a tax provision that provides for an excise tax equal to 2.3 percent of the sales price for medical devices sold beginning January 1, 2013. Manufacturers, producers, and importers are responsible for collecting the medical device excise tax and must file a Form 720, Quarterly Federal Excise Tax Return. The Joint Committee on Taxation estimated revenues from the medical device excise tax of $20 billion for Fiscal Years 2013 through 2019. ...

Our review found that both the number of Forms 720 filed reporting the medical device excise tax and the amount of the associated revenue reported are lower than estimated. The IRS is attempting to develop a compliance strategy to ensure that businesses are compliant with medical device excise tax filing and payment requirements and has taken several measures to advise medical device manufacturers of the new excise tax. However, the IRS cannot identify the population of medical device manufacturers registered with the Food and Drug Administration that are required to file a Form 720 and pay the excise tax.

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August 19, 2014 in Gov't Reports, IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 467

IRS Logo 2Forbes:  Are 'Expendables 3' & IRS Equally Expendable?, by Robert W. Wood:

The Expendables 3 is a little like the IRS. Did we need this third installment of the action movie franchise? It had a lackluster opening weekend and tepid reviews, so perhaps with ‘Expendables 3′ the Third Time’s Not a Charm. But it may have a hidden message.

An expendable movie about a cadre of aging action stars is a little like the sagging IRS. The IRS may never have been a star, but its star has fallen in recent years. For over a year now, it has been plagued by scandal and what sometimes seems like downright arrogance at the top. Even in the face of these sad developments, some claim there is not a ‘Smidgen Of Corruption’ at the IRS.

Like an aging action star demanding too much money and being frozen out, such behavior doesn’t bode well for the IRS. ... Expendables—the IRS—features an agency that collects billions and is charged with administering the nation’s tax laws. Make no mistake, that’s no easy job. Yet on the whole, I still think the IRS does a generally good job (no hate mail please). That is why it’s so terribly important that we restore some trust and accountability. ...

Does our our country have more important problems? Sure we do. But it’s still wrong that we cannot seem to get straight answers. The latest order from Judge Emmet G. Sullivan in the litigation filed by Judicial Watch asks for answers about the recently ‘lost’ emails of Lois Lerner and other IRS officials. See Judicial Watch v. IRS (No. 1:13-cv-1559).

The fact that a federal judge has had to launch this inquiry into the issue of the missing emails is a sad day for the IRS, regardless of whether the IRS realizes it. The IRS filings were at least lackluster and seemed not to take seriously the judge’s request for sworn declarations about the IRS email issue. The judge really means it.

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August 19, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, August 18, 2014

The IRS Scandal, Day 466

IRS Logo 2New York Observer: Deadline: Judge Emmet Sullivan Lays Down the Law:

On behalf of the country, Judge Emmet Sullivan is pounding the IRS and appears as unsatisfied as most of America with the agency’s stalling, side-stepping, neglect, arrogance, and cavalier attitude toward its legally required record-retention responsibilities. Late yesterday afternoon, Judge Sullivan entered an order that demands answers to a lot more questions.

The IRS’s filing in Judge Sullivan’s court Monday evidenced no interest in finding the emails all of us know are out there somewhere. The fact that the IRS took thirty days to file its meager declarations, which actually said less than it had disclosed to Congress, is truly insulting. The agency better take Judge Sullivan seriously—and fast—or he’s the one who will be furious. Have IRS officials Kane and Koskinen still not reviewed what this fearless enforcer of the law did to the last Department of Justice prosecutors who played games with the truth in his courtroom? ...

The IRS is represented by Department of Justice attorneys. Do they not read the news, the latest books, or the law? This column has tried to warn them repeatedly that, like Toto, they’re not in Kansas any more. They are in the federal courtroom of a real Article III judge who has powers they should bloody well know not to ignore—the same kind wielded by Judge John Sirica, whose integrity and persistence in dealing with the Watergate case led to the resignation of Richard M. Nixon.

This is the same Emmet Sullivan who appointed a special prosecutor and initiated criminal contempt proceedings and a full investigation of the Department of Justice attorneys who played unethical and dishonest games in the prosecution of United States Senator Ted Stevens.

