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Friday, January 30, 2015

IRS Low Income Taxpayer Clinic Program Releases Annual Report

LITC CoverIR-2015-13, Low Income Taxpayer Clinic Program Reports on Activities (Jan. 29, 2015):

The Internal Revenue Service’s Low Income Taxpayer Clinic (LITC) Program Office has issued its annual program report, which describes how LITCs have assisted thousands of low income taxpayers nationwide with free or low-cost representation, education and advocacy services.

LITCs provide free or low-cost assistance to low income individuals who have tax disputes with the IRS, such as an audit, appeals hearing, collection matter or litigation. LITCs also conduct education and outreach to taxpayers who speak English as a second language (ESL). In addition, they advocate for low income taxpayers and highlight the need to change administrative practices and procedures that cause their clients hardship. 

The report explains how LITCs help low income and ESL individuals understand and exercise their rights as U.S. taxpayers. The report also provides an overview and history of the LITC program, discusses the type of cases that LITCs work, and reports the results that LITCs achieve on behalf of their clients.

LITC

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January 30, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

The IRS Scandal, Day 631

IRS Logo 2Judicial Watch, Obama Administration Refuses to Release Time Records of Key Attorney in IRS Scandal Investigation:

Judicial Watch announced today that the Obama Department of Justice (DOJ) is going to extreme lengths to keep from the public the number of hours DOJ Attorney Barbara Bosserman expended on the investigation of the Internal Revenue Service’s targeting of conservative organizations.  The DOJ has claimed no less than four separate privileges in federal court to keep secret Bosserman’s hours. In doing so, the DOJ has confirmed that the criminal investigation into the IRS’ abuses is ongoing and that Bosserman, a major donor to Obama’s political campaigns and Democratic National Committee, continues to be part of the team of lawyers criminally investigating the issue.  The developments come in a lawsuit filed by Judicial Watch against the Justice Department to obtain the information about Bosserman’s activities. ...

“All Judicial Watch wants is the number of hours that the Obama donor/Justice Department lawyer has spent investigating the worst IRS abuse in American history,” said Judicial Watch President Tom Fitton. “That the Justice Department has violated the law to keep this information secret is further confirmation that President Obama’s Justice Department is hopelessly conflicted in the IRS scandal.  Thanks to Judicial Watch, the public knows that the Justice Department and the FBI are co-conspirators with the IRS – and planned to prosecute citizens on Obama’s political hit list.  Obama’s IRS abuse is far worse than Nixon’s.  And as with Watergate, the public interest and basic legal ethics principles require that the U.S. Attorney General appoint special counsel to investigate the IRS scandal.  The U.S. Senate should ask Loretta Lynch, the president’s nominee to replace the disgraced Eric Holder as U.S. Attorney General, about this issue.”

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January 30, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, January 29, 2015

Going Clear, Scientology, and the IRS

Slate, What Sundance Favorite Going Clear Tells Us About Scientology:

Going Clear [review here] ends by noting that the church has fewer than 50,000 members but still possesses more than $3 billion in assets. Most of this wealth can be attributed to Scientology’s long, tortured, and ultimately triumphant battle with the IRS to be deemed a non-profit, tax-exempt organization. That victory is perhaps Miscavige’s keystone achievement: as the film details, and as the New York Times reported in 1997, Miscavige used a combination of lawsuits, backroom negotiations, and private investigators digging up dirt on IRS officials to secure Scientology’s status as a religion.

January 29, 2015 in Book Club, IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 630

IRS Logo 2Bloomberg, Ted Cruz Leads the New Conservative Crusade Against the IRS:

Though the first day of Loretta Lynch's AG hearings went as well as Democrats might have wanted, Senator Ted Cruz managed to steal the spotlight on an issue near and dear to the hearts of many conservatives: reforming the Internal Revenue Service. ...

Cruz asked Lynch if she'd appoint an attorney to independently investigate whether the IRS had targeted Americans over their political beliefs.

"Is it consistent with fairly and impartially enforcing the law to have an investigation into abuse of power at the IRS headed by a major Democratic donor?" asked Cruz.

"My view is that the department has career prosecutors who are devoted to the Constitution," said Lynch, otherwise ignoring the implication of the question.

"Would you commit to this committee to appoint a special prosecutor to investigate the IRS abuse of power, who at the very least is not a major Obama donor?" asked Cruz.

Lynch, who according to biographical material submitted to the committee was not born yesterday, declined to take the bait. "My understanding is that the matter has been considered and the matter has been resolved," she said.

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January 29, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, January 28, 2015

The IRS Scandal, Day 629

IRS Logo 2Power Line, Sharyl Attkisson to Testify on Lynch Confirmation, But Why?:

Loretta Lynch, President Obama’s nominee for Attorney General, will testify tomorrow before the Senate Judiciary Committee. It should be an interesting day. ... Its witness list includes Sharyl Attkisson and Catherine Engelbrecht. Both have grievances against the Obama administration. Attkisson says the Justice Department hacked her electronic devices when she was investigating “Fast and Furious.” Engelbrecht says the administration unfairly targeted her group, True the Vote. Both have filed lawsuits. Engelbrecht’s has been dismissed.

Both sets of grievances should be taken seriously, but I don’t understand how they materially bear on Lynch’s confirmation. The problems with the Holder Justice Department extend far beyond the particular concerns of Attkisson and Engelbrecht. Republican members presumably take it as a given that if they can expect a repeat performance under Lynch, then she is not a suitable replacement.

The key, then, is not to attack Holder but to test the extent to which Lynch professes allegiance to his policies. Whatever her private views, Lynch will not endorse, as a general matter, hacking journalists’ computers or having the IRS target conservative advocacy groups.

The Hill, Stonewalled author Attkisson to Testify on Obama’s AG Nominee:

Also testifying will be Catherine Engelbrecht, the founder of the Tea Party-aligned True the Vote, which was unfairly targeted by the IRS, she has said, when it attempted to seek tax-exempt status. ...

The inclusion of Attkisson and Engelbrecht points to a fiery hearing that could turn into a referendum on Holder's time at the helm of the Justice Department. Conservatives accused Holder of politicizing his post to help Obama, and have pointed to the alleged hacking of Attkisson’s devices and the IRS’s targeting of conservative groups as evidence

Newsmax, The Hill: Sharyl Attkisson to Testify at AG Nominee Hearing:

Catherine Engelbrecht, the founder of the tea party-aligned True the Vote, will also be testifying, according to The Hill, which noted that the group had claimed in a lawsuit that it was unreasonably targeted by the IRS when it attempted to seek tax-exempt status.

A federal judge threw out the case against the government brought by Engelbrecht and other conservative groups last October. The proposed testimony of Attkisson and Engelbrecht suggests that the hearing could turn into a contentious affair with the GOP and Democrats battling over Holder's term in charge of the Justice Department.

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January 28, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, January 27, 2015

The IRS Scandal, Day 628

IRS Logo 2National Review, The Attkisson File:

Attkisson is a dogged reporter, and Stonewalled is a gripping book, organized around the Obama-administration scandals she covered at CBS News. With the exception of the IRS scandal, she covered just about all of them: Fast and Furious, green-energy crony capitalism, Benghazi, and Obamacare. Attkisson devotes a chapter to her work on each one.

Each of the scandals falls into a larger pattern of scandal management practiced by the Obama White House. (The reader can infer how the IRS scandal fits the pattern precisely to a T.) Her book is invaluable for how it analyzes and exposes this pattern, combining her reportage and her behind-the-scenes work at CBS News.

The pattern begins with blatant denials — bald lies — and stonewalling. ... Next in the pattern, when the lies fail, comes the attribution of responsibility to the lowest level of bureaucrat. ... Attkisson also shows how the administration, using a technique she calls “controversialization,” disparages any sources and reporters who move the story forward. ...

Stonewalled covers two kinds of scandal: first, the various scandals within the Obama administration; second, the scandalous treatment of these White House scandals by CBS News. With each White House scandal, Attkisson demonstrates the success, more or less, of the Obama administration’s scandal management inside the newsroom at CBS.

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January 27, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Monday, January 26, 2015

The IRS Scandal, Day 627

IRS Logo 2Commentary, Contentions Obama Administration Again Proves It Cannot Be Trusted with Your Data:

Yesterday’s important ObamaCare revelation was the latest in a series of Obama-era developments in which big-government projects prove their conservative critics correct. This particular aspect of the administrative state is, however, worse than incompetence. It’s yet another proof that the government cannot be trusted with the private information it gathers from the public.

This has been an ongoing debate that conservatives have lately been winning handily. Democrats moved to require more transparency in those who make political donations, though the Democrats sought to protect major liberal donor groups like unions. Conservatives said the information would be used to harass and target donors. The Obama administration then promptly proved conservatives right, by doing just that.

