Why Congressional Investigations Seem To Drag On Forever

The Washington Examiner posted a story today about the investigation into the Internal Revenue Service‘s (IRS) discrimination against conservative political groups.

The article reports:

In a letter to IRS Commissioner John Koskinen Wednesday, the pair of Republicans questioned the tax agency’s record-keeping policies, which have come under fire for years thanks to a series of lengthy congressional investigations that were stymied by the IRS’ failure to turn over key documents.

“For unknown reasons, the hard drive in question was not recycled, and in December of [2014] a FOIA request was issued that may have pertained to documents on the hard drive,” Hatch and Wyden wrote of the wiped hardware. “In April 2015, the IRS subsequently ‘sanitized’ the hard drive, in potential violation of IRS procedure and the relevant litigation hold.”

It is very easy to avoid the consequences of your actions when you erase all of the evidence. Unfortunately, despite the fact that it was illegal, that is what the IRS did.

The article concludes:

Chaffetz (Representative Jason Chaffetz) and Jordan (Representative Jim Jordan) likened the development in the Microsoft case to the now-infamous destruction of 422 back-up tapes containing the emails of Lois Lerner, former head of the IRS’ tax-exempt unit.

Tax officials wiped those tapes “in spite of the existence of a preservation order, a non-destruction order from the Department of Justice and a congressional subpoena,” the congressmen wrote.

Led by Chaffetz, who chairs the House Oversight and Government Reform Committee, House Republicans moved to impeach Koskinen in October after he misrepresented the IRS’ search for documents that had already been deleted.

We need to elect people who will hold our government accountable when it acts contrary to the Constitution it has pledged to protect. Anyone involved in this deletion of documents needs to be fired immediately and prevented from ever working for the government again. It is obvious that the people who destroyed these documents and records figured that the price of destroying them would be less than the penalty if they were released.

The Internal Revenue Service Backs Down

The Wall Street Journal posted an article yesterday about a proposed change to charitable donation reporting to the Internal Revenue Service (IRS). The IRS had proposed a change to the law that would have given charities the ‘option’ of filing detailed reports on everyone who donates more than $250 to the charity. The detailed reports were going to be ‘voluntary’ (at least until the IRS was able to put them into law). The information reported would have included Social Security numbers. The Wall Street Journal is now reporting that the IRS has withdrawn the proposal.

The article reports:

Amazingly enough, in this case the IRS appears to have listened to concerns from the taxpayers who pay their salaries. On Thursday the IRS said it is withdrawing its proposal after receiving “a substantial number of public comments.” Many of the comments “questioned the need for donee reporting, and many comments expressed significant concerns about donee organizations collecting and maintaining taxpayer identification numbers for purposes of the specific-use information return,” said the IRS. The legitimate anger of average citizens was amplified by stalwart IRS watchdogs like Rep.Jim Jordan (R., Ohio) on Capitol Hill.

One year after Republicans took control of the Congress, and one year before President Obama leaves the White House, the pendulum is beginning to swing against IRS abuse of taxpayers. Coming on the heels of other reforms in the year-end tax and spending bills—including a ban on new IRS rules limiting political activity—Thursday’s news is reason to cheer.

Now if we could just get rid of the IRS, we would have something.

The infoplease website reminds us:

In 1913, the 16th Amendment to the Constitution made the income tax a permanent fixture in the U.S. tax system. The amendment gave Congress legal authority to tax income and resulted in a revenue law that taxed incomes of both individuals and corporations. In fiscal year 1918, annual internal revenue collections for the first time passed the billion-dollar mark, rising to $5.4 billion by 1920. With the advent of World War II, employment increased, as did tax collections—to $7.3 billion. The withholding tax on wages was introduced in 1943 and was instrumental in increasing the number of taxpayers to 60 million and tax collections to $43 billion by 1945.

It is interesting to me that the American government was able to fulfill its Constitutional duties prior to 1913 without the billions of dollars they now collect and spend. What are they doing now that has changed that? Do we need to go back to a government that follows the instructions and limitations of our Constitution? I think that would be a really good idea.

 

Tax Refund, Anyone?

Today’s Washington Free Beacon posted a story stating that the Internal Revenue Service issued $46 million in erroneous tax refunds in 2013 returns.

The article reports:

The Treasury Inspector General for Tax Administration (TIGTA) released an audit Monday faulting the IRS for approving thousands of potentially fraudulent tax refunds in 2013.

“TIGTA identified that because of a programming error, over $27 million of refunds were erroneously issued for 13,043 Tax Year 2013 tax returns,” the audit said. “The programming error is overriding the IRS’s two-week processing delay on some refund tax returns that are identified by the IRS as potentially fraudulent.”

The audit said the returns were flagged for claiming a “questionable tax credit” but were then automatically issued before the IRS could complete its verification process.

In addition, the audit identified 3,910 “potentially fraudulent” tax returns that were issued due to ineffective monitoring, totaling $19 million.

“The IRS did not ensure that tax examiners timely completed their verification work,” the audit said. “Name mismatches in IRS systems prevented refund holds from posting to tax accounts. Refund holds were either not set correctly or not functioning as intended.”

The article states that the audit recommended that the IRS improve its screening and verification process. No kidding.

The Internal Revenue Service Has Become A Political Organization

The Wall Street Journal posted an opinion piece this morning about changes that the Treasury Department is proposing to current Internal Revenue Service (IRS) rules. The proposed rule gives 501(c)(3) charities the ‘option’ of filling out reports on every donor who contributes more than $250 to the organization. This ‘option’ would include name, address, and Social Security number. As of now the rule will be voluntary, but based on past experience (particularly with the IRS) voluntary will soon morph into required.

