New documents suggests IRS's Lois Lerner likely broke the law

Federal law prohibits the IRS from sharing tax returns filed with the agency, with very limited exceptions. “The IRS has a special obligation to keep information confidential, that’s how our tax system works,” says Eileen O’Connor, who served as assistant attorney general for the tax division of the DOJ in the George W. Bush administration.

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Documents suggest that Lerner’s massive document transfer to the DOJ didn’t meet any of those exceptions, including one that allows the agency to disclose returns for use in criminal investigations — if they’ve been requested in relation to “an actual investigation about a person to whom the investigation is related,” says O’Connor. Both Lerner and the DOJ were interested in figuring out how to prosecute non-profit groups they believed were engaging in improper political activity, and Lerner sent the documents over to the department days before an October 8 meeting with several of her IRS colleagues, an FBI agent, and attorneys from the DOJ’s public-integrity section. There they discussed their mounting “concern that certain 501(c) organizations are actually political committees ‘posing’ as if they are not subject to FEC law, and therefore may be subject to criminal liability,” according to a DOJ summary of the meeting.

A lawful transfer of the documents would have required a formal request from the DOJ to the IRS, but DOJ trial attorney Stephanie Sasarak told Cause of Action in a March 9, 2016 letter that the department did not make any requests to the IRS for the documents it received. Alternatively, the secretary of the Treasury could have turned the documents over to the DOJ. In either case, section 6103 requires the Treasury secretary to disclose the transfer to the bipartisan Joint Committee on Taxation, which releases publicly a list of disclosures each year. But the Joint Committee on Taxation’s 2010 disclosure report does not show a transfer to the Department of Justice that matches the one Lerner sent in October of that year.

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