In response to her threat to have the IRS investigate Grassley and his wife, Giuliano wrote that he was “not sure” if Grassley and his wife should be investigated, and noted that it wasn’t clear they had done anything wrong. The issue that Lerner initially raised — whether the inviting organization could pay Grassley’s wife to attend — was a non-sequitur. There was nothing illegal about it. And even if it were illegal, the only way to investigate and prosecute it would be to examine the tax returns of both the paying organization and the recipient.
“We would need to wait for: (i) Grassley to accept and attend the speaking arrangement, and (ii) then determine whether [redacted] issues him a 1099,” Giuliano wrote. “And even without the 1099, it would be Grassley who would need to report the income on his 1040.”
In other words: even if Lerner’s laughably ignorant legal assertion was accurate, the audit threatened by Lerner would have to include an audit of Grassley’s personal tax returns. More perplexing, though, is that it took another staffer to explain to Lerner — the head of IRS enforcement of non-profit organizations — how basic tax laws actually work. Lerner concluded the released e-mail conversation by pulling the adult equivalent of taking your marbles and going home.
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