Then the IRS scandal came to light. Conservative and pro-Israel groups were targeted for nonprofit status, and part of the targeting was invasive questioning. It was unnecessary and unfairly applied, but conservatives also said the IRS couldn’t be trusted with the information. The IRS then proved them right, going on a leaking spree and releasing confidential information, in some cases to ideological allies for cooperative (and very much illegal) targeting. Concerns about government use of private information have infused opposition to gun-control legislation as well.

And now comes perhaps the least surprising entry in the list: the government’s ObamaCare website is sharing insurance customers’ personal information with advertisers.

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January 26, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Sunday, January 25, 2015

The IRS Scandal, Day 626

IRS Logo 2Commentary, Contentions Obama Administration Again Proves It Cannot Be Trusted with Your Data:

Yesterday’s important ObamaCare revelation was the latest in a series of Obama-era developments in which big-government projects prove their conservative critics correct. This particular aspect of the administrative state is, however, worse than incompetence. It’s yet another proof that the government cannot be trusted with the private information it gathers from the public.

This has been an ongoing debate that conservatives have lately been winning handily. Democrats moved to require more transparency in those who make political donations, though the Democrats sought to protect major liberal donor groups like unions. Conservatives said the information would be used to harass and target donors. The Obama administration then promptly proved conservatives right, by doing just that.

Then the IRS scandal came to light. Conservative and pro-Israel groups were targeted for nonprofit status, and part of the targeting was invasive questioning. It was unnecessary and unfairly applied, but conservatives also said the IRS couldn’t be trusted with the information. The IRS then proved them right, going on a leaking spree and releasing confidential information, in some cases to ideological allies for cooperative (and very much illegal) targeting. Concerns about government use of private information have infused opposition to gun-control legislation as well.

And now comes perhaps the least surprising entry in the list: the government’s ObamaCare website is sharing insurance customers’ personal information with advertisers.

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January 25, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Saturday, January 24, 2015

The IRS Scandal, Day 625

IRS Logo 2OpenSecrets.org, In the Garden of Dark Money, the Thorny Case of Rosebush Corp.:

Ever since news broke in 2013 that the IRS had targeted the exemption applications of tea party and some other politically-oriented groups for extra scrutiny, conventional wisdom had it that the agency throws up roadblocks for organizations trying to obtain its seal of approval.

But much evidence indicates the IRS backs down without much fuss when groups seeking 501(c)(4) “social welfare” status come calling.

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January 24, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, January 23, 2015

The IRS Scandal, Day 624

IRS Logo 2Wall Street Journal, 7 Down, 1 to Go: An Ungracious Address Even By This President’s Standards, by James Taranto:

In four of the past six midterm elections, voters have administered what is sometimes called a “shellacking” or a “thumpin’ ” to the sitting president’s party. In 1994, 2006, 2010 and 2014, the president’s party lost seats in both houses of Congress and the majority in at least one. In 1995, 2007 and 2011 the president began his State of the Union address with an acknowledgment of the other party’s electoral success. ...

This year’s State of the Union was an ungracious address even by this president’s standards. There was no word of congratulation for the Republicans or even for the new Congress. Worse, Obama extemporaneously taunted his adversaries about his own past electoral success.

“I have no more campaigns to run,” the president declared during the speech’s coda. One suspects that was not intended as an applause line, but applaud some in the audience did. Obama began reading his next sentence, then interrupted with a #humblebrag: “My only agenda—I know because I won both of them.”

To which we add the obligatory asterisk: While it is true without qualification that he won the first one, the second came with the assistance of the Internal Revenue Service’s suppression of his opponents. To be sure, one cannot rule out the possibility that he would have won a licit campaign. But then again, it’s not as if it was a 45-7 blowout.

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January 23, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Thursday, January 22, 2015

The IRS Scandal, Day 623

IRS Logo 2Headlines & Global News, Lois Lerner Begged Supervisor To Refrain From Visiting IRS Office Ahead Of 2012 Presidential Election, Bombshell Document Finds:

Ex-IRS official Lois Lerner reportedly pleaded with her supervisor not to deeply inquire about whether the IRS had unfairly targeted Tea Party and conservative groups for tax-exempt status just ahead of the 2012 presidential election, according to new emails obtained by a government watchdog group.

Joseph H. Grant, former Tax Exempt and Government Entities Division deputy director, was specifically asked by Lerner to refrain from visiting the tax agency's Cincinnati office and keep from asking specific questions related to any Congressional inquiries, according to emails obtained by Judicial Watch through a Freedom of Information Act Lawsuit.

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January 22, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Wednesday, January 21, 2015

The IRS Scandal, Day 622

IRS Logo 2New York Times editorial, The Dangerous Erosion of Taxation I.R.S., Already Hobbled, Likely to Be Further Damaged:

The obsession among House conservatives to hobble the Internal Revenue Service is about to pay off this tax season in foolhardy budget cuts to the agency that will cost the government an estimated $2 billion in lost revenue.

That works out to about $6 in lost taxes for every $1 in cuts Congress made in reducing the I.R.S. budget another 3 percent this year, according to the Treasury Department.

The slashed budget is a victory for penny-wise-and-pound-foolish politicians. It amounts to payback demanded by House Republicans to penalize the I.R.S. for daring to scrutinize Tea Party operations that tried to claim exemptions under the tax code for nonpolitical groups. Democratic groups trying the same thing were also scrutinized.

Undermining the I.R.S. was part of the overall budget deal worked out by House Republicans, Senate Democrats and the White House. The agency — hardly the most popular of essential government offices — had too few defenders in the horse-trading. It is likely to suffer even more damage under the new Republican-controlled Congress.

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January 21, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, January 20, 2015

The IRS Scandal, Day 621

IRS Logo 2New York Sun op-ed, Logic of Firing IRS Chief Comes Into Sharp Focus As Agency Bridles at Budget, by Stephen Moore (Heritage Foundation):

The Internal Revenue Service now says that taxpayers had better get used to shabby service from the tax collection agency. The IRS is hardly an agency known for warm and friendly service to begin with. Complaining about belt tightening budget cuts, this week IRS Commissioner John Koskinen lectured: “People who file paper tax returns could wait an extra week — or possibly longer —to see their refund. Taxpayers with errors or questions on their returns that require additional manual review will also face delays.” ...

Congress needs to hold the IRS accountable and demand the firing of Mr. Kostiken because he has he admitted openly he can’t do his job. The IRS is nearly an $11 billion a year agency with some 100,000 employees. Congress wants to cut its budget by less than 4% and the agency says it can’t function. During the recession many businesses took cuts of 30% or 40%, and they did it by becoming more efficient and cutting waste. Meanwhile the IRS has spent millions of dollars on conferences at exotic resorts for its employees with some suites costing $3,000 a night. And Mr. Koskinen says he can’t find places to cut.

The IRS has also been rocked by scandals of targeting, abusing and financially harming individuals and conservative groups it doesn’t agree with. Maybe it could shut down that division and use those resources to help taxpayers. Instead of showing remorse the agency brass is petulant. The attempt to extort more tax dollars out of taxpayers is the so-called Washington Monument ploy, and Congress should demand an immediate private audit of the agency’s spending habits.

Washington demands full accountability and accuracy from tax filers, but the tax collection department is the least accountable agency of government. If the IRS can’t administer the tax code with 100,000 employees, it sounds like we need a new IRS and a new tax system.

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January 20, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Monday, January 19, 2015

Martin Luther King, Jr. and the IRS

In honor of Martin Luther King, Jr. Day:  Tallahassee Democrat, Dr. Martin Luther King Jr. and the IRS:

This past year, much ado was made about the so-called “IRS-Gate” and concerns that the Obama administration may have used the agency to target Tea Party and other right wing groups. ... [W]hat often is not stated during the Martin Luther King Holiday weekend is that King, early in his leadership of the Southern Christian Leadership Conference (SCLC), was routinely subjected to IRS audits of his individual accounts, SCLC accounts as well as accounts of his lawyers, first starting during the administration of President Dwight Eisenhower and continuing through the Kennedy administration. ...

[B]y 1962, King had settled with the IRS for a mere $500 dollars for a deduction that he could not explain to auditors. Two years earlier, in February of 1960, a Montgomery, Alabama Grand Jury made King the first person ever charged in that state with criminal tax fraud charges, alleging that in 1956 and 1958, that King through the Montgomery Improvement Association, the organization that had led the successful bus boycotts in that city and was the precursor to the SCLC, had failed to pay the state approximately $45,000 that it was owed in taxes. ...

Looking back, that King was even indicted proved and proves that when necessary, there were and remain many other Americans who were and are more than willing to use the IRS and other tax authorities to harrass individuals and organizations with which they disagree.

(Click on YouTube button on bottom right to view video directly on YouTube to avoid interruption caused by blog's refresh rate.)

