A federal judge on Friday ordered the Internal Revenue Service to reveal White House requests for taxpayers’ private information, advancing a probe into whether administration officials targeted political opponents by revealing such information.
Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia rejected the IRS’s argument that a law designed to protect the confidentiality of such information protected the public disclosure of such communications with the White House.
The law, 26 U.S. Code § 6103, was passed after the Watergate scandal to protect citizens from retribution by federal officials. Jackson scoffed at the administration’s claims that the statute could be used to shield investigations into whether private tax information had been used in such a manner.
"The Court is unwilling to stretch the statute so far, and it cannot conclude that section 6103 may be used to shield the very misconduct it was enacted to prohibit," Jackson wrote in her order.
The decision was a victory for Cause of Action, the legal watchdog group that sued the IRS in 2013 seeking records of its communications with the White House and potential disclosure of confidential taxpayer information.
The group called the decision "a significant victory for transparency advocates" in a Friday statement
"As we have said all along, this administration cannot misinterpret the law in order to potentially hide evidence of wrongdoing," said Dan Epstein, the group’s executive director. "No administration is above the law, and we are pleased that the court has sided with us on this important point."
The lawsuit came after Treasury’s inspector general for tax administration, the IRS’s official watchdog agency, revealed that it was investigating whether Austan Goolsbee, the White House’s former chief economist, illegally accessed or revealed confidential tax information related to Koch Industries.
The corporation’s owners, Charles and David Koch, are prominent funders of conservative and libertarian groups that often oppose the White House’s policy priorities.
Goolsbee "used Koch Industries as an example when discussing an issue noted in the [President's Economic Recovery Board] report that half of business income goes to companies that do not pay corporate income tax because they are pass-through entities and that many of them are quite large," the White House said in 2010.
His apparent knowledge of Koch’s tax history, detailed during a conference call with reporters, "implies direct knowledge of Koch's legal and tax status, which would appear to be a violation" of federal law, said Sen. Chuck Grassley (R., Iowa), the chairman of the Senate Judiciary Committee, at the time.