The article reports:

Under current law, nonprofits must report only donors who give more than $5,000 a year, and then only names and addresses. Donors who give less than $5,000 to (c)(3) charities, and who want to claim a tax deduction, must obtain a “receipt” from the charity—to furnish to the IRS if they are audited or examined. This process has been in place for years, and even Treasury and the IRS acknowledge in their new rule that it “works effectively, with the minimal burden on donors and donees.”

So why change it? The IRS is claiming this will aid in more “timely reporting” of tax-deductible donations, and no doubt the agency’s auditors would love more information to harass taxpayers.

Unfortunately, the IRS has used donation information to harass taxpayers before. After a list of supporters was made public a business that donated money to the Proposition 8 proposal in California was target by opponents of the proposal. I reported another example of IRS abuse in February of 2014 (rightwinggranny.com).

The Wall Street Journal reports another example of IRS abuse:

Frank VanderSloot, a Mitt Romney donor, was audited by the IRS and Labor Department after the Obama campaign singled him out for criticism. Catherine Engelbrecht, the head of the 501(c)(3) True the Vote, was publicly attacked by Democrats and then hit with personal and business audits from the IRS, OSHA and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

The National Council of Nonprofits, which opposes the proposed rule, notes that the IRS routinely warns taxpayers not to give out their Social Security numbers unless “absolutely necessary.” Donors will be suspicious of charities that now ask for them.

Many taxpayers will also lack confidence that nonprofits, which are often small operations staffed by volunteers, can safeguard their information. The proposed regulation is an invitation to fraud and identity theft by creating an opportunity for scam artists to claim to be charities and solicit Social Security numbers.

It may be time to go to a tax system that does not involve the IRS. Unfortunately the IRS has shown itself to be an agency that cannot be trusted to be above politics. I realize that a lot of the politicization has been under the Obama Administration, but there are no guarantees that any future administrations will not use the agency in the same way.

 

Opening The Door Wide For Identity Theft

Identity theft is a problem in the electronic age. Credit cards with chips can be stolen without anyone actually going near the actual card. The internet is a gold mine for identity thieves. Now the Internal Revenue Service (IRS) is going to make it really easy to have your identity stolen.

Freedomworks posted an article yesterday about a new rule the IRS is proposing on charitable donations.

The article reports:

A new rule is proposing that non-profit organizations collect the “tax identification numbers” of all their donors who give over $250. For you and me, that means our Social Security numbers.

It’s hard to imagine a more chilling regulation on charitable giving. Would you be willing to enter your Social Security number into an internet donation form, knowing that the government will get to see it? Would you be willing to write that number down and mail it through the U.S. Post Office alongside a check? I wouldn’t.

The article continues:

This is part of the IRS’a continued efforts to reduce the reach and effectiveness of non-profit organizations. Many of you will remember the proposed regulations from last year that would have narrowly defined “social welfare” to shut down conservative organizations critical of the IRS. Through a massive grassroots activism campaign, FreedomWorks, along with other organizations, was able to stop the regulation by driving a record number of comments – over 150,000 – to defeat the rule. This new regulation is a resurrection of the same idea – identify and deter voters to causes the government doesn’t approve of.

In addition to the compliance cost of organizations having to keep track of all these numbers, the potential for civil liberties violations is huge. The Constitution guarantees us the freedom of association, but that freedom is compromised when the we know the government is watching us, especially when the watching is being done by an organization capable of inflicting punishment in the form of fines, audits, asset forfeiture, and general harassment.

We saw that harassment when a business was boycotted because they gave money to support Proposition 8 in California. If this information is required, we can expect to see donors to conservative causes targeted. We have already seen thegovernment harass businessmen who contributed to conservative causes using audits and safety inspections.

The comment period on this new rule is open until December 16. Please comment and let the IRS know that they have no right to demand your Social Security number for charitable contributions.

Attempting To Fight Corruption

Hot Air posted an article yesterday about the House of Representatives’ move to impeach John Koskinen for his blocking the investigation into the Internal Revenue Service (IRS) practices regarding conservative groups.

An article at Townhall reports the charges:

Specifically, Commissioner Koskinen violated the public trust in the following ways:

-Failed to comply with a subpoena resulting in destruction of key evidence. Commissioner Koskinen failed to locate and preserve IRS records in accordance with a congressional subpoena and an internal preservation order. The IRS erased 422 backup tapes containing as many as 24,000 of Lois Lerner’s emails – key pieces of evidence that were destroyed on Koskinen’s watch.
-Failed to testify truthfully and provided false and misleading information. Commissioner Koskinen testified the IRS turned over all emails relevant to the congressional investigation, including all of Ms. Lerner’s emails. When the agency determined Ms. Lerner’s emails were missing, Commissioner Koskinen testified the emails were unrecoverable. These statements were false.
-Failed to notify Congress that key evidence was missing. The IRS knew Lois Lerner’s emails were missing in February 2014. In fact, they were not missing; the IRS destroyed the emails on March 4, 2014. The IRS did not notify Congress the emails were missing until June 2014 – four months later, and well after the White House and the Treasury Department were notified.

The article at Hot Air also reminds us that a federal judge has already threatened to hold Koskinen accountable for his obstruction of the investigation into the IRS.

The article at Hot Air reports:

According to the rules of play, the House can bring the charges with a simple majority vote. Easy enough this year. But the trial is held in the Senate and requires a two thirds vote to convict. (If this is treated as a partisan issue and all the Democrats abscond in their duty it would be impossible.) Also, Joe Biden gets to preside over the trial. Many seem to think that it would be John Roberts, but he would only preside in the case of impeaching the President. That’s a tough hill to climb. In all of US history there have been seven successful impeachments and all of them were judges. The only cabinet official to ever be impeached was William Belknap, Secretary of War under President Grant, but he wasn’t convicted. The only two Presidents to be impeached were not found guilty, as were the various Senators brought to stand before the wheel.