January 19, 2015 in Celebrity Tax Lore, IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 620

IRS Logo 2Wall Street Journal editorial, The IRS Is Not Here to Help You: The Agency Will Punish Tax Filers For its Own Stonewalling:

Hard to believe, but the Internal Revenue Service says its customer service is about to get worse. Commissioner John Koskinen wrote to employees this week: “We now anticipate an even lower level of telephone service than before, which raises the real possibility that fewer than half of taxpayers trying to call us will actually reach us.” A new report from the IRS’s Taxpayer Advocate Nina Olson suggests that the odds of some taxpayers getting satisfactory answers could literally be zero. ...

As a responsible chief executive, President Obama has been aggressively managing this agency crisis to ensure the least disruption for taxpayers most in need. Just kidding. ...

The IRS is pleading poverty due to recent cuts imposed by Congress, which is frustrated with the agency’s lack of cooperation investigating IRS abuse of conservatives. But while Ms. Olson emphasizes budget cuts in bringing the IRS to this pass, she also cites the agency’s failure to prioritize and the targeting of Tea Party groups that eroded public trust.

From 1997 to 2012 the IRS budget increased 64% to $11.8 billion in nominal dollars. IRS abuse of the President’s philosophical opponents came to light in 2013. Agency stonewalling—plus a less friendly environment for discretionary spending given federal debt of more than $18 trillion—resulted in a new budget of $10.9 billion. So now the agency is cutting key services and threatening delayed refunds as it pressures Congress to re-open the budget spigot.

If the IRS continues to stonewall the political targeting investigation, as Mr. Koskinen has, then the only tool Congress has to express disapproval is the power of the purse. In any case it’s hard to imagine the IRS could offer worse service than it already does.

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January 19, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Sunday, January 18, 2015

The IRS Scandal, Day 619

IRS Logo 2USA Today, IRS Boss: Please Don't Call During Filing Season:

Grover Norquist, the anti-tax crusader behind Americans for Tax Reform, accused the IRS Wednesday of employing the "Washington Monument" strategy of cutting the most popular programs in response to budget cuts.

It's an allegation Koskinen denied. "It's clearly Illusory at this point that you can cut the budget any further and not have an impact," he said. "If I wanted to do a Washington Monument, I'd shut the place down in the middle of filing season, to demonstrate to people what it would look like. Obviously, we want to do anything but that."

Wall Street Journal, Taxman Shrugged: Will the IRS Go on Strike?, by James Taranto:

[A]nother law-enforcement agency is threatening to follow suit. “Taxpayers could see delays in getting their refunds this year—as well as ‘unacceptable’ customer service—as the IRS commissioner warns budget cuts are forcing the agency to cut back,” Fox News reports. ...

It’s all rather comical—but also galling. The IRS’s abuse of power in its harassment of conservative nonprofits aimed in substantial part at suppressing opposition to ObamaCare. That is, the IRS traduced the free-speech rights of citizens in order to preserve a law expanding IRS power and creating more work for IRS agents.

Now the commissioner complains that the IRS has too much work and not enough resources and threatens to make life even more difficult for taxpayers. It’s like the guy who killed his parents and then pleaded for mercy because he was an orphan.

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January 18, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, January 17, 2015

Thomas West Named Tax Legislative Counsel

WestThomas C. West, Jr. (J.D., Temple; LL.M. (Taxation), Georgetown), Deputy Tax Legislative Counsel in the U.S. Treasury Department, has been named Tax Legislative Counsel, replacing Lisa Zarlenga, who served in the positiojn for four years. Prior to joining the Treasury Department, Mr. West was a shareholder at Greenberg Traurig. Previously, he worked at both Ernst & Young and PricewaterhouseCoopers.

January 17, 2015 in IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 618

IRS Logo 2The Blog of the Legal Times, Feds Take Pro-Israel Group's IRS Suit to DC Circuit:

The U.S. Department of Justice is challenging a Washington federal trial judge’s ruling to keep alive a suit that a pro-Israel advocacy group brought over alleged Internal Revenue Service discrimination.

Lawyers with the DOJ Tax Division on Wednesday filed a notice of appeal with U.S. Court of Appeals for the D.C. Circuit, asking the court to review U.S. District Judge Ketanji Brown Jackson's May ruling in favor of Z Street, the plaintiff in the case against the IRS.

Pennsylvania-based Z Street, which advocates for and defends Israel, sued the IRS over what the group claimed was viewpoint discrimination that violated the First Amendment. The organization has claimed that its application for tax-exempt status in 2009 received extra IRS scrutiny due to differing opinions it and the Barack Obama administration have on Israel.

The government argued that the Anti-Injunction Act prohibited Z Street's lawsuit. The law bars cases that seek to restrain the assessment of taxes.

In refusing to dismiss the case, Jackson wrote in an opinion that the group "seeks only to have its application—good or bad—be evaluated using the same standards are criteria that apply to other organizations that the IRS reviews."

(Hat Tip: Ted Seto.)

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January 17, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Friday, January 16, 2015

The IRS Scandal, Day 617

IRS Logo 2Headline & Global News, Ted Cruz Urges GOP-led Congress To Shut Down The IRS, Claims It Will Be 'The Single Most Important Tax Reform':

The new GOP-led Congress should wield its power to officially shut down the Internal Revenue System, Republican Sen. Ted Cruz said on Monday.

At Heritage Action's 2015 conservative policy summit, Cruz claimed that Republicans should take advantage of their control of Congress to abolish the U.S. government tax agency, The Daily Caller reported.

"We need to pass fundamental tax reform making our tax code simpler, flatter, fairer," he said. "And I'll tell you, the single most important tax reform, we should abolish the IRS."

"The last two years have fundamentally changed the dynamics of this debate [on the tax code]," he continued. "As we have seen the weaponization of the IRS, as we have seen the Obama administration using the IRS in a partisan manner to punish its political enemies."

"In my view there is a powerful populist instinct to take the 110,000 employees at the IRS, to padlock the building, and to put all 110,000 of them down on our southern border."

Ex-IRS official Lois Learner, who headed the IRS division, has been accused of processing Tea Party and conservative groups' for tax exempt status in an unfair manner before the 2010 and 2012 elections, including the IRS who improperly delayed dozens of applications for years, according to an internal audit by the agency's inspector general. Documents show that some liberal groups were singled out, too, Politico reported.

Since the scandal broke in 2013, documents from various agencies and individuals have been requested by GOP-led House committees, with IRS claiming to have spent $10 million in compliance of such requests. But Lerner, who was placed on administrative leave shortly after the scandal broke, and has since retired, remained the focal suspicion of the controversy, repeatedly denying any illegal behavior.

Although Cruz acknowledged that it might not be entirely possible to eradicate the IRS or adopt a flat tax while Obama is in office, he said bold steps could be taken to reduce the power of Washington by simplifying the tax code and reducing the burden of American citizens, according to The Daily Caller.

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January 16, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Thursday, January 15, 2015

Brunson: It Is Time for the IRS to Enforce the Prohibition on Campaigning by Churches

CHurchSamuel Brunson (Loyola-Chicago), Dear IRS, It Is Time to Enforce the Campaigning Prohibition. Even Against Churches:

In 1954, Congress prohibited tax-exempt public charites, including churches, from endorsing or opposing candidates for office. To the extent a tax-exempt public charity violated this prohibition, it would no longer qualify as tax-exempt, and the IRS was to revoke its exemption.

While simple in theory, in practice, the IRS rarely penalizes churches that violate the campaigning prohibition, and virtually never revokes a church’s tax exemption. And, because no taxpayer has standing to cuhallenge the IRS’s inaction, the IRS has no external imperative to revoke the exemptions of churches that do campaign on behalf of or against candidates for office.

This argment makes the normative case that, notwithstanding the IRS’s administrative discretion and the inability of taxpayers to challenge its nonenforcement in court, the time has come for the IRS to begin enforcing the campaigning prohibition.

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January 15, 2015 in IRS News, Scholarship, Tax | Permalink | Comments (5)

Wednesday, January 14, 2015

National Taxpayer Advocate Releases Annual Report to Congress

NTATaxpayer Advocate Nina E. Olson today released (IR-2015-2) her 2014 Annual Report to Congress:

National Taxpayer Advocate Nina E. Olson today released her 2014 annual report to Congress, which expresses concern that taxpayers this year are likely to receive the worst levels of taxpayer service since at least 2001 when the IRS implemented its current performance measures.  The report recommends that Congress enact a principles-based Taxpayer Bill of Rights, adopt additional safeguards to make those rights meaningful, and provide sufficient funding to make the “Right to Quality Service” a reality.

In the preface to the report, Olson emphasizes four points:

  • “First, the budget environment of the last five years has brought about a devastating erosion of taxpayer service, harming taxpayers individually and collectively;
  • “Second, the lack of effective administrative and congressional oversight, in conjunction with the failure to pass taxpayer rights legislation, has eroded taxpayer protections enacted 16 or more years ago;
  • “Third, the combined effect of these trends is reshaping U.S. tax administration in ways that are not positive for future tax compliance or for public trust in the fairness of the tax system; and
  • “Fourth, this downward slide can be addressed if Congress makes an investment in the IRS and holds it accountable for how it applies that investment.”

