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.

Rewarding Incompetence At Taxpayer’s Expense

On Wednesday, Fox News reported that the government has awarded a $4.5 million IT contract for its new ObamaCare tax program to CGI, the company responsible for the ObamaCare internet roll out. This is an IRS contract to provide “critical functions” and “management support” for its Obamacare tax program. Really? Wasn’t there anyone else?

The article reports:

Prior to terminating CGI’s contract, Health and Human Services Secretary Kathleen Sebelius told Congress, “I am as frustrated and angry as anyone with the flawed launch of HealthCare.gov.” She called the CGI-designed website a “debacle.”

A joint Senate Finance and Judiciary Committee staff report in June 2014 found that Turning Point Global Solutions, hired by HHS to review CGI’s performance on Healthcare.gov, reported they found 21,000 lines of defective software code inserted by CGI.

Scott Amey, the general counsel for the non-profit Project on Government Oversight, which reviews government contracting, examined the IRS contract with CGI.

“CGI was the poster child for government failure,” he told The Daily Caller. “I am shocked that the IRS has turned around and is using them for Obamacare IT work.”

Who in the world is making these decisions, and why?

The article reports:

Curiously, CGI features its online health work in Helsinki, London, Alberta, Saskatchewan and for the New York State of Mental Health, but says nothing about its ruined rollout of Obamacare web sites.

In Canada, CGI’s parent company, Montreal-based CGI Group, was just as deficient.

Ontario health officials fired CGI after it failed to deliver a flagship provincial online health registry.

About 7 million Obamacare policyholders and about 20 million Americans who don’t have healthcare coverage will depend this year on the proper IRS processing of their 2014 income tax returns.

Improper processing of health information could cause some Americans to receive smaller tax refunds, or even pay more out-of-pocket for their government-issued healthcare policies.

Welcome to a government run by the Keystone Kops.

Adding To The Confusion Of ObamaCare

CNN posted an article today about how the subsidies paid to ObamaCare subscribers are going to impact their taxes. No one told them this was going to be taxable!

The article reports:

Obamacare enrollees who received subsidies to help pay for coverage will soon have to reconcile how much they actually earned in 2014 with how much they estimated when they applied many, many months ago.

This will likely lead to some very unhappy Americans. Those who underestimated their income either will receive smaller tax refunds or will owe the IRS money.

That’s because subsidies are actually tax credits and are based on annual income, but folks got their 2014 subsidy before knowing exactly what they’d make in 2014. So you’ll have to reconcile the two with the IRS during the upcoming tax filing season.

Filing taxes has never been any fun–ObamaCare just made it worse.

Subsidies were what kept the cost of ObamaCare down for subscribers:

We’re not talking chump change. Those who applied through the federal exchange received an average monthly subsidy of $264, according to the most recent figures reported by the Obama administration. They only had to pay $82 a month, on average, for coverage, Roughly 85% of total enrollees received help with insurance premiums. The administration last month said 2014 enrollment was 6.7 million.

Those who underestimated their earnings could owe thousands of dollars, though there is a $2,500 cap for those who remain eligible for subsidies. The threshold for eligibility is based on income – $45,900 for an individual and $94,200 for a family in 2014.

In June, the Supreme Court is expected to rule on whether or not subsidies can be given in states that did not create healthcare exchanges. If the ruling says no, we can expect total chaos in the healthcare sector of the economy while everyone regroups. Meanwhile, the taxman cometh!

The IRS Smoking Gun Will Be Released Tuesday Morning

The Daily Caller posted a story today stating that they have received an advance copy of a House Oversight and Government Reform Committee that definitively proves malicious intent by the IRS to improperly block conservative groups that an IRS adviser deemed “icky.”

The article lists six findings from the report:

1. The IRS admitted that the front office was “spinning” about the targeting rumors as early as 2012, after IRS commissioner Douglas Shulman denied the tea party targeting to Congress.

2. Then-IRS commissioner Steven T. Miller almost broke down and told the truth about the tea party targeting at a July 2012 hearing, but Lerner’s sidekick Nikole Flax told him not to.

3. The IRS definitely treated tea party applications by a different standard than applications from other (c)(4) groups.

4. Lois Lerner expressed her frustration about having to potentially approve a lot of groups, and her colleagues in the agency assured her that she wouldn’t have to.

5. So the IRS reached out to outside advisers to help come up with ways to deny tax-exempt status to “icky” organizations.

6. A May 2011 email from a lawyer in the IRS chief counsel’s office made clear that the agency sought to use a new “gift tax” to target donors to nonprofit political groups.

Lying to Congress is perjury and I believe it carries a jail term. Unfortunately, the charges would have to be brought by the Justice Department, and I don’t see that happening. At any rate, this information needs to be shouted across the media, although my bet is that most of the  media won’t report it.