Politically this is a losing battle. Legally it is a necessary battle. What this process will do is eliminate any doubt as to which Senators put party loyalty over honesty. There is no way Koskinen would be acquitted in a fair trial, but Congress (and the Justice Department) are not really focused on doing what is right at this point.

Equal Justice Under The Law?

This isn’t a surprise, but it is extremely disappointing. The Daily Caller is reporting today that the Justice Department will not file criminal charges against Lois Lerner. Ms. Lerner, as the head of the Internal Revenue Service, routinely discriminated against conservative groups seeking tax exempt status.

The article states:

“Substantial evidence of mismanagement, poor judgment and institutional inertia leading to the belief by many tax-exempt applicants that the IRS targeted them based on their political viewpoints. But poor management is not a crime,” the letter reads, according to CNN.

The Justice Department opened its investigation of Lerner, then the director of IRS’ exemptions unit, after it was discovered that she had flagged a disproportionate number of conservative groups’ tax-exempt status applications. Lerner was placed on a leave of absence from the IRS in May 2013 and resigned in September of that year.

Just for the record, it wasn’t a belief that conservatives were targeted.

According to the Treasury Inspector General for Tax Administration Report:

The IRS used inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based upon their names or policy positions instead of indications of potential political campaign intervention. Ineffective management: 1) allowed inappropriate criteria to be developed and stay in place for more than 18 months, 2) resulted in substantial delays in processing certain applications, and 3) allowed unnecessary information requests to be issued. Although the processing of some applications with potential significant political campaign intervention was started soon after receipt, no work was completed on the majority of these applications for 13 months…. For the 296 total political campaign intervention applications [reviewed in the audit] as of December 17, 2012, 108 had been approved, 28 were withdrawn by the applicant, none had been denied, and 160 were open from 206 to 1,138 calendar days (some for more than three years and crossing two election cycles)…. Many organizations received requests for additional information from the IRS that included unnecessary, burdensome questions (e.g., lists of past and future donors).

We have reached a very dangerous place in America–where people who disagree with the Democrats in power can be targeted by the Internal Revenue Service. When Richard Nixon, a Republican, attempted that, he was impeached, as he should have been. We have come a long way. Understand that if Hillary Clinton is elected, there will be a new enemies list (the Clintons had one the last time they were in office), and the people on that list can expect to be harassed by the government. Please consider that before you vote.

This Might Be The Reason The Investigation Is Taking So Long

Yesterday The Daily Caller reported that the State Department gave the House Select Committee on Benghazi 1,300 pages of new emails from Ambassador Chris Stevens. There have been seven Congressional committees that have investigated the attack in Benghazi, and this is the first time the State Department has turned over these emails. I don’t know if this sort of behavior is typical of the State Department, but it is definitely typical of the Obama Administration. We saw the same thing with the investigation into the politicalization of the Internal Revenue Service–stall, stall, and stall some more, and then claim that the investigation is dragging on because it is political or that the investigation is old news.

Unfortunately I believe that Hillary Clinton will walk away from her day in Congress unscathed. I believe that there is a reason she insisted on a public hearing. She is going to say that the investigation is political and cite as her proof the fact that thus far there is no smoking gun. Somehow the fact that the information needed to do the investigation has been withheld from the Committee will be overlooked.

The article concludes:

Gowdy (South Carolina U.S. Rep. Trey Gowdy, who chairs the Select Committee) gave a different characterization of the emails during his interview on Sunday, however.

He said that Stevens’ communiques show that he began requesting additional security in June 2012, when he was appointed ambassador. Instead of receiving help, though, Gowdy said that State Department officials asked Stevens to help craft “public messaging advice” on the precarious situation in the north African country.

Gowdy said that other emails show that one of Clinton’s top aides, Jake Sullivan, asked Stevens to vet an intelligence report written by Clinton’s longtime friend, Sidney Blumenthal.

In a statement to TheDC, Benghazi Committee press secretary Matt Wolking says that the release of additional Stevens emails proves that the committee “is breaking new ground despite the Obama administration’s many delays.”

It is up to the voters to hold their elected officials accountable. The behavior of Hillary Clinton in regard to Benghazi is unacceptable. Remember–the only person to serve jail time for the attack on Benghazi was the person who made a video that had nothing to do with the attack and the Obama Administration lied about the role of the video in the attack.

Somehow The Media Missed These

Yesterday Investor’s Business Daily posted an article about the major scandals in the Obama Administration that for some reason the press does not seem to be reporting. The mainstream media has gone out of its way to make the Obama Administration appear scandal-free, but the facts are somewhat different.

The first scandal the article mentions is the pressure put on some intelligence analysts to water down their reports. This was reported in The Daily Beast about a month ago.

The Daily Beast reported:

More than 50 intelligence analysts working out of the U.S. military’s Central Command have formally complained that their reports on ISIS and al Qaeda’s branch in Syria were being inappropriately altered by senior officials, The Daily Beast has learned.

The complaints spurred the Pentagon’s inspector general to open an investigation into the alleged manipulation of intelligence. The fact that so many people complained suggests there are deep-rooted, systemic problems in how the U.S. military command charged with the war against the self-proclaimed Islamic State assesses intelligence.

“The cancer was within the senior level of the intelligence command,” one defense official said.

National Security should not be a political issue.

The second scandal mentioned by Investor’s Business Daily was the recent bombing of a hospital in Afghanistan. Admittedly, bad things happen in wars, but the article points out that the bombing of this hospital was partially the result of President Obama’s over reliance on drones and airstrikes and his lack of on-the-ground intelligence.