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January 14, 2015 in IRS News, Tax | Permalink | Comments (1)

The IRS Scandal, Day 615

IRS Logo 2Washington Times, IRS Keeps Albuquerque Tea Party in Limbo 5 Years After Tax-exempt Status Application:

Before there were the lost Lerner emails, the congressional hearings and the retaliatory budget cuts, there was the Albuquerque Tea Party, a group of politically minded folks in New Mexico who wanted to get together and share ideas for taking back their country. The IRS had other ideas about them.

Five years after the Albuquerque Tea Party applied for tax-exempt status under section 501(c)(4) of the tax code, they remain in limbo — their application apparently no closer to being approved or denied than it was the day they mailed it to the IRS on Dec. 29, 2009.

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January 14, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, January 13, 2015

The IRS Scandal, Day 614

IRS Logo 2Politico, GOP Set to Strengthen Committee Chairmen’s Subpoena Power; One Democrat Says the Move Amounts to ‘Exporting the Issa Model.’:

House Republicans are about to give more of their committee leaders the same unilateral subpoena power that former Oversight Chairman Darrell Issa wielded against the Obama administration in his probes into the Internal Revenue Service and “Fast and Furious.” ...

Democrats denounce the moves as a power grab, repeating their complaints that Issa (R-Calif.) “abused” his subpoena authority by bombarding the administration with hundreds of demands when he led the Oversight and Government Reform Committee. But Republicans say it’s necessary after Obama’s agencies stonewalled GOP-led probes into the IRS, the health care law, the Fast and Furious gun-walking program and the 2012 attacks in Benghazi, Libya.

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January 13, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, January 12, 2015

Driessen: Should Tax Lawyers Mount an Inchon Invasion at CBO?

DriessenTaxProf Blog op-ed:  Should Tax Lawyers Mount an Inchon Invasion at CBO?, by Patrick Driessen (former revenue estimator, Joint Committee on Taxation and Treasury Department):

The two top tax policy positions in the federal government, the Chief of Staff of the Joint Committee on Taxation and the Assistant Secretary for Tax Policy at the Treasury Department, are occupied by economists Tom Barthold and Mark Mazur. With the exception of Larry Woodworth (who held both positions consecutively in the 1960s and 1970s), up until now JCT and Treasury heads were esteemed tax lawyers. Although Barthold and Mazur have been known to frequent with lawyers and in the past both have undertaken typical legal tasks like statutory drafting and long footnoting, make no mistake about it: The current top JCT and Treasury tax staffers are economists through and through -- they likely believe in the concept of imputed rental value of home ownership, the marginal disutility of income, and yes, notwithstanding what happened to Larry Summers, maybe even the theoretical possibility of exporting pollution from the United States (provided there are proper side payments).

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January 12, 2015 in Congressional News, IRS News, Tax | Permalink | Comments (0)

TIGTA: IRS Made $14.5 Billion in Erroneous of EITC Payments in 2013, a 24% Error Rate

TIGTA The Treasury Inspector General for Tax Administration has released The Internal Revenue Service Is Working Toward Compliance With Executive Order 13520 Reporting Requirements (2015-40-009):

Although the IRS has reported an overall decline in the Earned Income Tax Credit (EITC) improper payment rate since Fiscal Year 2003, the amount of payments made in error has increased from $10.5 billion in Fiscal Year 2003 to $14.5 billion in Fiscal Year 2013. The IRS’s Fiscal Year 2013 EITC improper payment report to TIGTA estimates that in Fiscal Year 2013, EITC claims totaled approximately $60 billion and that 24 percent of the EITC payments were paid in error.

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January 12, 2015 in Gov't Reports, IRS News, Tax | Permalink | Comments (1)

The IRS Scandal, Day 613

IRS Logo 2CNN, IRS Scandal Fast Facts:

Here’s some background information about the Internal Revenue Service (IRS) scandal involving the targeting of certain groups. In May 2013, the Treasury Inspector General for Tax Administration released a report indicating the targeting involved delaying the processing of applications by certain conservative groups and requesting information from them that was later deemed unnecessary.

The Justice Department is investigating circumstances surrounding the disappearance of IRS emails that Republicans believe could shed light on the possible targeting of conservative and other political groups by the agency.

Other Facts:
The investigation into the email disappearance, which the IRS said was due to a crash of former IRS official Lois Lerner’s hard drive, is part of a wider criminal probe of whether any IRS employees broke the law in unfairly singling out specific political groups for extra scrutiny.

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January 12, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Sunday, January 11, 2015

The IRS Scandal, Day 612

IRS Logo 2Washington Post:  Questions For Attorney General Nominee Loretta Lynch, by George F. Will:

Senate confirmation hearings put nominees on notice that, as a Michigan state legislator reportedly once said, “I’m watching everything you do with a fine-toothed comb.” Loretta Lynch, a talented lawyer and seasoned U.S. attorney, should be confirmed as attorney general. Her hearing, however, should not be perfunctory. Questions like the following would highlight some festering problems: ...

The Justice Department has been, to say no more, unhelpful regarding attempts to fully investigate and properly punish the politicization and corruption of the Internal Revenue Service. Given the department’s seeming complicity in the coverup, would it not be appropriate to appoint a special prosecutor to investigate the IRS practice of suppressing the political activity of conservative groups?

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January 11, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, January 10, 2015

NY Times: How the Tax Law Subsidizes Private Art Collections of the Rich and Famous

New York Times, Writing Off the Warhol Next Door: Art Collectors Gain Tax Benefits From Private Museums:

Brant 2The Brant Foundation Art Study Center — a picturesque gallery space inside a converted 1902 stone barn — is just down the road from the Greenwich, Conn., estate of its creator, Peter M. Brant, the newsprint magnate and avid art collector. There are no identifying signs for the center, whether at the turnoff on North Street, at the security gate or on the building itself, though the location is known to the art-world cognoscenti and celebrities who attend the twice-a-year gala openings, held at the private polo club next door that Mr. Brant also founded. Visits to the center itself are by appointment only.

Mr. Brant’s five-year-old museum, cloistered as it is, nonetheless is the beneficiary of what is in effect a federal subsidy. Operated by a nonprofit charitable foundation created and controlled by Mr. Brant, this cozy museum is tax-exempt.

Wealthy collectors, of course, have long saved millions of dollars in federal taxes by donating art and money to museums and foundations. But what distinguishes Mr. Brant’s center and a growing number of private tax-exempt exhibition spaces like it is that their founders can deduct the full market value of any art, cash and stocks they donate, even when the museums are just a quick stroll from their living rooms.

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January 10, 2015 in IRS News, Tax | Permalink | Comments (1)

The IRS Scandal, Day 611

IRS Logo 2Washington Post, Shrinking IRS Struggles to Keep Up With Growing Number of Tax-exempt Charities:

Remember when conservatives accused the Internal Revenue Service of being too aggressive toward nonprofit tea party groups? Now the agency faces criticism for the opposite problem, this time related to a different type of tax-exempt organization.

An independent review released last month faulted the IRS for scant oversight of charities, saying the agency examined the groups less frequently while its budget and workforce steadily shrank in recent years.

The Government Accountability Office said in its report that the IRS audited 0.7 percent of charities in 2013, down from 0.81 percent in 2011. By comparison, the agency audited individuals and corporations at rates of 1 percent and 1.4 percent, respectively, in 2013.

Meanwhile, the IRS’s budget decreased by $900 billion after 2010, and its workforce lost 10,000 full-time employees over the same period, according to the review. The staff reductions included 47 positions within the IRS’s exempt-organizations division, which examines charities, nonprofit advocacy groups and other entities that qualify for tax-free status. ...

But congressional Republicans, who now represent a majority in both chambers, have shown little desire to boost the IRS’s resources. A comprehensive spending bill lawmakers passed in December trimmed $346 million from the agency’s budget.

It’s worth noting that the IRS has shown little appetite for challenging tax-exempt groups after its tea party controversy, in which the agency was found to have targeted nonprofit advocacy groups based on their names and policy positions.

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January 10, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Friday, January 9, 2015

The IRS Scandal, Day 610

IRS Logo 2National Review, Ask Lynch About the IRS Scandal:

Confirming a new attorney general is near the top of the new Senate's to-do list. The power not to confirm the president's nominees is near the top of the Republicans' new consignment of political clout. ... They should focus on the president’s AG nominee, Loretta Lynch, and they should refuse to confirm her until she commits to appointing a Special Prosecutor to investigate the IRS.

So long as the Justice Department is controlled by the Obama administration, it's going to obstruct any investigation that might embarrass the White House. ... [T]he IRS’s persecution of Americans of a particular political stripe is far and away the most important scandal of the bunch. It's the defining corruption of the era.

