In a week packed with all sorts of excitement in the United States, a partial resolution to one of the biggest scandals of the Obama Administration seems to be in the offing and no one noticed. Buried in a cache of over 5,000 pages of documents (emails, largely) from the Internal Revenue Service to Judicial Watch as part of a Freedom of Information Act lawsuit, were several pieces to the puzzle of the IRS targeting the TEA Party.
The episode appears to begin with a letter in September 2010 from then Sen. Max Baucus (D-MT) to then IRS Commissioner Douglas Shulman.
I request that you and your agency survey major 501(c)(4), (c)(5) and (c)(6) organizations …
WHOA! That’s not just anyone asking the IRS to single out organizations that are supposed to exist for the public good, but a senator – and at the time, a fairly powerful one in the Democratic party. So what does Shulman come back with in February 2011?
“In the work plan of the Exempt Organizations Division, we announced that beginning in FY2011, we are increasing our focus on section 501(c)(4), (5) and (6) organizations.”
Okay, so that means that the head of the agency knew that these organizations were under the microscope. At a senator’s request. In that month, at least five donors to the organizations in the spotlight were audited. What the documents show, though, is that audits were not the only tool considered fair game by the IRS.
It seems that there is a law on the books, declared a first amendment violation for donors to 501(c)(4)s by the Supreme Court in 1982 and unenforced for these people since, that charged a 35% gift tax on contributions over $13,000. The IRS thought about dusting this off and making use of it – or something – but they needed to get a look at the donor lists for cross-referencing purposes according to Judicial Watch:
The documents show that the IRS wanted to cross-check donor lists from 501(c)(4) organizations against gift tax filings and commence audits against taxpayers based on this information.
That seems to be why the donor lists were requested for these groups looking to have 501(c)(4) status even if those donor names do not need to be disclosed as the donations are not tax deductible. But, there’s more:
The documents show that Crossroads GPS, associated with Republican Karl Rove, was specifically referenced by IRS officials in the context of applying the gift tax. Seemingly in response to the Crossroads focus, on April 20, IRS attorney Lorraine Gardner emails a 501(c)(4) donor list to former Branch Chief in the IRS’ Office of the Chief Counsel James Hogan. Later, this information is apparently shared with IRS Estate Gift and Policy Manager Lisa Piehl while Gardner seeks “information about any of the donors.”
Except that the IRS was not supposed to be privy to the donor lists of these organizations. In the beginning, the Democrats set it up this way to shield their own donors for “public welfare” non-profits. When Republicans and actual conservatives started using their little scheme against them, well….
So, anyway, even the people at the IRS recognized that if word got out about the targeting of TEA Party groups, and/or their donors, by the IRS, the American people would not be happy. After the New York Times sought information on May 9, 2011, the IRS gang scrambled:
On May 13, 2011, former IRS Director of Legislative Affairs Floyd Williams discusses compliance with “interest” from Capitol Hill: “Not surprisingly, interest on the hill is picking up on this issue … with Majority Leader Reid’s office, has suggested the possibility of a briefing for the Senate Finance Committee staff on general issues related to section 501(c)(4) organizations I think we should do it as interest is likely to grow as we get closer to elections.”
Later that day, then-Director of the Exempt Organizations Lois Lerner weighs in with an email that confirms that she supported the gift tax audits. Lerner acknowledges that “the courts have said specifically that contributions to 527 political organizations are not subject to the gift tax–nothing that I’m aware of that about contributions to organizations that are not political organizations.” Section 501(c)(4) organizations are not “political organizations.” [Emphasis in original]
No wonder Lois Lerner pleaded the fifth. Within a few weeks of that email exchange, the IRS Commissioner was replaced with Steven Miller who ordered all of these investigations closed. So Miller is not the guilty party here. However, Lois Lerner is among those who are. And Judicial Watch had to sue the IRS to get the proof that she was.
Four years after the events that lead to the scandal that saw many people who had never so much as stepped on the line between legal and not terrified when they were audited by the IRS, a government agency with far more power than any government entity other than true Justice should have, the truth about what really happened is beginning to come out. It is not pretty, and it is going to get worse.
“These documents that we had to force out of the IRS prove that the agency used donor lists to audit supporters of organizations engaged in First Amendment-protected lawful political speech,” said Judicial Watch President Tom Fitton. “And the snarky comments about the U.S. Chamber of Commerce and the obsession with Karl Rove’s Crossroads GPS show that the IRS was targeting critics of the Obama administration. President Obama may want to continue to lie about his IRS scandal. These documents tell the truth – his IRS hated conservatives and was willing to illegally tax and audit citizens to shut down opposition to Barack Obama’s policies and reelection.”
And that was part of the effort to get Barack Obama a second term to be able to “fundamentally transform” the United States. For more observations on this episode of “How the Republic Turns” Ed Morrissey at HotAir has a piece today.