"President [Michael] Crowe and the Board of Regents will soon learn all about being audited by the IRS,"
—President Obama jokes during his commencement speech at Arizona State University in 2009.
Under President Obama the Internal Revenue Service has repeatedly been accused of using its enforcement powers to punish the White House’s political opponents. Here are six of the most egregious examples.
1. The IRS Targeted Conservative Political Organizations for Investigation
On Friday, the IRS admitted that career employees had specifically targeted organizations that had "Tea Party" or "Patriot" in their name.
The harassment of these conservative groups included intrusive and inappropriate questionnaires and a threat to make all the confidential information public. The targeting included explicitly asking for donor lists from conservative organizations as part of their application process.
"We made some mistakes, some people didn’t use good judgment. For that, we’re apologetic," acknowledged the director of the IRS division overseeing tax-exempt groups, Lois Lerner.
Last year, before a hearing at the House of Representatives, then IRS commissioner Douglas Shulman said, "there’s absolutely no targeting. This is the kind of back and forth that happens to people." And still the IRS claims that the targeting of conservative groups was "in no way due to any political or partisan rationale."
2. ProPublica Published Confidential IRS Filings on Six Conservative Organizations
From December 2012 to January 2013, ProPublica published the confidential pending IRS applications for tax-exempt status of six conservative organizations.
ProPublica acknowledged that the IRS was not supposed to release information on pending claims for tax-exempt status after publishing Crossroad GPS’s application.
"[IRS spokeswoman Michelle Eldridge] cited a law saying that publishing unauthorized returns or return information was a felony punishable by a fine of up to $5,000 and imprisonment of up to five years, or both," according to ProPublica.
Despite being informed of the illegality, confidential applications from the five other organizations were discussed in January.
3. Austan Goolsbee, Then Chair of the Council of Economic Advisors, Divulged on a Conference Call Confidential IRS Information on How Koch Industries Was Organized
In a background call with reporters, a "senior administration official" used Koch Industries as an example of how large corporations used corporate structures to avoid taxes.
In the course of attacking Koch Industries, which employs over 50,000 people and is owned by prominent conservative philanthropists Charles and David Koch, the official divulged confidential tax information about the company. The official was later outed as Austan Goolsbee, the former director of the president’s Economic Recovery Board and then chair of the Council Of Economic Advisers.
"Neither the Koch website nor Forbes’ list of private companies has information regarding Koch’s tax filling status. This is confidential information," according to Koch Industries lawyer Mark Holden.
In 2010 an investigation led by the Treasury inspector general for tax administration, Russell George, was opened after Republicans on the Senate Finance Committee requested it. The results of the investigation have not been publicly communicated, and will not be released unless Senate Democrats permit it.
4. Donors to Nonprofit Advocacy Groups Were Told that Past Donations Could Be Taxed as Gifts
After not levying a gift tax for decades, the IRS investigated five donors to political advocacy nonprofits. Among those to receive letters threatening additional levies and taxes was conservative philanthropist Foster Friess, and the move was widely seen as an attempt to intimidate conservative organizations and donors on the eve of the 2010 midterm elections.
"Retroactive enforcement of the gift tax in this highly politicized environment raises legitimate concerns and demands further explanation," six Republican senators, lead by Sen. Orrin Hatch, said in a letter to the IRS.
The agency was forced to abandon its efforts to enforce the rarely used gift tax on donations, acknowledging that, "This is a difficult area… with respect to which we have little enforcement history." Again, the agency blamed "career civil servants."
5. After Being Singled Out by an Obama Campaign Website, a Romney Supporter Was Investigated by The IRS and the Department of Labor
During President Obama’s reelection campaign, Frank VanderSloot, a contributor to pro-Romney campaign organizations, was said by the Obama campaign to have a "less-than-reputable record" and to be a "bitter foe of the gay rights movement."
A few months later, VanderSloot and his wife were told by the IRS they were being audited for the first time, looking over two years of past fillings.
Two weeks later, the Department of Labor informed VanderSloot that he was being investigated to ensure the three foreign workers he employs on his ranch received "the full scope of protections."
6. The IRS Claims It Can Read Your Emails without a Warrant
According to documents released last month under the Freedom of Information Act, the IRS "has long taken the position that the IRS can read your emails without a warrant—a practice that one appeals court has said violates the Fourth Amendment." That news came last month from the ACLU, which which had filed the FOIA request.
IRS lawyers asserted that Americans are entitled to "generally no privacy" in their online communications—including email.
CNET reported that "the IRS continued to take the same position, the documents indicate, even after a federal appeals court ruled in the 2010 case U.S. v. Warshak that Americans have a reasonable expectation of privacy in their e-mail."
Bonus: Under Obamacare, the IRS Will Become the Key Enforcer on Health Care
Once Obamacare is fully implemented in 2014, the IRS will enforce 47 new tax provisions along with distributing subsidies to 18 million people and tax credits to small businesses.
The Treasury Department expects the cost of enforcement from 2010 to 2013 to total $881 million. Former IRS commissioner Douglas Shulman informed Congress last year the agency would need an additional $13.1 billion in 2014.
Published under: Austan Goolsbee , Federal Bureaucracy , IRS , Koch Brothers , Obama Administration