Requiring Lynch to promise a full investigation, headed by a special prosecutor, has ironclad precedent. In 1973, the Senate Judiciary Committee threatened to reject the appointment of Elliot Richardson unless he appointed Archibald Cox as a Watergate special prosecutor. Richardson was confirmed as attorney general on May 25, 1973; a week before that, on May 18, it was announced that "Attorney General-designate Elliot L. Richardson" had appointed Cox, and agreed, per the Judiciary Committee's demands, to give him "an unprecedented degree of independence from Federal interference and influence in investigating and prosecuting the case," according to a contemporaneous report in the Harvard Crimson. (Richardson was a Harvard alumnus.)

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January 9, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Thursday, January 8, 2015

The IRS Scandal, Day 609

IRS Logo 2Tribune-Review, BNY Mellon Hires Official Who Headed IRS During Tea Party Targeting:

Bank of New York Mellon hired a former Internal Revenue Service commissioner who modernized the agency's infrastructure but later was the subject of criticism from congressional Republicans over his handling of what they believed was a conspiracy targeting conservative groups.

Douglas Shulman, 47, was appointed senior executive vice president and global head of Client Service Delivery at BNY Mellon and joined the firm's executive committee, the bank said Wednesday.

He will oversee more than 18,500 employees at the world's largest custody bank, BNY Mellon said. He brings experience using technology to manage immense amounts of financial data, most notably in his previous job as commissioner of the IRS from 2008 to 2012. ...

Shulman's time at the IRS has been the subject of political controversy. The agency under his watch was accused of targeting conservative groups seeking a tax exemption. Starting in 2010, an IRS unit picked certain organizations for intensive scrutiny based on their politics, particularly those identifying with so-called Tea Party conservatives, according to a May 2013 report from the Treasury Inspector General for Tax Administration.

Shulman, who was appointed by President George W. Bush in 2008, told Congress before the report was released that there was no targeting happening. Once the general inspector's report emerged, he faced skeptical Republicans on the Senate Finance Committee who said he should have known about the practice and moved to shut it down.

Shulman said he was “dismayed” by the report's conclusions, but he admitted no wrongdoing on his part.

“I certainly am not personally responsible for creating a list that had inappropriate criteria on it,” Shulman told the committee, adding “With that said, this happened on my watch. And I very much regret that it happened on my watch.”

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January 8, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Wednesday, January 7, 2015

The IRS Scandal, Day 608

IRS Logo 2Forbes: Report On IRS Targeting Of Conservatives - No Christmas Pony For Darrell Issa, by Peter J. Reilly:

When I look at the report of Darrell Issa’s Committee on Oversight and Government Reform issued on the eve of Christmas Eve, I can’t help but think of the story of the kid with parents concerned about his excessive optimism.  Their therapist, who must have been quite malevolent, suggested that on Christmas morning, there be no presents under the tree and a stocking filled with horse dung.  That Christmas morning, the house was filled with the delighted shrieks of the young fellow as he ran around the house looking for the pony that Santa Claus must have brought.

Well the report is derived from 1.3 million pages and 52 transcribed interviews.   That’s quite a few stockings full of, well you know.  Still no pony. ... The pony being sought is named Watergate or maybe Watergate Jr. George Will, whose career commenced around the time of Watergate, in February 2014 argued that there have been three major scandals Watergate, IranContra and the IRS Scandal. On the other hand, John Dean, whose career as a public servant was terminated by his Watergate involvement finds comparisons between Watergate and the IRS scandal silly. ...

I recommend that if you are interested in the matter you read the report with an open mind.  Even though it strongly adopts one narrative, all the material for a different narrative is there.  That is why the New York Times can headline its coverage “Probe Fails to Link IRS Scandal to White House”  while Ben Shapiro’s Truth Revolt headlines “Issa Releases Damning Report On IRS Scandal” and leads with “Issa’s report contained emails which seemed to indicate there was visceral hatred of the Tea Party by IRS workers.”  Frankly, even if I just strongly disliked someone, I could come up with something better than calling them “icky”.

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January 7, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, January 6, 2015

The IRS Scandal, Day 607

IRS Logo 2Forbes:  Enough Already On IRS Targeting! Maybe, But Whose Tax Returns Went To White House And Why?, by Robert W. Wood:

We discussed IRS targeting during 8 months of 2013, and all of 2014. It is now 2015. We are all tired of it. Many Democrats accuse conservatives of blowing the IRS scandal out of proportion, conducting a ‘witch hunt.’ They say, as Mr. Obama said to Fox News, that there is not even a smidgen of corruption. Yet it should be no wonder that some people still aren’t so sure. Transparency hasn’t characterized much of what has happened over the course of these 20 months.

To find the missing emails from the key figure who refused to testify, the IRS said it spent $10 million of taxpayer money. Even those expensive recovery efforts were unsuccessful. Then, embarrassingly, the lost or destroyed Lois Lerner emails were recovered after all by the Treasury Inspector General. Among other things, the emails showed Justice Department involvement. Yet that too has been explained with a spin that seems to point the finger at conservatives.

DOJ had to look into conservative organizations, goes the narrative, because they were so bad. Because the focus isn’t on who did what and why, we are still in the dark about much of it. For there are really two scandals. One is alleged targeting, although it really isn’t alleged any longer. Lois Lerner, the IRS, and the Inspector General all admitted it.

Questions remain how involved the administration was, how one-sided it was solely to conservatives, etc. Still, the administration’s gyrations and shifting stories consumed 20 months. A parade of narratives ranged from confused IRS employees, to rogue IRS employees, to lost emails, recycled backups, $10 million of search efforts, and more. It should be upsetting to every American. And it should be embarrassing to government officials, though they do not show it.

Who can blame Americans for being suspicious? It was a whole year into a Congressional investigation before the IRS first said the emails were ‘lost.’ Would such a belated “oh by the way…” ever be tolerated if an American taxpayer voiced it? Even the ‘take the Fifth’ attitude is disturbing, regardless of one’s understanding of our Constitutional protections. As one report slams ‘culture of bias’, is it over-reacting to be bothered by this?

Even if it is, the second IRS scandal, the alleged release of confidential taxpayer data to the White House, is far more debilitating. It too isn’t just alleged. We know it happened. What we do not know is how much was released, whose tax records they were, or who over at the White House requested them. Even worse, we do not know if we will ever know. ...

White House Press Secretary Mr. Josh Earnest has said the Obama administration “has been very rigorous in following all of the rules and regulations that govern proper communications between Treasury officials and White House officials and the Internal Revenue Service.” Maybe that is all true, but this sure looks sloppy or worse. Especially given all the platitudes about transparency, it would be nice if we could get to the bottom of this and then finally move on. After all, it is 2015.

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January 6, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Monday, January 5, 2015

The IRS Scandal, Day 606

IRS Logo 2Human Events, The GOP Controls the Senate: Now What?:

Early in 2015 Republicans in the House and Senate will drive a national debate and actual votes in the House and Senate on the following big five issues—and many more. ...

Reforming the IRS and ending once and for all its abuse of taxpayers by rifling through their tax returns, denying tax status to conservative or tea party groups and their release of confidential donor information to left wing groups. The administration continues to stonewall efforts to investigate the IRS scandal. Now every Democrat congressman and Senator will be able to vote to ally themselves with the American people or with Obama’s politicized IRS. Then they face the voters.

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January 5, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Sunday, January 4, 2015

The IRS Scandal, Day 605

IRS Logo 2Forbes:  Bungled IRS Liens, Levies, Audits...But No Targeting, Just Ask Christine O'Donnell, by Robert W. Wood:

IRS audits are infrequent, usually impacting only a tiny fraction of the populace. Yet if you are audited multiple times, you might think you were targeted. If you are a Tea Party political candidate like former Senate candidate Christine O’Donnell, you might have good reason, especially when the IRS ‘mistakenly’ penalizes you again. She says the IRS audited her for the second time in five years and erroneously levied her bank accounts.

She couldn’t access her checking account as she was preparing to visit relatives. The tea party figure says the IRS mistakenly levied her accounts.“The day before I was heading out of town for the Thanksgiving weekend, my bank told me the IRS had frozen my accounts,” said Ms. O’Donnell. She called the IRS, who said she owed $30,000 in taxes from a 2008 house transaction (one she had fully reported).

She was eventually told the levy was an error and would be released. But the IRS took all her funds, later saying the funds would be returned. The funds have still not been replaced, Ms. O’Donnell said. “They said it was a mistake, and they removed the levy. I’m grateful, but I also wonder what someone with less government experience might do when they find themselves frozen from their money because the IRS got its paperwork mixed up.”