A New Twist On The Amnesty Story

Judicial Watch posted a story yesterday about the federal government uncovering a criminal ring of illegal immigrants that used stolen identities to defraud the U.S. government out of $7.2 million in tax refunds.

The article reports:

The mastermind of this sophisticated operation is a resourceful delinquent in Frankfurt, Delaware who runs a landscaping and cleaning business called “Las Tres Mujeres” (the three women in Spanish). Her name is Linda Avila and she’s admitted in federal court that she filed more than 1,700 fraudulent tax returns with the Internal Revenue Service (IRS) using stolen identities assigned to migrant workers—mostly from Mexico—living in the U.S. illegally.

Avila altered W-2 forms with white out to cover up the names, social security numbers and addresses then wrote in other names and addresses to create the fraudulent returns, according to a Department of Justice (DOJ) announcement. Foreign dependents were often added to increase the refund amounts. The IRS then cut refund checks ranging from $4,000 to more than $7,000, according to the feds. Avila provided the illegal aliens fake identification documents so they could cash the IRS refund checks. The illegal alien migrant workers kept a small fee and gave most of the money to Avila.

When federal agents searched Avila’s home in Delaware they seized about 17 boxes of fraudulent tax records, according to the DOJ document outlining the case. Templates for fraudulent W-2 forms and identification documents were also found on her computer. The records included copies of approximately 1,754 tax returns filed between 2008 and 2014 for tax years 2004 through 2013. The total loss to the IRS based on the fraudulent returns is approximately $7.2 million, federal authorities estimate.

Back in July a federal grand jury in Norfolk Virginia indicted Avila on charges of conspiracy to make false claims, mail fraud and false claims against the United States. On November 17, the same week Obama issued a long-anticipated administrative amnesty, Avila finally pleaded guilty in federal court to conspiracy and mail fraud. She faces three decades in prison and remains free pending sentencing on February 17. The feds have not disclosed if her illegal immigrant partners in crime will be charged.

Let’s close the borders, change the immigration laws to let the people who have been waiting patiently in line come in, investigate the activities of the people who are here illegally, and decide which of the people who are here illegally will be an asset to America.

Funding Illegal Immigrants Through The Tax System

Yesterday the Daily Caller posted an article about Congressional efforts to agree on a tax deal. We are currently dealing with a lame-duck Congress that does not seem to be able to agree on anything. Hopefully, the new Congress will do better.

The article reports:

President Barack Obama quietly killed a draft tax-cut because the GOP leadership wouldn’t agree to his demand that valuable tax breaks be given to millions of illegal immigrants, according to a Politico article about the secret negotiations.

Just before Thanksgiving, “the deal fell apart just as it seemed to be coming together… [because] Republicans worried undocumented immigrants targeted by [Obama’s Nov. 21 amnesty] would begin claiming the credits,”

The tax bill (now dead) was supposed to extend the temporary tax breaks that Congress traditionally extends at the end of every year. Because of the possibility of extending tax breaks to illegal immigrants, the tax breaks were not extended, and all Americans will face increased taxes next year.

So what is this actually about? The Earned Income Tax Credit Program has been plagued by fraud for years. In May 2014, the Washington Examiner reported:

The Treasury Department has released its latest report on the fight against widespread fraud in the Earned Income Tax Credit program. The problem is, fraud is still winning. And there’s not even much of a fight.

“The Internal Revenue Service continues to make little progress in reducing improper payments of Earned Income Tax Credits,” a press release from Treasury’s inspector general for Tax Administration says. “The IRS estimates that 22 to 26 percent of EITC payments were issued improperly in Fiscal Year 2013. The dollar value of these improper payments was estimated to be between $13.3 billion and $15.6 billion.”

Now Congress is battling over whether or not to extend the Earned Income Tax Credit to illegal immigrants. What are they thinking?

The article at the Daily Caller reminds us that businesses support President Obama’s Immigration policy because it will drive down wages and increase their profits. This is the result of the policy of a President who complains about wage inequality.

The Daily Caller also reports:

Obama is offering work-permits, $2 trillion in taxpayer benefits and a quick route to citizenship to at least 4 million of the estimated 12 million illegal immigrants in the country. He is also trying to win business support for his plan by boosting the inflow of guest-workers sought by blue-chip companies.

This is not the way to build the American economy.

All Accounts Have Not Been Settled

Yesterday John Hinderaker posted an article at Power Line about one aspect of the Internal Revenue Service (IRS) scandal that has not gotten as much publicity as some other aspects of the scandal.

