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Published On: Fri, Jul 24th, 2015

IRS Scandal: Judicial Watch reports link between political donor lists, IRS audits after Max Baucus emai

New IRS targeting scandal information reported by Judicial Watch reveals internal communications related to the targeting of conservative groups seeking tax exempt status. This group of e-mails reveals how Lois Lerner’s tax-exempt group began demanding donor lists from these group seeking tax exempt status as a prerequisite for consideration.

The IRS then used those lists to determine audit targets.

Judicial Watch announced that it has obtained documents from the Internal Revenue Service (IRS) that confirm that the IRS used donor lists to tax-exempt organizations to target those donors for audits.

The documents also show IRS officials specifically highlighted how the U.S. Chamber of Commerce may come under “high scrutiny” from the IRS.  The IRS produced the records in a Freedom of Information lawsuit seeking documents about selection of individuals for audit-based application information on donor lists submitted by Tea Party and other 501(c)(4) tax-exempt organizations (Judicial Watch v. Internal Revenue Service (No. 1:15-cv-00220)).

A letter dated September 28, 2010, then-Democrat Senate Finance Committee Chairman Max Baucus (D-MT) informs then-IRS Commissioner Douglas Shulman: “I request that you and your agency survey major 501(c)(4), (c)(5) and (c)(6) organizations …”

President Barack Obama studies a document held by Director of National Intelligence James Clapper during the Presidential Daily Briefing in the Oval Office, Feb. 3, 2011. (Official White House Photo by Pete Souza)

President Barack Obama studies a document held by Director of National Intelligence James Clapper during the Presidential Daily Briefing in the Oval Office, Feb. 3, 2011. (Official White House Photo by Pete Souza)

In reply, in a letter dated February 17, 2011, Shulman writes: “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.”

In 2010, after receiving Baucus’s letter, the IRS considered the issue of auditing donors to 501(c)(4) organizations, alleging that a 35 percent gift tax would be due on donations in excess of $13,000.  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.

A gift tax on contributions to 501(c)(4)’s was considered by most to be a dead letter since the IRS had never enforced the rule after the Supreme Court ruled that such taxes violated the First Amendment.  The documents show that the IRS had not enforced the gift tax since 1982.

In February 2011, at least five donors of an unnamed organization were audited.

Lois Lerner is still at the epicenter of the IRS scandal

Lois Lerner is still at the epicenter of the IRS scandal

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.

During this process, 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.”

 

The link to President Obama comes about nine months after signing off on this targeting, when Wilkins spent more than seven hours in the White House meeting with President Obama. Two days after this April 2012 meeting, the IRS suddenly modified its tax-exempt targeting criteria based on communication from Wilkins.

The full set of documents is HERE, nearly 6,000 pages.

irs-tax-exempt stats from IG report FOx News coverage

 

 

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  1. Gene Ralno says:

    Sigh, once again. Time to replace the IRS with a sales tax, The FAIR Tax or any of several others whose constructs don’t lend themselves to manipulation and abuse. This is another massive, government program run amok. No way to fix it. Just replace it.

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