Someone in DOJ or the IRS better find those emails, fast, or this Judge will do it for them and they’ll just think they were caught up in a Category V tornado—or wish they had been and carried off to Oz instead. Judge Sullivan will keep on until he finds the man behind the curtain.

One of the things I can’t help but continue to wonder is, if the emails and all the information truly were not recoverable from the Lerner hard drive, why did the hard drive have to be “degaussed” and destroyed to “protect taxpayer privacy”? And why did someone testify to Congress that an IRS IT expert said it should be given to an outside vendor to retrieve the messages—and instead, the hard drive was degaussed and shredded?

With each turn, the IRS has raised more questions than it has answered. But this time it’s not the media and the citizens doing the asking. They’ve now got a week to answer to a judge.

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August 18, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Sunday, August 17, 2014

The IRS Scandal, Day 465

IRS Logo 2Bloomberg: Federal Judge Wants Answers From the IRS on Missing E-mails:

A federal judge signaled that he doesn’t believe the Internal Revenue Service did all it could to unearth the missing e-mails at the heart of a Congressional investigation into the agency’s treatment of Tea Party organizations.

U.S. District Judge Emmet Sullivan late yesterday asked the IRS for a list of steps it took to retrieve e-mails of Lois Lerner, who was the official in charge of determining whether the antitax Tea Party groups could qualify for nonprofit status. The IRS has said a crash of her hard drive wiped out e-mails from 2009 to 2011.

Sullivan, appointed to the court by former President Bill Clinton in 1994, gave the IRS until next week to answer several questions about how it decided the e-mails were beyond recovery. Among them, he asked the agency whether it sought e-mails from alternate sources, such as a BlackBerry, iPhone, or iPad; to explain how it tracks computer parts when they’re serviced or taken out of use; and to provide a statement from an outside vendor “who can verify the IRS’ destruction policies concerning hard drives.”

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August 17, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, August 16, 2014

The IRS Scandal, Day 464

IRS Logo 2Legal Insurrection:  Judge Launches Special Inquiry Into Missing IRS Emails and Lerner Hard Drive, by William Jacobson (Cornell):

Judicial Watch has sued over missing IRS emails in the federal district court in D.C., pursuant to its FOIA request for such documents.

The IRS was ordered to provide explanations as to missing emails, particularly Lois Lerner.

The IRS provided explanations, but those were not good enough for the Judge, who launched his own inquiry into the matter, as Judicial Watch explained in a statement posted on its website.

Here is the Judge’s Order (emphasis added, hard paragraph breaks inserted for ease of reading):

MINUTE ORDER. In light of [26] the Declarations filed by the IRS, the IRS is hereby ORDERED to file a sworn Declaration, by an official with the authority to speak under oath for the Agency, by no later than August 22, 2014.
In this Declaration, the IRS must:
(1) provide information about its efforts, if any, to recover missing Lois Lerner emails from alternate sources (i.e., Blackberry, iPhone, iPad);
(2) provide additional information explaining the IRS’s policy of tracking inventory through use of bar code property tags, including whether component parts, such as hard drives, receive a bar code tag when serviced. If individual components do not receive a bar code tag, provide information on how the IRS tracks component parts, such as hard drives, when being serviced;
(3) provide information about the IRS’s policy to degauss hard drives, including whether the IRS records whose hard drive is degaussed, either by tracking the employee’s name or the particular machine with which the hard drive was associated; and
(4) provide information about the outside vendor who can verify the IRS’s destruction policies concerning hard drives.
Signed by Judge Emmet G. Sullivan on August 14, 2014.

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August 16, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, August 15, 2014

The IRS Scandal, Day 463

IRS Logo 2Bloomberg, Judge Prods IRS on Effort to Save Lois Lerner’s E-Mail:

A federal judge asked the U.S. Internal Revenue Service for more information on efforts it made to recover missing e-mail from the computer of an agency official at the heart of a quarrel between Congress and the Obama administration.

U.S. District Judge Emmet Sullivan’s order today giving the IRS until Aug. 22 to come up with further details on what it did to retrieve e-mail from the malfunctioning computer of Lois Lerner signals his dissatisfaction with the agency’s earlier explanation, contained in an Aug. 11 filing. 