The third scandal mentioned is Hillary Clinton’s email. Officials in the Obama Administration have claimed that they were unaware of Mrs. Clinton’s private email server arrangement. Are we to believe that they never noticed the return address on the emails they received from the Secretary of State? That seems to be a bit of a stretch.

The article at Investor’s Business Daily also mentions the targeting of conservatives by the Internal Revenue Service. This one hits home personally–my husband and I were audited for the first time in 45 years after making a small donation to a Tea Party group. Nothing in our tax return had changed, and we had never been audited before.

The article reminds us:

IRS targeting conservatives: At its core, Watergate was about the Nixon administration abusing its power to help him win re-election. The press rightly expressed outrage — and still does — as the details emerged.

Yet when it came to light that the IRS had mounted a sustained campaign to thwart grass-roots conservative organizations in the run-up to Obama’s 2012 re-election bid, the mainstream press yawned.

Who gave the orders? Was there a White House connection? A cover-up? These questions still haven’t been answered. The press is too busy chasing an alleged seven-year-old surgical mishap by Dr. Ben Carson.

The article also mentions the number of illegal immigrants involved in murders. It seems that the press only continues to report on some murders. We heard about the shooting in Charleston for months, the uproar over the recent shooting in Oregon is already beginning to die down. One involved a racial motive, the other, when you look closely, had a religious aspect to it that did not coincide with the agenda of the mainstream media.

The survival of a Representative Republic (America is not a Democracy–read the writings of the Founding Fathers) depends on well-informed voters. Right now, the mainstream media is not doing anyone any favors–if America loses its way, they will also suffer the consequences. Evidently they have not yet figured that out. At this time, the internet is the only reasonable alternative to the mainstream press–you just have to be careful about who you trust. It is a shame that a free press has opted not to do its job–we need them to hold our politicians accountable–someone has to.

This Is Not The Way The Internal Revenue Service Is Supposed To Operate

I will admit that I do not love the Internal Revenue Service (IRS). I don’t think that is a particularly unique point of view. My husband and I were audited a few years ago after making a small donation to the Tea Party. Nothing in our returns had changed, and it was the first time we had been audited in forty-seven years. They examined our small amount of paperwork for about a year before they finally told us that nothing was wrong. They are a government agency that has acquired a lot of power over the years, and I believe that in recent years that power has been successfully used against political enemies. Now we are discovering that the IRS was ignoring the rules that were supposed to govern it.

Yesterday The Washington Times reported that as a result of a Freedom of Information Act (FOIA) request by Judicial Watch, IRS lawyer Geoffrey J. Klimas has discovered another personal email account used by Lois Lerner for IRS business. Judicial Watch is a non-profit organization that strives to hold our government accountable. Over the years they have been responsible for exposing transparency problems in administrations of both parties.

The article in The Washington Times reports:

IRS lawyer Geoffrey J. Klimas told the court that as the agency was putting together a set of documents to turn over to Judicial Watch, it realized Ms. Lerner had used yet another email account, in addition to her official one and another personal one already known to the agency.

“In addition to emails to or from an email account denominated ‘Lois G. Lerner’ or ‘Lois Home,’ some emails responsive to Judicial Watch’s request may have been sent to or received from a personal email account denominated ‘Toby Miles,'” Mr. Klimas told Judge Emmet G. Sullivan, who is hearing the case.

It is unclear who Toby Miles is, but Mr. Klimas said the IRS has concluded that was “a personal email account used by Lerner.”

…In the wake of the scandal Ms. Lerner retired from the agency. She declined to testify to Congress, citing her right against self-incrimination, but also said she did not break the law.

The Obama administration has declined to pursue the contempt of Congress case that the House brought against her.

The House Ways and Means Committee also approved a criminal referral asking the Justice Department to look into Ms. Lerner’s conduct, but its status is not clear.

 Americans will only find out what happened at the IRS if a Republican becomes President. I am not convinced any Democratic candidate would be willing to pursue this case. The use of the IRS as a political entity to target conservatives goes against the basic principle of free speech. The lack of prosecution of those guilty of abusing their power in the IRS goes against the American concept of all men being equal under the law. It is time to clean house in this organization.

Charity Begins At Home

Charity begins at home. I wonder sometimes how the Internal Revenue Service feels about that, but that is the conventional wisdom. Exhibiting their usual talent for taking things to the legal limit, the Clinton family obvious believes that charity should begin at home.

The Washington Free Beacon posted a story today about Hillary Clinton’s tax returns for 2014.

The article reports:

The Clintons earned more than $28 million in 2014 and claimed around $3 million in income as charitable tax deductions, according to tax returns released by Hillary Clinton’s campaign last Friday. The campaign emphasized Clinton’s charitable giving in a press statement, saying that it “represented 10.8 percent” of her income in 2014. But roughly half of that money—$1.8 million—appears to have been channeled to the Bill, Hillary, and Chelsea Clinton Foundation.

According to the tax returns, the Clintons gave $3 million in 2014 to the Clinton Family Foundation, a small private foundation that the family uses as a pass-through to other charities. Records show the CFF disbursed $3.7 million in 2014, including $1.8 million to the Bill, Hillary, and Chelsea Clinton Foundation.

Just for kicks, let’s look at how the Foundation spends its money. The Bill, Hillary, and Chelsea Clinton Foundation evidently funds a good deal of the travel expenses the Clintons generate. It must be nice to have a Foundation that helps with the expenses of your Presidential campaign.

The article further reports:

Americans for Tax Reform slammed Clinton on Tuesday for forming an “Article 4 trust,” which the group said appears to be a method to avoid paying estate taxes—a tax Clinton has supported.