Ms. O’Donnell was asked where she thought her latest IRS run-in fit in the larger controversy over the IRS’s dealings with conservatives. “While I don’t believe in coincidences, it’s possible that this was just bureaucratic bungling. But either way, the IRS has to be held accountable. It needs to do its job right and not target or inconvenience taxpayers unfairly,” she said.

Since the IRS is made up of humans, sometimes the IRS is wrong. Opinions vary whether the IRS has ever targeted people for improper reasons. Richard Nixon supposedly asked the IRS to audit his political enemies. There has been no proof that President Obama tried to influence the IRS in the Tea Party targeting scandal. Yet lost emails from Lois Lerner and other key IRS employees, and numerous changes in the ‘narrative,’ have generated many conspiracy theories.

The topic is always sensitive, and the more it is pooh-poohed, the more tempers flare. For example, Rep. Paul Ryan, R-WI, said, “Nobody believes you,” to IRS Commissioner John Koskinen when the IRS Chief testified that IRS emails really aren’t official records anyhow. As for Ms. O’Donnell, she already had a run in with the IRS when Delaware state authorities accessed her IRS tax file (!) in 2010, right around the time she announced her candidacy.

A story was leaked alleging that she owed back taxes to the IRS. The story was false, and Delaware authorities claim the records check was routine. Even so, a tax lien was placed on a house she had sold two years earlier. The lien was publicized and used to discredit Ms. O’Donnell’s candidacy even though she no longer owned the home in question. The IRS eventually removed the lien, blaming it on a computer error.

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January 4, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, January 3, 2015

The IRS Scandal, Day 604

IRS Logo 2Forbes:  IRS Hid Conservative Targeting Until After 2012 Presidential Election. Smidgen Corrupt?, by Robert W. Wood:

Was the IRS used for politics? It’s a fair question, yet one that suggests an answer when you look at numerous ‘coincidences’ that are too hard to fathom. Add that to that the testimony of key IRS figures and their inconsistent emails. The result is a mismatch revealing an IRS run amok in political spin it later admitted was wrong.

Ironically, a new report issued by the House Oversight and Government Reform Committee concerns some handlers at the IRS who seemed to be playing politics while criticizing conservative organizations for playing politics. That is only one irony wrung from the more than 200 page report. The report summarizes its investigation into the IRS’s treatment of politically active nonprofit groups. ...

Many democrats have dismissed the report as more political theater with facts taken out of context. But it is hard to argue with the facts: A top IRS official considered going public with the agency’s targeting of conservative groups at a hearing just months before the 2012 presidential election. One wonders what might have happened in the election if he had. Ultimately, the IRS official decided against revealing the bombshell news, according to the new House committee report.

The IRS official was none other than the Deputy IRS Commissioner Steven Miller. He would become Acting Commissioner, then would be fired by the President in May of 2013. Would a more prompt disclosure to Congress have made for a different Presidential election?

It is impossible to say, but it is hard to argue with the notion that this truly is political. Mr. Miller wrote to his Chief of Staff in June 2012, a month before a House Ways and Means subcommittee hearing. Significantly, Mr. Miller wrote that he was weighing whether to testify to “put a stake” in the “c4” issue — apparently a reference to allegations about politics playing a role in the agency’s denial of tax-exempt, 501(c)(4) status to conservative groups.

At the very least, the email makes it plain that Mr. Miller was aware of the situation. Mr. Miller ultimately testified on July 25, 2012 but never revealed his knowledge of the IRS misconduct. ...

Mr. Miller testified before Congress six times from May 2012 until May 2013, before being forced to resign. Until the bitter end, Mr. Miller said the targeting was not motivated by politics, but his emails show otherwise. And the administration’s handling of the investigation was appalling, the report claims.

The belated disclosure that emails were destroyed, the who’s-on-first routine about the recycled hard drives, the no smidgen of corruption, were all telling. Too many excuses generally are. How was the administration’s cooperation? The report says that, “Even as recently as July 2014, after the IRS informed Congress that it had destroyed two years of Lerner’s e-mails, the FBI continued its refusal to provide any information about its investigation.”

The Justice Department even considered criminal prosecutions, a topic the Justice Department discussed with disgraced Exempt Organizations Chief Lois Lerner. It’s all rather amazing when one recalls President Obama’s testy “not even a smidgen of corruption” remark to Fox News in February 2014.

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January 3, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, January 2, 2015

The IRS Scandal, Day 603

IRS Logo 2Washington Post, The Year in Review 2014, by Dave Barry:

[I]t was a miserable 12 months. In case you have forgotten why, let’s take one last look back, starting with …

U.S. Secretary of Health and Human Services Kathleen Sebelius, who oversaw the rollout of Obamacare, resigns from the Cabinet to take a position overseeing e-mail storage for the Internal Revenue Service. ...

In Washington scandal news, the Internal Revenue Service, responding to a subpoena, tells congressional investigators that it cannot produce 28 months of Lois Lerner’s e-mails because the hard drive they were stored on failed, and the hard drive was thrown away, and the backup tapes were erased, and no printed copies were saved — contrary to the IRS’s own record-keeping policy, which was eaten by the IRS’s dog. “It was just one crazy thing after another,” states the IRS, “and it got us to thinking: All these years we’ve been subjecting taxpayers to everything short of rectal probes if they can’t produce EVERY SINGLE DOCUMENT WE WANT, and here we lose YEARS’ worth of official records! So from now on, if taxpayers tell us they lost something, or just plain forgot to make a tax payment, we’ll be like, ‘Hey, whatever! Stuff happens!’ Because who are we to judge?”

But all kidding aside, you can bet that before this thing is over there will be a strongly worded report.

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January 2, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, January 1, 2015

The IRS Scandal, Day 602

IRS Logo 2Breitbart:  True The Vote Appeals Dismissal of Lawsuit Against IRS:

True the Vote, a Houston, Texas-based non-profit organization focused on “voters’ rights and election integrity,” has appealed a U.S. District Court’s order dismissing their lawsuit against the Internal Revenue Service (IRS), Breitbart Texas has learned. The lawsuit had alleged that the IRS had improperly delayed granting True the Vote’s application for 501(c)(3) status and targeted them as a conservative organization, but the opinion, issued by Judge Reggie B. Walton in October, found that the IRS had taken sufficient “remedial steps to address the alleged behavior.” In an exclusive interview with Breitbart Texas, True the Vote representatives shared why they believe their appeal is valid and represents an important issue for conservative grassroots organizations to follow.

“The IRS targeting scandal is not over and neither is our effort to seek justice in the federal courts,” said True the Vote Founder Catherine Engelbrecht in a statement provided to Breitbart Texas. “Since the dismissal, ‘lost’ emails specific to our case have been found and assertions that the agency changed its ways have yet to prove true by any verifiable manner. Until the Court fully addresses the IRS’ wrongdoing, the risk of future political abuses without consequences will only compound.” ...

True the Vote’s Notice of Appeal was officially filed with the United States Court of Appeals for the District of Columbia on Thursday, December 18.

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January 1, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, December 31, 2014

The IRS Scandal, Day 601

IRS Logo 2Washington Free Beacon:  IRS Watchdog Continues to Hide Records on White House Leaks; Of 2509 Documents, Government Agrees to Release 31:

An independent IRS monitor announced Monday it will block the release of roughly 400 more pages of documents related to unauthorized leaks of confidential taxpayer information to the White House.

The Treasury Inspector General for Tax Administration (TIGTA) told the watchdog group Cause of Action it would be withholding nearly all of the 2,500 documents it located that were related to unauthorized IRS leaks to the White House. Earlier this month, TIGTA told Cause of Action it was withholding roughly 2,100 of the documents and said it would take an additional two weeks to review the rest.

TIGTA released 31 pages of documents on Monday to Cause of Action, 27 of which were already publicly available. Most were responses to letters from Republican senators.

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December 31, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, December 30, 2014

The IRS Scandal, Days 501-600

December 30, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

The IRS Scandal, Day 600

IRS Logo 2Forbes:  Rev. Al Sharpton's Key Tax Tips...From Lois Lerner, by Robert W. Wood:

In Tell it to the Reverend Al, the New York Post says Rev. Sharpton still owes New York State $916,000 from tax liens filed against him between 2008 and 2010. In all, Mr. Sharpton is said to have $4.5 million of tax liens. He claims he paid them, but state officials say otherwise. This isn’t the first time his records do not line up. Indeed, on two prior occasions he suffered inconvenient fires that destroyed records.

It’s a little like the crash of Lois Lerner’s hard drive. Those fires destroyed Mr. Sharpton’s financial records just as he was about to turn them over to officials. And records are key to tax disputes. As Mr. Sharpton works though his tax problems with or without records, he appears to have a suit made of Teflon, even when it comes to taxes.

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December 30, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, December 29, 2014

The IRS Scandal, Day 599

IRS Logo 2IRS Statement Regarding FOIA Lawsuit:

There are a number of news accounts that incorrectly identify the Internal Revenue Service as being involved in a Freedom of Information Act lawsuit with Cause of Action (D.C. District Court Civil Action No. 1:13-cv-01225-ABJ). That lawsuit involves the Treasury Inspector General for Tax Administration (TIGTA) and its investigations, not the IRS.

