Taxable Talk

Yes, I’m still on vacation. But twin developments in the IRS scandal force me to post. Yesterday, the IRS released documents to Judicial Watch regarding the IRS scandal. Judicial Watch had sued the IRS under the Freedom of Information Act (FOIA) to obtain the documents.

I need to be brief (I am on vacation), so I’ll just include the summary page:

“These recovered Lois Lerner emails had to be dragged out of the Obama IRS, which is still resisting a federal court order requiring disclosure of Lerner’s ‘lost’ emails,” said Judicial Watch President Tom Fitton. “This material shows that the IRS’ cover-up began years ago. We now have smoking-gun proof that top officials in the Obama IRS unlawfully harassed taxpayers just to keep them from complaining to Congress about IRS’ targeting and abuse. No wonder the Obama IRS has had such little interest in preserving or finding Lois Lerner’s emails.”

Yes, the IRS lied to Congress. There’s no other way of putting it. And to me it seems more and more likely that someone in the Administration ordered the targeting.

Today was a scheduled “status hearing” in Judicial Watch’s FOIA lawsuit. Judge Sullivan was not happy with the IRS. He issued the following order:

At the July 29, 2015 status hearing, the Government agreed that the Court’s July 1, 2015 oral order from the bench was clear and enforceable. Nonetheless, the Government reasoned it inappropriate to file a motion for reconsideration until a written order was issued. As expressed at the hearing, the Government’s reasoning is nonsensical. Officers of the Court who fail to comply with Court orders will be held in contempt. Also, in the event of non-compliance with future Court orders, the Commissioner of the IRS and others shall be directed to show cause as to why they should not be held in contempt of Court. The Court’s July 1, 2015 ruling from the bench stands: (1) the Government shall produce relevant documents every Monday; (2) the Government’s document production shall be accompanied by a status report that indicates (a) whether TIGTA has turned over any new documents to the IRS, (b) if so, the number of documents, and (c) a timeframe for the IRSs production of those documents. Signed by Judge Emmet G. Sullivan on July 29, 2015.

Judge Sullivan is definitely annoyed with the IRS and the Department of Justice’s conduct in this case. I’ll again note Judicial Watch’s summary as it really says it all:

“In a dramatic court hearing today, Judge Sullivan made it clear he would personally hold accountable the IRS Commissioner Koskinen and Justice Department attorneys for any further contempt of his court orders in Judicial Watch FOIA lawsuit,” said Judicial Watch President Tom Fitton. “The missing and-then-not missing Lois Lerner saga is a stark example of the Obama administration’s contempt for a federal court and the rule of law. That Obama administration officials would risk jail rather than disclose these Lerner documents shows that the IRS scandal has just gotten a whole lot worse.”

I now return to my regularly scheduled vacation.

Remember the IRS Scandal? Well, the nuggets continue to drip out. On Friday, Judicial Watch announced that “New Documents Show IRS Used Donor Lists to Target Audits.” Here’s an excerpt:

But then, in February 2011, at least five donors of an unnamed organization were audited.

The documents show that Crossroads GPS, associated with Republican Karl Rove, was specifically referenced by IRS officials in the context of applying the gift tax. Seemingly in response to the Crossroads focus, on April 20, IRS attorney Lorraine Gardner emails a 501(c)(4) donor list to former Branch Chief in the IRS’ Office of the Chief Counsel James Hogan. Later, this information is apparently shared with IRS Estate Gift and Policy Manager Lisa Piehl while Gardner seeks “information about any of the donors.”

Needless to say, the IRS is supposed to ignore politics. Given an unnamed IRS official stating, “The U.S. Chamber of Commerce is a 501(c)(6) organization and may find itself under high scrutiny. One can only hope[,]” the reality is different.

Since the IRS and the Obama Administration is stonewalling Congress in telling what happened, what is Congress to do but cut the IRS’s budget. Frankly, it’s the only action they can do. I don’t like the choice, but it’s the only option available. If and when the IRS and the Obama Administration open up, hopefully the IRS’s budget will be increased but until then the taxpaying public (including tax professionals) is paying the price for the Obama Administration’s obfuscation.