Obama IRS targeted for audit 1 in 10 donors to conservative groups

April 25, 2017

Submitted by:  Veronica Coffin

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Under Obama, conservative Americans suddenly found themselves living not in the U.S.A., but in the (former) Soviet Union.

In 2013-14, news came that the all-powerful Internal Revenue Service of the Obama administration was singling out for scrutiny conservative groups that had applied for non-profit status. See:

But what actually happened is even worse. It turns out Obama’s IRS targeted for audit:

  1. Not just conservative groups that had applied for non-profit 501(c)(4) status, but also conservative groups that already were 501(c)(4)s.
  2. Not just conservative groups, but also individual conservative Americans.

(1) OBAMA IRS TARGETED ALL RIGHT-WING GROUPS

In February 2014, then-Chairman of the Ways and Means Committee Dave Camp (R-MI) stated that:

“Additionally, we now know that the IRS targeted not only right-leaning applicants, but also right-leaning groups that were already operating as 501(c)(4)s.  At Washington, DC’s direction, dozens of groups operating as 501(c)(4)s were flagged for IRS surveillance, including monitoring of the groups’ activities, websites and any other publicly available information. Of these groups, 83 percent were right-leaning. And of the groups the IRS selected for audit, 100 percent were right-leaning.

The right-leaning groups that were targeted included the U.S. Chamber of Commerce and the Leadership Institute, a 501(c)(3) that trains young conservative activists. The group’s president, Morton Blackwell, told Sen. Roy Blunt (R-Missouri) the audit had cost his organization more than $50,000 and hundreds of man-hours. As part of the investigation, the Leadership Institute was required to produce 23,430 pages of documents and answer far-ranging questions about its interns and other miscellaneous topics.

(2) OBAMA IRS TARGETED CONSERVATIVE INDIVIDUALS

On July 22, 2015, the D.C. citizens’ watchdog group Judicial Watch announced that it obtained documents from IRS which confirm the IRS had used donor lists to conservative tax-exempt organizations (such as the aforementioned Leadership Institute) to target those donors for audits. The IRS produced the records in a Freedom of Information lawsuit by Judicial Watch seeking documents about selection of individuals for audits, based upon application information and 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)).

One of the damning documents is an exchange of letters between then-Democrat Senate Finance Committee Chairman Max Baucus (D-MT) and then-IRS Commissioner Douglas Shulman:

  • In his letter to Shulman of September 28, 2010, Baucus wrote: “I request that you and your agency survey major 501(c)(4), (c)(5) and (c)(6) organizations.…”
  • Shulman replied in a letter dated February 17, 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.”

Note: Sen. Roy Blunt wrote that Douglas Shulman was cleared to visit the White House more than 100 times during his four years as Obama’s IRS commissioner. In contrast, Shulman’s predecessor, Mark Everson, says he was cleared to visit the Bush White House just once during his four years as IRS commissioner.

After receiving Sen. Baucus’s letter, the IRS considered the issue of auditing donors to 501(c)(4) organizations, alleging that a 35% gift tax would be due on donations in excess of $13,000, which required the IRS audit the donors.

But the 35% gift tax was really just a ruse because 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. In fact, the IRS had not enforced the gift tax since 1982.

The documents show that individual donors to Crossroads GPS, associated with Republican Karl Rove, were specifically referenced by IRS officials in the context of the gift tax audit. IRS attorney Lorraine Gardner emailed a 501(c)(4) donor list to former Branch Chief in the IRS’ Office of the Chief Counsel James Hogan. Later, this information was shared with IRS Estate Gift and Policy Manager Lisa Piehl.

In September 2014, another Judicial Watch FOIA lawsuit forced the release of documents detailing that the IRS sought, obtained and maintained the names of donors to Tea Party and other conservative groups. IRS officials acknowledged in these documents that “such information was not needed.” The documents also show that the donor names were being used for a “secret research project.

At a May 7, 2014 hearing, the House Ways and Means Committee announced    that, after scores of conservative groups provided donor information “to the IRS, nearly one in ten donors were subject to audit.” In 2011, as many as five donors to the conservative 501(c)(4) organization Freedom’s Watch were audited, according to the Wall Street Journal. Bradley Blakeman, Freedom’s Watch’s former president, said he was “personally targeted” by the IRS.

Judicial Watch President Tom Fitton said:

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. 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.

 

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