Moreover, press and Internet accounts regarding this particular FOIA lawsuit inaccurately suggest that the IRS is withholding documents in the lawsuit. The IRS is not withholding documents in the FOIA lawsuit because the IRS is not a party to the lawsuit. Moreover, any suggestions that the IRS is not cooperating or somehow withholding documents from TIGTA are also inaccurate. The IRS remains committed to cooperating with TIGTA as well as other oversight bodies.

We understand the FOIA lawsuit seeks records relating to TIGTA’s investigations of allegations of improper disclosures — and that TIGTA has identified approximately 2,500 pages worth of records concerning its investigations into such allegations. Based on the public record, there is no basis to conclude that these records identified by TIGTA involve 2,500 taxpayers or tax returns.

Additional questions on this matter should be directed to TIGTA.

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December 29, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Sunday, December 28, 2014

The IRS Scandal, Day 598

IRS Logo 2Forbes:  Exactly What Kind Of A Criminal Might Lois Lerner Be?, by Peter J. Reilly:

If Lois Lerner is a criminal, exactly what kind of criminal is she? If you spend much time reading IRS scandal or, as I like to call it, Teapartygate material, you will often encounter some form of the question that Joe Otto asks in his post titled Why Isn’t Lois Lerner In Prison Yet? , since as he notes “ Lois Lerner’s decision to weaponize the IRS against Tea Party groups is absolutely criminal!”

OK. Well, I’m a little bit of a geek and I’m fairly certain that there is not a section in the United States Code titled – Weaponizing IRS against Tea Party groups -, at least not yet. Give them time. There will probably be a constitutional amendment to say that the Eighth Amendment does not apply in cases of IRS Weaponizing, so that the punishment can be really unusual. Anyway we’re not there yet, so I’ve been trying to figure out what the specific crimes are that Lois Lerner can be charged with. ...

One of the scenarios that fits a lot of the facts that have come out so far is that Lois Lerner was frustrated that people inside the IRS were not serious enough about dark money 501(c)(4) groups being in violation of the law. ... A prosecutor would have to prove that Lois Lerner knew she had a legal duty not to disclose the information to the FBI and chose to violate that duty knowing that the violation was criminal – not that she should have known, rather that she did know.

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December 28, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Saturday, December 27, 2014

The IRS Scandal, Day 597

IRS Logo 2The Hill:  IRS: Search for Lerner Emails Almost Over:

A Treasury inspector general will likely conclude its search for former IRS official Lois Lerner’s missing emails “in the next several weeks,” John Koskinen, the agency’s commissioner, said Thursday.

Once Treasury’s inspector general for tax administration is finished, the Senate Finance Committee would be able to put the final touches on its investigation into the IRS’s singling out of Tea Party groups, something Koskinen said he hoped to see early in 2015.

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

Friday, December 26, 2014

The IRS Scandal, Day 596

IRS Logo 2Newsmax:  Barack Obama IRS Scandal: 8 Key Figures Caught Up in Tea Party Tax Targeting Controversy:

The longer the IRS scandal stays around, the worse it gets. Conservative and, particularly, Tea Party organizations were targeted by the IRS leading up to the 2012 campaign, creating a controversy that surrounds President Barack Obama.

Here are eight key figures involved in it, investigating it, or who were victims of it:

  1. Lois Lerner ...
  2. Douglas Shulman ...
  3. Darrell Issa ...
  4. Jay Carney ...
  5. Tom Fitton ...
  6. Chris Littleton ...
  7. Drew Ryan ...
  8. Catherine Engelbrecht ...

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December 26, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, December 25, 2014

The IRS Scandal, Day 595

IRS Logo 2The Verdict:  Not All Scandals Are Created Equal: The CIA vs. the IRS, by Neil H. Buchanan (George Washington):

When the news of the wrongdoing at the IRS emerged last year, I was one of the people who was most concerned about the possible abuse of power by the agency. Knowing that the IRS had been used in decades past as a political weapon, in particular by the rogue Nixon Administration, it would have been truly horrible if our worst fears had turned out to be true. If there had been a political operation that was using the IRS for partisan purposes, that would have been a scandal.

No one ever said that it was a bad idea to gather evidence, and no one even once suggested that the correct response to any wrongdoing at the IRS would be to “look forward, not backward,” as an excuse to allow guilty parties to walk free. Instead, we all wanted to know whether there was sufficient evidence to suggest that any wrongdoing was directed by political operatives (answering to the White House or others), or instead that this was a matter of isolated bad decisions.

We were fortunate that the scandal became public news because of the release of an inspector general’s report about the IRS employees’ improper screening techniques. Therefore, rather than starting from a blank slate, with everyone in the dark about even the most basic facts, we were presented up front with an independent report that laid bare what had happened.

And once people digested that report, it was obvious that this was not a scandal. Correct procedures had not been developed or followed within the IRS, but internal measures had already corrected the behavior. In fact, we later found out that the inspector general’s report had underreported facts that would have made the situation look even less suspicious, because the “targeting” of political groups actually covered the political spectrum from right to left, whereas the report had initially made it appear that only extreme conservative groups had been subjected to additional scrutiny.

I wrote two columns on Verdict (here and here), as well as some posts on the Dorf on Law blog (for example, here), in which I concluded that this was a “non-scandal scandal.” John Dean (who knows something about the Nixon Administration’s abuse of power) reached the same conclusion in a Verdict column in May 2013, describing the IRS situation (as well as two other candidates for “scandal” status) as “all smoke and no fire.”

Even so, Republicans in the House of Representatives refused to let go of the IRS story, spending thousands of hours and millions of taxpayer dollars trying to gather more evidence of possible wrongdoing. They have failed spectacularly. This must mean either that there is no evidence, or that the evidence is being skillfully hidden.

For those who believe that there might yet be evidence out there regarding this still-not-a-scandal, the question has been what to do next. My colleague Ronald Rotunda, for example, suggested in a recent Verdict column that a special prosecutor should be appointed, with special powers to pry loose evidence that might exist to prove a political connection between the Obama Administration and the IRS’s misdeeds.

Although I strongly disagree with Professor Rotunda’s reading of the evidence and his conclusions, I can at least respect his fundamental concern. If there were sufficient reason to believe that there is hidden evidence, then certainly we would want to pursue such evidence through appropriate means. My take on the current situation is that there is not even much smoke, much less fire, and that any further inquiries are based on little more than the hope among Republicans that such inquiries might turn up something to suggest a real scandal. Those who disagree with that assessment can (and do) argue for further efforts to investigate.

There is, therefore, nothing particularly unusual about the IRS non-scandal, at least categorically. Some government actors did something that they should not have done. We have tried to figure out what happened, and why. The available evidence cannot support any prosecutions. Now, we are arguing about a judgment call regarding when to say that enough is enough.

Dorf on Law:  Playing With Scandals: Everything is a Cynical Farce, by Neil H. Buchanan (George Washington):

[T]he worst-case scenario in the IRS non-scandal scandal was, as I have always acknowledged, truly bad, if it had been true.  If there really were any credible evidence suggesting that the Obama Administration had orchestrated an effort to harm its political opponents by abusing the power of the IRS, that would be scandalous.  Happily, no such evidence has emerged.  Instead, the dead-enders have been reduced to saying, "There must be something going on.  We just need to keep digging."

Why are they so certain that something evil was afoot?  Apparently, they find it hard to believe that their opponents are not as cynical as they are.  (Dick Cheney himself said that the Obama people must have been using the IRS for political ends -- presumably because he could easily see himself doing the same thing.)  Because these people simply believe as a matter of deep commitment that something must be out there, the game is then to infer evil intent from every comment and action by the President.  Remember when Obama, in a State of the Union Speech, criticized the Citizens United decision?  Most people remember that moment because of Justice Alito's angry facial expression, caught on camera.  IRS scandal-mongers, by contrast, have insinuated that there is somehow a connection between Obama's comments and the IRS employees' actions.

Again, however, I concede in the column that this could have been a bad thing.  The people who worry about the IRS possibly being misused for political ends are not worrying about something that is inherently harmless.  They are simply refusing to give up the ghost on an investigation that has gone nowhere, and that shows no signs of ever leading anywhere. ...

One idea that I mention briefly toward the end of the column, but which I do not develop in any detail, is the comparison between possible excuses for refusing to prosecute or investigate the CIA, but to go after the IRS with guns blazing.  Remember, in order even to compare the IRS non-scandal scandal with the CIA torture scandal, we had to "go meta," in order to find some way in which the two situations could be comparably bad.  Once we have done that, however, then we must also be willing to apply the same level of generality to the arguments for and against aggressive prosecution of wrongdoing.  If the argument is, "We would harm America by failing to understand the important public service that the CIA provides," then the argument could also be, "We are harming America by vilifying the IRS." ...