“Clinton has consistently voted for the Death Tax throughout her time in public office and forcefully condemned attempts to lower it,” ATF said in a statement. “But when it comes to her own finances, it is a different story. The newly released tax returns buttress earlier reports outlining the ways Clinton uses financial planning strategies that shield her Death Tax liability.”

Another example of taxes for thee, but not for me.

The Internal Revenue Service Under President Obama Is Still Political

Fox Business posted an article today about a Government Accountability Office investigation of the Internal Revenue Service. A House Oversight subcommittee will take testimony from IRS commissioner John Koskinen today.

The article reports:

The GAO now says that IRS political “targeting is indeed possible in the audit process” for nonprofits, largely due to poor agency oversight and controls.

“Unfortunately, the IRS has not taken sufficient steps to prevent targeting Americans based on their personal beliefs,” the GAO says.

Specifically, The GAO found that “control deficiencies” do “increase the risk” that the IRS nonprofit unit “could select organizations for examinations in an unfair manner—for example, based on an organization’s religious, educational, political or other views.”

Judicial Watch, a watchdog group, says it has obtained Freedom of Information Act filings that show IRS workers were using donor lists from conservative nonprofit groups to target people for audit. It also says documents detail a October 2010 meeting between former IRS official Lois Lerner, Justice Department officials and the FBI to plan “for the possible criminal prosecution of targeted nonprofit organizations for alleged illegal political activity,” and that the IRS transferred confidential tax returns from 113,000 nonprofit social welfare groups to the FBI “as part of its prosecution effort.” The documents also show “the Obama DOJ wanted IRS employees who were going to testify to Congress to turn over documents to the DOJ before giving them to Congress.”

The IRS is a very obvious example of a government agency out of control. We need to revise our tax system so that the IRS is no longer necessary. The IRS is a descendant of  the office of Commissioner of Internal Revenue, established in The Revenue Act of 1862 as part of a temporary war-time tax plan. The Sixteenth Amendment to the Constitution (1913) allowed Congress to levy an income tax.

It is time to seriously consider a flat tax or a value-added tax.

 

It Just Gets Uglier

It would be nice to be done with the Internal Revenue Service (IRS) scandal by now, but new things keep showing up. The latest should be a cause for concern to all Americans, regardless of which political party they belong to.

Judicial Watch released a report today about its latest findings as a result of its Freedom of Information Act (FOIA) requests filed regarding the IRS. The findings are very unsettling to those of us who believe in free speech.

Here are a few highlights:

The newly obtained records also reveal that the Obama DOJ wanted IRS employees who were going to testify to Congress to turn over documents to the DOJ before giving them to Congress. Records also detail how the Obama IRS gave the FBI 21 computer disks, containing 1.25 million pages of confidential IRS returns from 113,000 nonprofit social 501(c)(4) welfare groups  – or nearly every 501(c)(4) in the United States – as part of its prosecution effort. According to a letter from then-House Oversight Committee Chairman Darrell Issa (R-CA) to IRS Commissioner John Koskinen, “This revelation likely means that the IRS – including possibly Lois Lerner – violated federal tax law by transmitting this information to the Justice Department.”

The documents were produced subsequent to court orders in two Judicial Watch Freedom of Information Act (FOIA) lawsuits: Judicial Watch v. Internal Revenue Service (No. 1:14-cv-1956) and Judicial Watch v. Department of Justice (No. 1:14-cv-1239).

The new IRS documents include a October 11, 2010 “DOJ Recap” memo sent by IRS Exempt Organizations Tax Law Specialist Siri Buller to Lerner and other top IRS officials explaining an October 8 meeting with representatives from the Department of Justice Criminal Division’s Public Integrity Section and “one representative from the FBI” to discuss the possible criminal prosecution of nonprofit organizations for alleged political activity:

Why was the IRS coordinating with the Justice Department on Congressional testimony?

The article continues:

“These new documents show that the Obama IRS scandal is also an Obama DOJ and FBI scandal,” said Judicial Watch President Tom Fitton. “The FBI and Justice Department worked with Lois Lerner and the IRS to concoct some reason to put President Obama’s opponents in jail before his reelection. And this abuse resulted in the FBI’s illegally obtaining confidential taxpayer information. How can the Justice Department and FBI investigate the very scandal in which they are implicated?”

On April 16, 2014, Judicial Watch forced the IRS to release documents revealing for the first time that Lerner communicated with the DOJ in May 2013 about whether it was possible to launch criminal prosecutions against targeted tax-exempt entities. The documents were obtained due to court order in an October 2013 Judicial Watch FOIA lawsuit filed against the IRS.

This sounds like Soviet Russia–not like America. Please follow the link above to Judicial Watch to read the entire article. There is quite a bit there that confirms the much of the Obama Administration was conducting a war on any group that did not agree with them.

Sometimes The Wheels Of Justice Turn Very Slowly

Scott Johnson at Power Line blog posted a story today about an investigation into the use of the Internal Revenue Service (IRS) as a political tool that had been held up, but will now be moving forward.

The article reports:

The pro-Israel group Z Street had its application for tax-exempt status held up at the IRS. When founder Lori Lowenthal Marcus asked why, she was told that IRS auditors had been instructed to give pro-Israel groups special attention and that Z Street’s application had been forwarded to a special IRS unit for additional review. Not to put too fine a point on the legal issues, this isn’t kosher. It’s illegal.

Z Street filed a lawsuit against the IRS in the rosy dawn of the Age of Obama; the lawsuit has failed to get beyond the IRS’s motion for dismissal. The Free Beacon’s Alana Goodman wrote about the lawsuit here last year when the DC District Court denied the IRS motion to dismiss the case. Z Street’s Lori Marcus wrote about it here. John wrote about it in 2013 in the post “The other IRS scandal.”