The order comes in a Freedom of Information Act lawsuit filed by the activist group Judicial Watch. The complaint seeks Lerner’s e-mail and other communications concerning the processing of applications for tax-exempt status.

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August 15, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, August 14, 2014

TIGTA: IRS Puts Confidential Taxpayer Information at Risk By Giving It to Contractors Without Required Background Checks

TIGTA The Treasury Inspector General for Tax Administration today released Some Contractor Personnel Without Background Investigations Had Access to Taxpayer Data and Other Sensitive Information (2014-10-037):

IRS policy requires contractor personnel to have a background investigation if they will have or require access to Sensitive But Unclassified (SBU) information, including taxpayer information. Allowing contractor personnel access to taxpayer and other SBU information without the appropriate background investigation exposes taxpayers to increased risk of fraud and identity theft.

Taxpayer and other SBU information may be at risk due to a lack of background investigation requirements in five contracts for courier, printing, document recovery, and sign language interpreter services. For example, in one printing services contract, the IRS provided the contractor a compact disk containing 1.4 million taxpayer names, addresses, and Social Security Numbers; however, none of the contractor personnel who worked on this contract were subject to a background investigation. In addition, TIGTA found 12 contracts for which IRS program and procurement office staff correctly determined that contractor personnel required background investigations because they would have access to SBU information; however, some contractor personnel did not have interim access approval or final background investigations before they began working on the contracts. Further, TIGTA identified 20 contracts for which either some or all contractor personnel did not sign nondisclosure agreements. In June 2013, after the period covered by our audit, the IRS issued more explicit guidance requiring the execution of nondisclosure agreements.

August 14, 2014 in Gov't Reports, IRS News, Tax | Permalink | Comments (1)

The IRS Scandal, Day 462

IRS Logo 2New York Observer:  Time’s Up for Lois Lerner and the IRS, by Sidney Powell:

On July 10, D.C. federal judge Emmet Sullivan gave the IRS thirty days to provide him sworn declarations in the Freedom of Information Act suit filed by Judicial Watch, seeking much of the same information the IRS has effectively kept from Congress. After an “extraordinary” hearing, Judge Sullivan ordered the IRS to tell him under oath exactly what happened to Lois Lerner’s hard drive. He demanded sworn declarations specifying what the agency had done to recover the thousands of emails missing. Time’s up.

The IRS filed its “declarations” yesterday. As an attorney who has read the filings and who has written extensively about this dedicated judge in my book Licensed To Lie, I could not in good conscience sign those filings. It’s not that they are false. Oh no, . . .each is very carefully worded to be literally true (hence, not perjurious). But, each says little, answers less, and reveals nothing that would actually lead to recovery of the emails or to anyone’s accountability for their disappearance in any form. In fact, the few pages say less than has already been revealed elsewhere. ...

[S]omeone in the IRS recommended that Lerner’s hard drive be given to an outside technician to retrieve the emails, but instead, it was destroyed. Who made that recommendation? Who over-rode it? Who authorized the destruction of a hard drive containing evidence of correspondence with the White House? How would that excuse work for a taxpayer’s records? Oooops, sorry. That’s a felony. ... The only thing these miserly declarations prove is that IRS has abdicated all responsibility and has no interest in finding the emails. But Judge Emmet Sullivan does.

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August 14, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Wednesday, August 13, 2014

TIGTA: Tax Exempt Tax Deadbeats -- Nonprofit Groups Owe the IRS Nearly $1 Billion in Payroll Taxes

TIGTA The Treasury Inspector General for Tax Administration today released Some Tax-Exempt Organizations Have Substantial Delinquent Payroll Taxes (2014-10-012):

IRS records indicate that the majority of tax-exempt organizations pay their Federal taxes. However, a small percentage are not paying their taxes. More than 64,200 (3.8%) tax‑exempt organizations had nearly $875 million of Federal tax debt as of June 16, 2012. While some organizations owed minor amounts, approximately 1,200 tax‑exempt organizations owed more than $100,000 each. Unpaid taxes were often associated with multiple tax periods. For example, nine organizations each had Federal tax debt spanning 10 or more years that collectively totaled more than $5.5 million.

