And once again, a potential link between the IRS targeting scandal and Barack Obama himself comes to the fore. Judicial Watch recently forced the IRS to part with more of its internal communications related to the targeting of conservative groups seeking tax exempt status, and this group of e-mails puts more meat on the bones of the scandal. After Lois Lerner’s tax-exempt group began demanding donor lists from these groups as a prerequisite to consideration, the IRS used those lists to determine audit targets:
Judicial Watch announced today 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 …” 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.
But then, in February 2011, at least five donors of an unnamed organization were audited.
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. Seemingly 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.”
Be sure to read the whole article, of course. Phil Kerpen found one very interesting nugget in the data dump that’s worth noting:
William Wilkins, Obama-appointed IRS Chief Counsel, personally signed off on C4 donor targeting memo. pic.twitter.com/jWTbGNmvDd
— Phil Kerpen (@kerpen) July 23, 2015
Some may wonder why this is so significant. About nine months after signing off on this targeting, Wilkins spent more than seven hours in the White House meeting with President Obama. That seems a bit unusual, since Wilkins was counsel to the IRS; the White House has its own counsel with which to confer on legal issues. It’s not illegal for an agency counsel to meet with the President directly, or even necessarily improper, but it’s a bit … odd. And two days after this April 2012 meeting, the IRS suddenly modified its tax-exempt targeting criteria based on communication from Wilkins.
At the time that came out two years ago (!), one could have imagined that Wilkins got brought into the White House to consult on the targeting based on worries that it might have broken the law. Now, with this memo, it looks like Wilkins was actually involved in it from the beginning, which puts his seven-hour stay at the White House nine months later in a much different light. One might also wonder what his December 15, 2011 meeting with Obama — again for several hours — meant in light of this memo. It appears that Wilkins could have been a conduit for the targeting policy between the White House and the IRS — or at least had the resources to know about it for far longer than they admitted.