The DC Circuit Court handed down its decision today. The case will move forward–the IRS motion was denied. The decision is posted here.

The article at Power Line includes the following statement by Z Street:

Z STREET looks forward to the discovery phase of litigation in which it will seek to learn the nature and origin of the “Israel Special Policy” which the IRS applied to Z STREET’s tax exemption application. Z STREET will seek to learn how such a policy was created, who created it, who approved it, to whom it was applied, as well as all other information regarding this policy.

A series of IRS documents called “Be On the LookOut” lists, which were released by Congress in June, 2013, pursuant to the TIGTA investigation, have already established that, as Z STREET alleges, while Z STREET’s application for tax exempt status was pending, the IRS did indeed create a special category of review for organizations seeking such status, if they were engaged in what the IRS called “occupied territory advocacy.”

Z STREET looks forward to using the discovery process to learn more about the precise nature, origin and effect of this policy, which the DC Circuit has now made clear is a violation of essential Constitutional rights.

Under the Obama Administration, the federal government has been staffed with bullies. Unless we learn how to stand up to these bullies and get them under control, we will lose the freedoms that we have taken for granted.

When You Turn On The Light, The Cockroaches Scatter

On May 8th I posted an article about Lyndon McLellan, who owns and operates a local convenience store in Fairmont, North Carolina. Mr. McLellan was the victim of an IRS tactic called civil asset forfeiture, a tactic that allows the IRS to take the assets of a small business owner without charging them with anything. The procedure is unconstitutional, but that hasn’t stopped the IRS. I have posted a few articles on this practice. If you use the search engine on this site, you can find them. Basically, if a business consistently is making bank deposits of less than $10,000, the IRS accuses them of ‘structuring’ to avoid scrutiny (and paperwork) and seizes their assets.

The IRS seized slightly over $100,000 from Mr. McLellan. Mr. McLellan was told that if he went public, the IRS would make things worse for him (how much worse can it get after they have taken all of your money for no reason?). The IRS offered to give him half of his money back. Mr. McLellan went to the press.

The Daily Caller posted a follow-up on this story yesterday.

The Daily Caller reports:

McLellan went to the press anyway. The IRS quickly changed its tune and gave Lyndon McLellan back all $107,702 of his money.

“The government cannot turn Lyndon’s life upside down and then walk away as if nothing happened,” Robert Everett Johnson, a lawyer at the Institute for Justice who represents Lyndon, said in a statement. “Lyndon should not have to pay for the government’s lapse in judgment. And the government certainly should not profit from its misbehavior by keeping the interest that it earned while holding Lyndon’s money. We’ll continue to litigate this case until the government makes Lyndon whole.”

When you turn on the light, the cockroaches scatter.

Is It Time For The IRS To Go?

On Tuesday the Civitas Institute posted an article on its website about one example of recent IRS abuses in civil forfeiture cases. This particular case involved a small businessman in the town of Fairmont, N.C. Lyndon McLellan owns and operates a local convenience store in Fairmont. Last summer, his entire business bank account, totaling $107,702.66, was seized by the Internal Revenue Service.

The article reports:

Here’s how it works. Generally, any person who receives more than $10,000 in cash in a single transaction or a series of related transactions must complete a “Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business.” Transactions are only considered “related” if they occur within a 24-hour period or if the recipient knows, or has reason to know, that each is one of a series of connected transactions. The idea is that large cash transactions might tend to have a criminal purpose, so the IRS requires recipients of such cash to declare their non-criminal purpose. This is not the rule that McLellan allegedly broke, because he received money in amounts that were less than $10,000 at a time and therefore was not required to report anything.

Instead, the IRS is alleging that Mr. McLellan did something called “structuring.” This is where cash transactions are structured in such a way as to avoid the $10,000 reporting requirement. The law exists because, once the IRS instituted the requirement, criminals could have easily structured cash payments in increments of $9,999 to fly under the radar.

However, Mr. McLellan’s case demonstrates a fundamental problem. Intended to catch criminals, the law ensnares small-business owners who are not trying to avoid reporting requirements, but are either simply trying to avoid burdensome paperwork or have no idea the structuring rule exists. This is why the IRS and Justice Department recently announced that they would cease using “structuring” as a reason to go after small business owners who are not suspected of crimes. So why is McLellan still having to fight for his hard-earned money?

First, the new rules were announced after Mr. McLellan’s assets were seized, and no provision was made for their mandatory retroactive application. Therefore, the announcement did not require any action on his case by anyone at the federal level.

I have done numerous stories on civil forfeiture in the past. If you put ‘civil forfeiture’ in the search engine on this website, you can see that this illegal seizure of property has gone on for some time.

The story at Civitas further reports:

Second, the federal prosecutor involved, Steve West, has declined to dismiss Mr. McLellan’s case. To be clear, he does have the power to drop the charges. Just this past December, federal prosecutors in Iowa dropped the charges against small-business owner Carole Hinders in a similar case. However, West has told McLellan’s attorney he needs to either resolve or litigate his case, and that no amount of publicity will lead to its dismissal. This despite the fact that  Congress and the IRS commissioner have specifically said his case fails to follow new federal forfeiture policies.

West’s idea of “resolving” the case would be for McLellan to enter into a settlement with the IRS in which he loses only half of his money – almost $60,000! It took McLellan over 13 years to earn this sum, and he is not giving it up without a fight.

This is no way to treat small business owners.

Meanwhile, the IRS and Justice Department recently announced that they would cease using “structuring” as a reason to go after small business owners who are not suspected of crimes. New Mexico has passed a law abolishing civil asset forfeiture. Civil asset forfeiture has been used as nothing more than a tool to take assets from innocent people. Everyone who has been involved in this practice needs to be kicked out of office as soon as possible.