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August 13, 2014 in Gov't Reports, IRS News, Tax | Permalink | Comments (1)

The IRS Scandal, Day 461

Tuesday, August 12, 2014

The IRS Scandal, Day 460

IRS Logo 2Biz Pac Review:  Sharyll Attkisson’s Impressive Account of How Watergate Would Play Out in Obama Era:

Sharyl Attkisson, the former CBS News reporter who left the network complaining because of liberal bias, offered a sobering account of Sunday how she thinks Watergate would play out today in the Age of Obama.

And it sounds awfully familiar.

Appearing on ABC’s “This Week,” Attkisson described what has basically been the pattern for every scandal of the Obama years – dubbed “phony scandals” by all the president’s men.

“I think that we’ve gone backwards since that time when we really felt empowered as journalists,” Attkisson said. “And all I can think is: What would happen today during a Nixon-type scandal?”

“Nixon would basically refuse to turn over tapes to Congress,” she said, in an apparent allusion to the IRS simply “losing” emails key to investigations of its targeting conservative groups.

“His aides would refuse to testify to Congress, or would take the Fifth, or would like to Congress with a fair amount of immunity,” Attkisson continued, describing the refusal of former IRS official Lois Lerner to testify before Congress and the stonewalling other administration officials have engaged in.

The Hill op-ed:  More Lost Emails — When Will Democrats Have Enough?, by Rick Manning (Citizens for Limited Government):

Twenty different Obama administration officials have lost or destroyed a portion of their email traffic. Email traffic that was, in some cases, under subpoena or in others requested as part of a larger inquiry into the conduct of the executive branch. ...

The brazenly contemptuous stonewall-and-erase-evidence approach to congressional inquiries preferred by the Obama administration is perhaps this president's greatest affront to our constitutional system of government.

When you have records going missing across an administration, it is impossible to conclude anything other than it is a coordinated and condoned cover-up, and not just a series of incompetent, coincidental keystrokes wiping out information.

The conclusions get even uglier when you realize that the IRS dismissed the government contractor responsible for maintaining back-up files of their emails concurrent with Lois Lerner and her band mysteriously having their computers flatline.

The question is, where are the Democrats in the face of this obvious malfeasance?

During the Watergate scandal that brought down the presidency of Richard Nixon, a few Republicans came forward and urged the president to come clean. Yet, the silence is deafening from Democrats in both the House and Senate in the wake of this obvious obstruction of the congressional oversight function.

Where are the patriots on the Democratic side, who are willing to stand up to an executive branch that has declared them inconsequential?

National Review op-ed:  Stonewaller-in-Chief: We’re Transparent, but Don’t Ask For Any Documents, Says the Obama White House, by John Fund:

The most valuable lesson I’ve learned in reporting about Washington is a simple one: watch what politicians do, not what they say. There can be no better illustration of this than Obama’s summit meeting with African leaders last week. He used the meeting as an opportunity to tout the positive role inspectors general can play in fighting corruption in government agencies; at the same time that he was speechifying about this, some two-thirds of President Obama’s own inspectors general wrote a scathing letter to Congress complaining that his administration was placing “serious limitations” on their ability to do their jobs.

Wall Street Journal editorial:  Justice's IRS Connection: The Lawyer Who Had Tax-exempt Cases Coming and Going:

It was fishy enough when Democratic donor Barbara Bosserman was appointed to lead the Justice Department investigation of IRS targeting of conservative groups. Now there are new questions about Justice's staffing choice on one of the private lawsuits brought against the IRS.

We've been telling you about the pro-Israel group Z Street, which sued the IRS in 2010 on grounds that the agency engaged in viewpoint discrimination when it singled out 501(c) groups with Israel-related missions for additional scrutiny. The case has been handled by Justice Department trial attorney Andrew Strelka, who previously worked in the IRS office run by Lois Lerner that handled tax-exempt applications. ...

[R]ecently Mr. Strelka was withdrawn as the Justice Department's counsel of record on the Z Street case. A review of court dockets showed that he has also withdrawn from two other cases involving tax-exempt groups, including Judicial Watch's suit against the IRS. ...

If Mr. Strelka had personal knowledge of the processing of tax-exempt applications for groups like Z Street while he was assigned to the IRS, he should have recused himself from handling the case at Justice.

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August 12, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, August 11, 2014

The IRS Scandal, Day 459