The article reports:

The Obama Administration’s IRS scandal is multi-faceted. In addition to the persecution of conservative non-profits by Lois Lerner et al., the question has been percolating for some years whether Obama’s IRS has transferred confidential taxpayer information to Obama’s White House in violation of federal criminal laws. The issue first arose when Austin Goolsbee of the president’s Council of Economic Advisers told reporters that he had information about Koch Industries that could only have come, illegally, from confidential IRS files. When questions were asked, the administration immediately clammed up.

Years later, the judicial system may be poised to expose another layer of Obama corruption. A group called Cause of Action began a Freedom of Information Act lawsuit against the Department of the Treasury, and for several years, your taxpayer dollars have funded the administration’s cover-up.

The cover-up is beginning to unravel. A federal court in Washington, D.C. has ordered the Treasury Department to respond to Cause of Action’s request for documents.

The article further reports:

The Treasury Department’s lawyers wrote Cause of Action’s counsel an email that reads in part:

My client wants to know if you would consent to a motion pushing back (in part) TIGTA’s response date by two weeks to December 15, 2014. The agency has located 2,500 potentially responsive documents and anticipates being able to finish processing 2,000 of these pages by the December 1 date. It needs the additional two weeks to deal with the last 500 pages to determine if they are responsive and make any necessary withholdings. We would therefore like to ask the court to permit the agency to issue a response (including production) on December 1 as to any documents it has completed processing by that date, and do the same as to the remaining documents by December 15.

I suspect a good part o the time the government has requested will be spent attempting to scrub the documents of anything incriminating, but even at that, it is a pretty safe bet that some very damaging information will be revealed.

The story concludes:

This particular story is farce, not tragedy. It will wend its absurd way through the court system for years to come, probably arriving at no conclusion until the scofflaw Obama administration is safely out of office. In the meantime, federal criminal laws governing the privacy of IRS data, like the criminal laws generally, are a source of hilarity among Democrats. Democrat cronies sip Scotch and light cigars–I hope not with $100 bills–laughing at the rest of us who work to pay the taxes that support them in the luxury to which they have happily become accustomed. I have always thought that the term “ruling class” was ridiculous as applied to the United States, but the Obama administration is causing me to re-think that view.

How many members of the Nixon administration ultimately went to jail? I think no more than five or ten. The Obama administration has violated criminal statutes with an abandon that Nixon and his minions never dreamed of. An accounting remains; I think there are a considerable number of Obama minions and cronies who should be behind bars.

If the Department of Justice ever returns to being a Department of Justice, I believe much what has happened to the IRS and the Justice Department under President Obama will be undone. If the damage is not undone, we will be in danger of losing our representative republic.

Protecting The Rights Of American Businesses

The problem with having a President and a cabinet that lack hands on business experience is that they lack hands on business experience. The quote “A government big enough to give you everything you want, is a government big enough to take away everything that you have.” is attributed to Thomas Jefferson although it is not found in any of his papers. Regardless of who said it, the quote is accurate.

In its Saturday/Sunday edition, the Wall Street Journal posted an editorial about the nomination of Loretta Lynch as U.S. Attorney General. Ms. Lynch is currently in charge of the U.S. Attorney’s Office for the Eastern District of New York. She has been busy there.

The Fourth Amendment to the U.S. Constitution states:

Amendment IV

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

Evidently Ms. Lynch didn’t read that part of the Constitution, and unfortunately, she is not the only government official who did not read that part. As of late, prosecutors have been using civil forfeiture laws to confiscate private property and use the money gained to shore up state and municipal budgets. One example of this in Ms. Lynch’s district is the case of Jeffrey, Richard and Mitch Hirsch. In 2012 the federal government drained their bank account of $446,651.11. The bank account was used for deposits from Bi-County Distributors, a company the brothers have run for 27 years. The company stocks convenience stores in the region with candy and snack food.

The editorial explains:

According to the federal government, the brothers came under suspicion because of the frequent small deposits they made in the bank. Under federal law, banks are required to report cash deposits of more than $10,000 at a time to the Internal Revenue Service. Frequent deposits beneath the $10,000 threshold can also trigger federal scrutiny on suspicion the depositors are seeking to evade federal oversight for crimes like money laundering or drug trafficking.

The Hirsch brothers run a small business that deals in small amounts of cash, a fact that the government surely noticed, since they were never charged with a crime. But more than two years after the government grabbed the hundreds of thousands of dollars, none of it has been returned. According to the Institute for Justice, which is representing the family in a lawsuit, the government has also denied the Hirsches a prompt hearing on the forfeiture, putting it in violation of the 2000 Civil Asset Forfeiture Reform Act.

Ms. Lynch’s office brought in more than $113 million in civil actions between 2011 and 2013. Unfortunately, these cases have spread across the country. Between 2003 and 2011, annual payments from forfeiture went from $218 million to $450 million.