 

The Rules Should Apply Equally To Everyone

On Wednesday, the Washington Examiner reported that Internal Revenue Service (IRS) employees who cheated on their taxes were promoted–not punished.

The article reports on the finding of the Treasury Inspector General for Tax Administration:

Nearly one-third of the employees from 2008 to 2013 caught cheating on their taxes received at least one bonus or raise within a year of being disciplined, investigators reported. These rewards include nearly $145,000 in bonuses, almost 900 hours of time-off awards and 30 temporary and permanent promotions.

…”Some employees had significant and sometimes repeated tax noncompliance issues, and a history of other conduct issues,” the report said. “Moreover, management had concluded that the employees were not credible. Nonetheless, the proposed terminations were mitigated by the IRS Commissioner.”

Federal law requires that IRS employees guilty of intentional tax law violations must be terminated, unless mitigated by the IRS commissioner. Since the IRS doesn’t have a policy to document the reason why intentional tax violators aren’t fired, it was unclear why the employees received lesser discipline.

It is time for Congress to come up with a tax code that abolishes the IRS. Aside from becoming political, which it was never supposed to be, it has also lost any moral bearing it might have had.

Distracting From The Real War

The Democrats have consistently blamed the Republicans for a ‘war on women.’ However, they have been waging a war on religion. I am not talking about a war on Islam–I am talking about a war waged on all deeply held religious beliefs, whether they be Islamic, Christian, or other.

Yesterday the Daily Caller posted an excerpt from a Hillary Clinton speech at the sixth annual Women in The World Summit :

“Laws [about reproductive health care and safe childbirth] have to be backed up with resources and political will,” Clinton said. “And deep-seated cultural codes, religious beliefs and structural biases have to be changed.”

This can be loosely translated as ‘the church needs to get over its problem with killing babies.’ Obviously, Mrs. Clinton also has a problem with those who hold a Biblical belief about homosexuality.

The success of American politicians who hold ideas that are contrary to Biblical Christianity shows that it is time for the people in the Bible-believing churches to get involved in politics. If Christians do not get out of their pews and get involved, they will soon find themselves not allowed to speak out in their own churches. The Internal Revenue Service is already moving in that direction (see rightwinggranny).

Here’s One Place We Can Cut Government Spending

The Washington Examiner posted a story today about Medicaid fraud. Medicaid is the federal program that provides medical care to people who can’t afford it.

The article reports:

Healthcare providers banned from Medicaid may have been reimbursed $213 million in federal money, thanks to a state agency oversight, a government watchdog reported.

Valid identification numbers — identifiers that ensure providers are eligible for Medicaid reimbursements — were missing from 800,000 Colorado claims in 2011, the U.S. Department of Health and Human Services inspector general reported Wednesday.

The state reimbursed the providers $424.4 million for the claims, of which, $213 million was federal money.

Regardless of how you feel about government-provided healthcare and whether or not it is constitutional, a $213 million dollar savings in federal spending would be nice. If one state has that much Medicaid fraud, how much do the other states have?

The article goes on to explain that the computer system in Colorado was not able to alert officials to missing or incorrect identification numbers and that the problem would not be corrected until 2016. However, the agency is now denying claims with invalid or missing numbers. It sounds like Colorado is working with the same programmers that designed the ObamaCare website.

Another Reason The Internal Revenue Service Needs To Go Away

I posted an article earlier today about the Internal Revenue Service (IRS) monitoring what is said in churches, but another story illustrating the problems with that organization has surfaced in the Washington Examiner today. It seems that money given to the IRS for the purpose of helping taxpayers with income tax questions was diverted to other things.

The article reports:

“Spending decisions entirely under the IRS’s control led to 16 million fewer taxpayers receiving IRS assistance this filing season,” said the report (House Ways and Means Committee report), which was prepared by majority staff of the tax-writing House panel chaired by Rep. Paul Ryan, R-Wisc.

“Other spending choices, including prioritizing employee bonuses and union activity on the taxpayer’s dime, used up resources that otherwise could have been used to assist another 10 million taxpayers,” the report said.

Budget cuts that Congress has imposed on the IRS in recent years resulted in part from “waste and misconduct” at the tax agency, including nearly $50 million spent on employee conferences that critics say were extravagant and unnecessary. Congress has reduced IRS funding by $1.2 billion since 2010.

The article goes on to explain many of the mixed-up priorities of the IRS. It seems to me that if the IRS cannot properly allocate the funding it is given, we should not give it any more money. There are a number of tax proposals out there that would abolish the IRS. I think it is time we looked at them more closely.

Defending Free Speech

The Washington Examiner is reporting today that Senate Finance Committee Chairman Orrin Hatch has asked Internal Revenue Service Commissioner John Koskinen not to change the Internal Revenue Service’s rules regarding political speech by nonprofit organizations.

The article quotes Senator Hatch:

“The IRS is just beginning to recover its reputation, and your agency is just beginning to regain trust from lawmakers,” Hatch wrote to Koskinen. “Do not throw all of that away in a quixotic and bizarre mission to regulate the political activity of Americans.”

Hatch said Congress will “have no choice” but to investigate the agency’s motivations if it issues the rules, claiming that it would be viewed as an act of political bias. He asked Koskinen to preserve all communications related to the rulemaking, in case the Obama White House or Treasury Department is playing a role in shaping it.

The IRS is not supposed to be a political organization. Unfortunately under President Obama it has become one. It would be nice to have an IRS Commissioner who would uphold the political neutrality of the IRS. Evidently John Koskinen is not that person.

