IRS Targeted Candidates for Public Office, Violated Donor and Candidate Tax Record Confidentiality

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The Treasury Department’s Inspector General for Tax Administration, J. Russell George, acknowledged that government officials improperly accessed and examined the confidential tax records of several political candidates and campaign donors. The admission came after a request by Senator Charles Grassley (R-IA), the ranking Republican member of the Judiciary Committee.  While the Justice Department has refused to prosecute any of the cases, the Inspector General outlined four cases since 2006 in which government officials engaged in the “unauthorized access or disclosure of tax records of political donors or candidates.”

Senator Grassley requested that Attorney General Eric Holder explain why the Justice Department declined to prosecute:

“The Justice Department should answer completely and not hide behind taxpayer confidentiality laws to avoid accountability for its decision not to prosecute a violation of taxpayer confidentiality laws. With the IRS on the hot seat over targeting certain political groups, it’s particularly troubling to learn about ‘willful unauthorized access’ of tax records involving individuals who were candidates for office or political donors. The public needs to know whether the decision not to prosecute these violations was politically motivated and whether the individuals responsible were held accountable in any other way.”

The Senator requested that the Attorney General respond to his questions by July 26. Inspector General George said that three of the cases appeared to be inadvertent, but the fourth case consisted of “willful unauthorized access,” and was referred to the Justice Department, which declined to prosecute.

The IRS has not responded to Senator Grassley’s request for a comment on the IG’s findings.

The revelations follow on the heels of another report by CNS News outlining a 17 year pattern of obstructing by the IRS in relation to the tax records of illegal aliens.  In short, the IG found that the IRS had made a “policy decision” to “‘legalize’ illegal aliens.”  In doing so, the IRS knowingly issued Individual Taxpayer Identification Numbers (ITIN) that its own employees recognized as fraudulent at the application stage.  Additionally, the IRS refused to release information to Immigration and Naturalization Services related to the use of ITINs and the theft of Social Security Numbers by illegal aliens, despite a federal law’s requirement to share the information.

The law, the Immigration Reform and Immigrant Responsibility Act, was passed in 1996 and explicitly stipulated that no other law or official could bar any agency or official from providing information about illegal aliens to the INS.  Despite this, the IRS continued to hide behind a regulation it issued after the Act’s passage, in which it applied Section 6013 of the IRS Code to aliens with ITINs. Section 6103 said the IRS must keep tax information confidential.

Given the IRS’s blatant violation of confidentiality in accessing the tax records of political candidates and donors outlined in the IG’s letter to Senator Grassley, the IRS’s 17 year de facto amnesty effort for illegal aliens takes on a much more sinister tone. While political candidates and donors have no protection from the prying eyes of government officials, illegal aliens engaged in federal crimes, including felonies involving the fraudulent use of Social Security numbers, receive the full measure of confidentiality afforded to taxpayers by the IRS under Section 6103.

Additionally, the fact that the IRS routinely shares information on taxpayers with unpaid tax liabilities with the Department of Homeland Security, which then uses the information to intercept the taxpayers when they attempt to travel abroad or re-enter the United States, further undermines the IRS’s credibility.  If you’re a U.S. citizen with unpaid taxes, Section 6103 doesn’t protect you or your information from sharing. If you’re an illegal alien, engaged in the fraudulent procurement of an ITIN or the fraudulent use of a stolen SSN, Section 6103 does protect the confidentiality of your tax records.

All of these developments in the IRS scandal coincided with new revelations about the IRS’s targeting of conservative 501(c)(4) applicants.  An IRS whistleblower, IRS lawyer Carter Hull, who is testifying before the House Government Oversight Committee this morning, will directly link the IRS chief counsel, William Wilkins, an appointee of President Obama, to the scrutiny of applications.  Hull’s testimony provides the first link of an Obama political appointee to the scandal.

The Obama White House has previously denied any Washington, D.C. links to the scandal, characterizing the targeting of conservative groups as an effort by mid-level employees out of the Cincinnati, Ohio IRS office.

Mr. Hull is a tax law specialist with 48 years of experience at the IRS, and he claims that disgraced IRS official and former head of the Exempt Organizations division Lois Lerner demanded he send the reviews of Tea Party groups to the IRS chief counsel’s office.  As Mr. Hull noted, some of the applications forwarded to D.C. have still not be decided three years afterwards.  In his opinion, his initial review of the applications was sufficient, but he was overruled by Ms. Lerner, who demanded he forward the applications to D.C. for additional scrutiny.

In June, another investigation found that IRS employees used their agency credit cards to buy wine, pornography, diet pills, and romance novels.  Another report released last month detailed $50 million in spending on employee conferences between 2010 and 2012.  94 IRS employees used their credit cards to skirt a $3,000 limit on individual purchases in 361 cases, with purchases totaling $493,000.  None of the 94 employees were disciplined.

The IRS scandals continue to develop and grow with subsequent reports of wrongdoing by employees, and the scandal is now reaching into the IRS general counsel’s office as well. After two months, new revelations continue to emerge, and investigators with the House Government Oversight Committee seem set for a long summer.

jay batmanJay Batman is a graduate of the Texas Tech University School of Law, where he attained his J.D. in May 2013.  He completed a B.A. in English with a minor in Political Science at the University of Montevallo in 2002. He is employed with Dustin Stockton Political Strategies, LLC, and presently resides in West Texas with his dog and co-author, Buddy Love