Many small businesses deposit small amounts of cash at various times of the day. Some do it out of fear of theft, others because that is the way their computer bookkeeping systems work, and others because that is how the timing of their office staff works. A small company I worked for at one point made one deposit a day, but since their computer program could only handle twelve checks on one deposit slip, it appeared to be multiple small deposits.

The editorial in the Wall Street Journal suggests that when Ms. Lunch gets her nomination hearing, someone should ask her about the Hirsches.

 

Using The Internal Revenue Service To Target Conservative Speech

We still don’t know exactly what went on with the Internal Revenue Service (IRS) and the targeting of conservatives and conservative groups. I can tell you that after making a small donation to the Tea Party a few years ago, my husband and I were audited for the first time in 45 years (nothing in our taxes had changed). Well, evidently the targeting of conservatives was aided and abetted by some members of Congress.

Yesterday The Daily Caller reported that they had obtained copies of correspondence between Senator Jeanne Shaheen and the IRS showing a plan to harass conservative groups during the 2012 election.

The article reports:

“The IRS is aware of the current public interest in this issue,” IRS chief counsel William J. Wilkins, a White House visitor described by insiders as “The President’s Man at the IRS,” personally wrote in a hand-stamped memo to “Senator Shaheen” on official Department of the Treasury letterhead on April 25, 2012.

The memo, obtained by TheDC, briefed the Democratic senator about a coordinated IRS-Treasury Department plot to target political activity by nonprofit 501(c)(4) groups. The plot was operating out of Lois Lerner’s Tax Exempt Government Entities Division. 

 …Shaheen got the inside info from the IRS, making it clear she was the point person in a group composed of six close Democratic colleagues including Chuck Schumer and Al Franken, who joined with Shaheen in quietly writing a letter to then-IRS commissioner Doug Shulman expressing their concern about new nonprofit groups engaging in political activity in 2012.

The Democratic senators’ publicly available March 9, 2012 letter asked the IRS to “immediately change the administrative framework for enforcement of the tax code as it applies to groups designated as ‘social welfare’ organizations” by introducing a new “bright line test” for how much a tax-exempt group can invest in political activity and by setting a new rule that at least 51 percent of a group’s activity must non-political. The senators called for more elaborate disclosures about finances and “undertakings” in groups’ form 990 submissions and sought new rules about how much donors could write off as business expenses.

The problem here is that the new rules would be specifically aimed at conservative groups. There was no effort made to be even-handed about putting restrictions on liberal PAC’s, unions, or other groups on the left side of the aisle.

Unfortunately many Democrats do not endorse the concept of free speech when it does not conform to their ideas. The Democrat party has also shown that it is not above using the full weight of the government to stifle conservative speech. Using the government as a political weapon is not an idea that belongs in a representative republic.

What Happens Next?

On Thursday, CNS News reported the following:

U.S. District Judge Ronald White concluded Tuesday that the IRS rule altering the Obamacare law and providing billions in subsidies is “arbitrary, capricious and abuse of discretion“:

“The court holds that the IRS rule is arbitrary, capricious, and abuse of discretion or otherwise not in accordance with law, pursuant to 5 U.S.C.706(2)(A), in excess of summary jurisdiction, authority or limitation, or short of statutory right, pursuant to 5 U.S.C. 706(2)(C), or otherwise is an invalidation of the ACA [Affordable Care Act], and is hereby vacated. The court’s order of vacatur is stayed, however, pending resolution of any appeal from this order.”

The subsidies were a major part of ObamaCare. I am sure this case will be making its way up to the Supreme Court. Meanwhile, there will be more uncertainty about ObamaCare, and people and businesses will be waiting to see what happens before wanting to spend any extra money they may currently have.

The article concludes:

Oklahoma Sen. Jim Inhofe (R) also praised Judge White’s decision, saying that the Obama Administration is trying to fix a legally-dubious law using waivers and exemptions:

“Today’s decision is a reminder that the President’s broken promises of affordable, accessible health care are the result of broken policy. The Obama Administration has tried to make the law work with waivers and exemptions, but the courts continue to confront the legality of this legislation that was rushed through a Democrat-controlled Congress.”

“While it will undoubtedly take time for Oklahoma’s case to play out in the federal court system, I am confident in Attorney General Scott Pruitt and that our state’s argument will prevail.”

Tuesday’s decision is the latest in a wave of court losses for Obamacare.

Currently, over a hundred lawsuits have been filed against Obamacare – and Obamacare has lost 91% of the cases decided to-date, (71 losses out of 78 decisions), according to the latest tally by The Beckett Fund.

Stay tuned and get out the popcorn.