Sometimes Justice Is A Slow Process

On Monday, The Daily Signal reported that Federal District Court Judge Susan Dlott granted a motion to compel and ordered the IRS to produce the names of the 298 targeted organizations identified by the IRS for the Treasury Inspector General. Last week U.S. Attorney for the District of Columbia, Ronald Machen disclosed the Justice Department‘s decision not to charge Lois Lerner with of Congress. This latest decision at least allows the probe of wrong doing by the Internal Revenue Service to continue.

The article reports:

…the plaintiffs have been trying through the discovery process to identify all of the conservative organizations unfairly targeted by the IRS so that they can seek class certification. If they can convince Judge Dlott to certify a class, then the lawsuit would expand from the ten original plaintiffs to all of the organizations on Lois Lerner’s hit list. This would greatly expand the risks to, and potential liability of, the government.

But the IRS, in a fitting bit of irony, refused to turn over the names of the organizations whose applications were mishandled, claiming that would violate the confidentiality requirements of Section 6103.

On April 1, in what must have seemed a cruel April Fool’s joke to the Justice Department lawyers handling the case, Judge Dlott denied a protective order sought by Justice Department to prevent the IRS from being forced to turn over this information. She pointed out that Section 6103 has an exemption for tax information “directly related to an issue in” a judicial proceeding. Since the identity of all of the targeted organizations “is directly related to the issue of class certification in this federal court proceeding,” she granted the plaintiffs’ motion to compel.

According to the article, the IRS will be forced to turn over:

  • All charts, lists, spreadsheets or indexes of groups that had their Applications for Tax Exemption selected or flagged by the IRS for heightened review based on an infamous BOLO (Be On the Look Out) edict issued by IRS officials;
  • The document listing the 298 organizations that the IRS sent the Inspector General on June 11, 2012; and
  • The document titled “Advocacy Case Tracking Sheet” that the IRS sent the Inspector General on the same date.

There is little doubt that the Obama Administration was using the IRS to suppress free speech. Hopefully those at the root of this action will be identified and charged with the appropriate crimes.

Let’s Give Away More Of Taxpayers’ Money

Sometimes you wonder if Congress were spending their own money, would they be a little more careful with it?

On Saturday, The DC Clothesline reported that the Democrats on the Senate Budget Committee voted unanimously to allow illegal immigrants to receive Earned Income Tax Credit (EITC) and child credit. Note the words “illegal immigrants.”

The article reports:

Sen. Jeff Sessions proposed an amendment, which would prevent illegal aliens from receiving the Earned Income Tax Credit (EITC)  and child credit.

…In the last year with complete records, 2010, the amount of fraudulent payments hit 4.2 billion dollars and all tax credits combined cost about 7.6 billion last year.

Democrats who voted against the amendment were:  Bernie Sanders, Debbie Stabenow,  Sens. Patty Murray, Ron Wyden, Sheldon Whitehouse, Jeff Merkley, Mark Warner, Tammy Baldwin, Tim Kaine and Angus King.

…Debbie Stabenow, who is one of many democratic women with IQs in single digits said she doesn’t believe illegal aliens are collecting federal benefits even though the idea came from the Treasury Inspector General who stated unequivocally that illegals are collecting benefits was right in front of her.

The amendment failed with unanimous support of the republicans on the committee.

Why don’t we either return illegal aliens to their home countries or take steps to prevent them from taking money out of the pockets of Americans. I don’t mind giving someone a hand-up when needed, but we have reached the point where illegal aliens are committing fraud to take money from Americans. That has got to stop.

Sometimes You Just Have To Keep Digging To Find The Truth

Yesterday the Washington Times reported that the Internal Revenue Service‘s Inspector General is conducting a criminal investigation into the disappearance of Lois Lerner’s emails.

The article reports:

Investigators have already scoured 744 backup tapes and gleaned 32,774 unique emails, but just two weeks ago they found an additional 424 tapes that could contain even more Lerner emails, Deputy Inspector General Timothy P. Camus told the House Oversight Committee in a rare late-night hearing meant to look into the status of the investigation.

“There is potential criminal activity,” Mr. Camus said.

Unfortunately, the Inspector General is still having problems getting the information he needs to pursue the case.

The article reports:

Rep. Gerald Connolly, Virginia Democrat, said Mr. George is refusing to turn documents over to him, prompting a heated reply.

“You’re not entitled to certain documents,” Mr. George said.

“Oh really? We’ll see about that, won’t we,” Mr. Connolly replied, saying that he questioned whether Mr. George could be trusted if he’s refusing to provide documents, yet is in charge of an investigation into whether the IRS stonewalled document requests.

The hearing was the latest chapter in the complex investigation into the IRS’s targeting of tea party groups for special scrutiny.

Several congressional committees are still probing the matter, and both the inspector general and the Justice Department are conducting criminal investigations.

I wouldn’t hold my breath for the results of the Justice Department investigation.

 

This Might Be A Good Place To Cut The Federal Budget

Fox News reported yesterday that the illegal immigrants that President Obama has granted amnesty will be eligible for retroactive tax refunds.

The article reports:

Byron York explained on “America’s Newsroom” that illegal immigrants will be eligible for the Earned Income Tax Credit, which is actually a government grant of up to $5,000 to working families.

“Illegal immigrants affected by the president’s edict will not only be eligible for those tax credits going forward, but three years retroactively,” York said. “So they’ll be able to collect quite a bit of money from the treasury.”

York explained that the IRS has issued taxpayer identification numbers to people who are in the U.S. illegally, but working, so that they can pay taxes.

Illegal immigrants who filed taxes that way over the past three years can now go back and amend those previous tax forms to claim the Earned Income Tax Credit.

Unbelievable.