[A]t a sufficiently high level of generality, one could make the argument that the future of America depends on a functioning government, and the government depends on revenue, and the ability to collect future revenues is threatened by politicians "looking backward" and attacking the IRS and its employees (and, hardly coincidentally, cutting its budget even as the IRS's legal responsibilities expand).  Attacking the CIA makes Americans less safe (an assertion that is obviously false)?  Well, attacking the IRS puts American democracy itself at risk!! ...

The common thread, then, is that the CIA's actions must be defended, because doing so reinforces the notion that the government is lawless (and always will be), while the IRS must be attacked because it is essential for the cynics to make everyone believe that the government is out to get them.  The less trust we have in our institutions, the better for those who want to further pervert those institutions.

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December 25, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, December 24, 2014

The IRS Scandal, Day 594

IRS Logo 2U.S. House of Representatives Committee on Oversight and Government Reform, The Internal Revenue Service’s Targeting of Conservative Tax- Exempt Applicants: Report of Findings for the 113th Congress (Dec. 23, 2014) (226 Pages):

The Committee’s investigation has resulted in the following findings to date about the Internal Revenue Service’s inappropriate treatment of tax-exempt applicants:

  • The Internal Revenue Service targeted conservative-oriented applicants for taxexempt status;
  • Unlike applications from conservative groups, the small batch of applications from liberal-oriented groups received additional scrutiny for non-political reasons. Of the applications that received additional scrutiny, only seven contained the word “progress” or “progressive,” all of which were subsequently approved by the IRS, while Tea Party groups were subjected to an unprecedented degree of review and years-long delays.
  • Senior Internal Revenue Service officials covered up the misconduct and misled Congress about the existence and nature of the targeting;
  • The Internal Revenue Service sought to rein in conservative-oriented non-profits as early as 2010;
  • The Administration is using the targeting as pretext to support its proposed regulation to limit political speech of conservative non-profits;
  • Mismanagement among the senior leadership of the Internal Revenue Service contributed to the targeting;
  • The Internal Revenue Service and the Obama Administration knowingly and wrongly blamed line-level employees for the misconduct;
  • Employees of the Internal Revenue Service inappropriately used non-official e-mail to conduct official government business;
  • The Internal Revenue Service has compromised its traditional position as an independent tax administrator;
  • The Obama Administration exhibited a lack of accountability for the IRS misconduct;
  • Lois Lerner’s refusal to testify hindered the Committee’s investigation;
  • The Internal Revenue Service obstructed the Committee’s investigation; and
  • The White House and congressional Democrats obstructed the Committee’s investigation.m

New York Times:  Inquiry Into I.R.S. Lapses Shows No Links to White House:

An 18-month congressional investigation into the Internal Revenue Service’s mistreatment of conservative political groups seeking tax exemptions failed to show coordination between agency officials and political operatives in the White House, according to a report released on Tuesday.

The I.R.S. has admitted that before the 2012 election it inappropriately delayed approval of tax exemption applications by groups affiliated with the Tea Party movement, but the I.R.S. and its parent agency, the Treasury Department, have said that the errors were not motivated by partisanship.

Wall Street Journal, IRS Considered Tax on Donations to Political Groups; Move Could Have Disproportionately Hurt Conservative Activists:

Internal Revenue Service officials considered imposing a tax on large donations to many tax-exempt political organizations in 2011, recently released emails show, a move that could have disproportionately hurt conservative activists.

The discovery comes as part of Republican lawmakers’ broader investigation into the IRS’s treatment of conservative groups. It is further fueling GOP suspicions that some agency officials sought to suppress conservatives’ use of tax-exempt organizations for political speech.

The internal emails “demonstrate that the IRS sought to use the gift tax as one part of a larger effort to crack down on the political speech” of conservative tax-exempt groups, said Rep. Darrell Issa (R., Calif.), the chairman of the House Oversight and Government Reform Committee. ...

The separate IRS effort to impose gift tax on big donors to tax-exempt organizations has gotten less attention. But GOP lawmakers are concerned about the gift-tax effort since it first surfaced in 2011, in part because conservatives have made extensive use of nonprofit entities, such as Crossroads GPS, in recent years for political outreach to voters.

Establishing such groups as tax-exempt entities is attractive, because it allows organizers to keep donors’ identities secret. Imposing a gift tax on those donations could discourage them, advocates fear. The top gift tax rate was 35% in 2011 and is now 40%.

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

Tuesday, December 23, 2014

The IRS Scandal, Day 593

IRS Logo 2Daily Caller:  BOMBSHELL REPORT: IRS Targeted ‘Icky’ Conservative Groups:

Top IRS officials specifically targeted tea party groups and misled the public about its secret political targeting program led by ex-official Lois Lerner, according to a bombshell new congressional report.

The Daily Caller has obtained an advance copy of a House Oversight and Government Reform Committee report set to be released Tuesday morning that definitively proves malicious intent by the IRS to improperly block conservative groups that an IRS adviser deemed “icky.” (That’s right. “Icky.”)

“The Committee has identified eight senior leaders who were in a position to prevent or to stop the IRS’s targeting of conservative applicants,” the Oversight report states. “Each of these leaders could have and should have done more to prevent the IRS’s targeting of conservative tax-exempt applicants.”

Here are six major takeaways from the report:

  1. The IRS admitted that the front office was “spinning” about the targeting rumors as early as 2012, after IRS commissioner Douglas Shulman denied the tea party targeting to Congress. ...
  2. Then-IRS commissioner Steven T. Miller almost broke down and told the truth about the tea party targeting at a July 2012 hearing, but Lerner’s sidekick Nikole Flax told him not to. ...
  3. The IRS definitely treated tea party applications by a different standard than applications from other (c)(4) groups. ...
  4. Lois Lerner expressed her frustration about having to potentially approve a lot of groups, and her colleagues in the agency assured her that she wouldn’t have to. ...
  5. So the IRS reached out to outside advisers to help come up with ways to deny tax-exempt status to “icky” organizations. ...
  6. A May 2011 email from a lawyer in the IRS chief counsel’s office made clear that the agency sought to use a new “gift tax” to target donors to nonprofit political groups.

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December 23, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Monday, December 22, 2014

The IRS Scandal, Day 592

IRS Logo 2American Thinker:  How to Break Through the IRS Stonewall:

The Internal Revenue Service is currently employing a naked Catch-22 strategy in order to prevent disclosure of its potential misdeeds in disclosing private taxpayer information on conservatives to the White House.  The conservative legal group Cause of Action filed a Freedom of Information request in 2012, asking for documents that relate to disclosure, and was stonewalled, so then filed suit.

An Obama appointee, Judge Amy Berman Jackson, ruled for Cause of Action and ordered Treasury to search for them.  The Treasury Inspector General for Tax Administration (TIGTA) has disclosed that 2,500 have been found.  This is where the Catch-22 was invoked.  Because it is illegal to share private taxpayer information, the IRS is claiming that it would be illegal for it to reveal evidence of its disclosure of such information.  You have to admire the chutzpah. ...

I suspect there would be as much stonewalling as possible, but with two years in which to act, there could be ample opportunity for Congress to get to the bottom of this, especially since Judge Jackson has made her first ruling and does not seem to want to be flouted.  As the lame-duck Obama administration draws to a close, there will be a potential decision point for Democrats in Congress if the worst suspicions of politicizing the IRS appear to be turning out to be confirmed.  If it looks like evidence will be developed showing that the IRS and White House violated the law, Chick Schumer’s admission that Obamacare was a mistake could look in comparison like a day at the beach for the Obama wing of the party.

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December 22, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Sunday, December 21, 2014

The IRS Scandal, Day 591

IRS Logo 2Daily Caller:  Obama Admin Releases ONE PERCENT Of Its Documents About IRS-White House Coordination:

The Treasury Department released four new redacted pages of documents about the White House’s role in the Internal Revenue Service targeting scandal, bringing the total number of pages released up to 31 — a whole one percent of the total number of pages.

A federal court judge in the advocacy firm Cause of Action’s lawsuit against the Treasury inspector general set Jan. 30 as a starting date to begin briefings on whether or not the firm can get at the documents.

The Cause of Action federal court case for the documents was successful, thanks to the Freedom of Information Act. But the Justice Department began trying to delay the release of the documents by a matter of two weeks. Treasury Secretary and former Obama White House chief of staff Jacob Lew then seized the documents.

Lew is arguing that because the White House and IRS illegally exchanged confidential taxpayer information, then releasing the documents would be an illegal disclosure of confidential taxpayer information.

As The Daily Caller reported, at least some of the confidential taxpayer information the IRS’ Lois Lerner dished out went to senior White House domestic policy adviser Jeanne Lambrew.

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December 21, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)