House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., today released a new staff report, “The Internal Revenue Service’s Targeting of Conservative Tax-Exempt Applicants: Report of Findings for the 113th Congress.” The report represents findings from the review of over 1.3 million pages of documents and 52 transcribed interviews with IRS, Treasury, and Justice Department employees.The report’s conclusion reads in part:
“It appears that the org is funneling money to other orgs for political purposes. However, I’m not sure we can deny them because, technically, I don’t know that I can deny them simply for donating to another 501(c)(4). . . . Any thoughts or feedback would be greatly appreciated.” “I think there may be a number of ways to deny them. Let me talk to Sharon [Light] tomorrow about it and get some ideas from her as well. . . . This sounds like a bad org. :/ . . . This org gives me an icky feeling.” “These [Tea Party] organizations mostly concentrate on their activities on the limiting government, limiting government role, or reducing government size, or paying less tax. I think it[‘]s different from the other social welfare organizations which are (c)(4).”Quoting an e-mail from a top deputy to Lois Lerner: “This line in particular stood out: ‘We suspect we will approve the majority of c4 applications.’ That’s an interesting posture.” Emphasis of “ ” is employee’s own.
In one e-mail to Nikole Flax, Miller wrote: “I am beginning to wonder whether I should do [Chairman] Boustany[’s hearing] and affirmatively use it to put a stake in politics and c4.” Flax responded: “[I]f the hearing is as generic as I recall, seems like you are too senior. Would be silly to think the c4 issues won’t come up – but I think Sarah [Hall Ingram] could handle it fine as well.”In May 2011, an attorney in the IRS Chief Counsel’s office wrote to his superiors that the “plan is to elevate the issue of asserting gift tax on donors to 501(c)(4) organizations to the Chief Counsel and the Commissioner.” On July 1, 2011, IRS Associate Chief Counsel Curt Wilson issued a memorandum to Chief Counsel William Wilkins on the gift tax issue. Wilson concluded that “[b]ecause there is no specific exemption from the gift tax for a contribution to an organization exempt from income tax under § 501(c)(4), a contribution to such an organization is subject to gift tax under § 2501.” Lerner, another e-mail shows, supported this conclusion: “[T]o be clearer, the courts have said specifically that contributions to 527 political organizations are not subject to the gift tax – nothing that I am aware of about contributions to organizations that are not political organizations.”
The Committee has identified eight senior leaders who were in a position to prevent or to stop the IRS’s targeting of conservative applicants. Each of these leaders could have and should have done more to prevent the IRS’s targeting of conservative tax-exempt applicants.The eight: Doug Shulman, Former Commissioner; Jonathan Davis, Chief of Staff to Shulman; Steven Miller, Former Acting Commissioner; Nikole Flax, Chief of Staff to Miller; William Wilkins, Chief Counsel; Joseph Grant, Former Acting Commissioner, Tax Exempt and Government Entities; Lois Lerner, Former Director, Exempt Organizations; Holly Paz, Director, Rulings and Agreements.***The report is not a final report on the IRS Targeting scandal but it nonetheless draws on more documents and interviews than any other report released to date. IRS continues to produce responsive documents and other federal agencies have yet to fully comply with the Committee’s requests for information. The Committee presents these facts and understandings as the 113th Congress concludes to inform the public about what it has learned and what remains clouded in secrecy. Recent revelations that e-mails from officials like former Exempt Organizations Director Lois Lerner, which the IRS once said were lost forever, can now be recovered offers renewed hope that more answers may come in the next Congress.Click here for a link to the report, “The Internal Revenue Service’s Targeting of Conservative Tax-Exempt Applicants: Report of Findings for the 113th Congress”