IRS smoking gun awakens sleeping giant

By Bob Unruh

A member of Congress is warning that it’s time to “prosecute” the IRS, and a top-flight legal team is planning an investigation – with the possibility of a request for congressional hearings – after discovering from a WND report that the IRS sends small exempt organizations to a major progressive think tank to have tax details processed.

“We’re going to be conducting an investigation,” said attorney Kevin Snider of the Pacific Justice Institute. “If there’s something that’s questionable, we’re going to ask for congressional hearings.”

He said the government needs to have a standard “above reproach” and exhibiting “complete neutrality” for its operations, especially in work such as that conducted by the IRS, which already has been facing criticism for its admitted targeting of conservative organizations.

The warning about a prosecution came from Rep. Michele Bachmann, R-Minn., who said, “WND did the investigation the IRS refused to do.”

“The IRS fox isn’t guarding the henhouse,” she said, “The IRS fox has set up the deep fryer for immediate carcass processing! Served ‘progressive style’!”

She continued, “The people to Holder: Time to prosecute!”

WND’s report revealed the IRS contracts with an avowedly “progressive” organization, the Urban Institute, supported by George Soros to process data filed by smaller tax-exempt groups.

The president of Urban Institute, also, is Sarah Rosen Wartell, who is the co-founder of the Center for American Progress. That widely is considered ground zero for the development of many of the Obama administration’s progressive policies.

For certain organizations with limited income and charitable goals, the IRS directs them to file with that supposedly “nonpartisan” organization, where employees have a record of donating nearly 100 percent of their political contributions to Democrats.

Officially, the Urban Institute advocates for totally socialized medicine, carbon taxes and amnesty for illegal aliens.

Cleta Mitchell, a top-flight Washington attorney, told WND, “If true, this is a violation of federal law. And since most of the tea-party groups have annual revenues of [$50,000] or less, this would redirect their filings to a group whose mission is fundamentally at odds with tea-party organizations.”

She continued, “Federal law strictly prohibits the disclosure of confidential taxpayer information to persons outside the IRS. It is a felony to disseminate the information.

“Surely this cannot be happening. Surely,” she said. “This would be well more than a ‘smidgen’ of corruption.”

Mitchell, a partner in the Washington-based law firm Foley & Lardner LLP, is well known for providing expert legal advice to conservative groups seeking tax-exempt status.

She was referring to Obama’s claim on Sunday that there is no IRS scandal, and his insistence there was “not even a smidgen of corruption” in the agency’s targeting of conservative groups applying for tax-exempt status.

Snider told WND another approach might be to seek a court order staying action on certain IRS procedures “until the Urban Institute is out of the picture.”

And Tom Fitton, chief of Judicial Watch, recalled for WND his own organization’s fights with the IRS.

That followed immediately after Judicial Watch’s criticism of then-President Bill Clinton.

“They essentially audited us for our entire history up to that point,” he said. “We were told, ‘What do you expect when you sue the president? If you’re going to scrutinize the president, the government is going to scrutinize you.'”

The organization has detailed its war with the IRS in “The Corruption Chronicles: Obama’s Big Secrecy, Big Corruption, and Big Government.”

Fitton recalled that it was a memo from the White House to the IRS commissioner that started the audits of his organization.

“No one did anything about it,” he said. “It was as lawless as anything Nixon would have dreamed of.”

Then, he said, “Look what’s happening now.”

David French, senior counsel for the American Center for Law and Justice, which is representing dozens of those targeted tea-party groups, said, “It’s disturbing but hardly surprising that the IRS – which has proven itself to be a highly partisan government agency – has partnered with partisans outside the government. Partnering with politic radicals to perform a basic function of the IRS is no way to run a government.

“This is just the latest in a series of IRS behaviors that are unacceptable. This revelation adds to the decline in trust and confidence that Americans have in the Obama administration. And it’s one more reason that we believe it’s time for a special prosecutor – an independent investigation – to hold those responsible for corruption and abuse accountable.”

WND columnist Christopher Monckton of Brenchley suggested another approach altogether.

“Where a department behaves as corruptly as the IRS, first selectively moving against conservative nonprofits only and then forcing all nonprofits to file their tax returns with a hard-left group only, with the menace that if they did not do so they would lose their nonprofit status, one statute springs to mind.

“The RICO statute,” he wrote.

“The IRS, by its actions, has shown itself to be a racketeer-influenced criminal organization. The nonprofits should band together, now, and mount a RICO action against it.

“Their lawyers will tell them they cannot possibly win. But they will win. And win big. The RICO statute, designed to deal with an earlier generation of Chicago gangsters, pays the successful plaintiffs three times their costs in fighting the action. Once the courts have held the IRS to be corrupt, it can and will be closed down,” he wrote.

He said a foreign company should be contracted for the IRS work.

“An organization that has behaved with such outrageous disregard for the iron obligation of strict political neutrality that is the first and most sacred duty of any tax-gatherer can only have done so because throughout its senior management there is ingrained contempt for the taxpayer and for the law,” he added. “The IRS has put politics above the law. Sack the lot.”

The IRS targeting of tea-party and conservative groups arose in May 2013 when the agency admitted during a news conference that groups with “tea party” or “patriots” in their names were flagged for extra IRS review.

Dozens of organizations ultimately filed lawsuits over the targeting, and members have testified about the questions they faced from the IRS, such as about the content of their prayers, whether they would promise not to protest the Planned Parenthood abortion agenda, and others.

Many still are in court, and Mitchell explained to Congress she knew that as far back as October of 2011 the targeting was being guided by Washington, because when she contacted the Cincinnati IRS agent assigned to one of her clients and offered to try to help smooth the application process, she said she was told, “Oh, there’s a task force in Washington; we can’t do anything until we hear back from Washington.”

Rep. Trey Gowdy, R-S.C., was baffled by the president’s defense of the actions.

“How can the president say there’s not a smidgen of criminality when Lois Lerner invoked the 5th Amendment, 41 witnesses haven’t been interviewed – including the two that are here right now? How can he possibly draw that conclusion?!” Gowdy demanded.

The latest maneuver in the continuing battle is the pending proposal from the IRS to impose new rules on those nonprofits that essentially would prevent them from speaking about candidates or issues.

“This is a real assault on the First Amendment rights of American citizens, and we need to do everything we can to stop the IRS from implementing these new rules,” Mitchell said.

She said the goal of the rules is “to restrict the free speech of conservatives in the United States. Progressives tend to focus on process issues, and these new IRS regulations are a direct attempt by the political left to rewrite the rules of political engagement unfairly in their favor.”

Even the Los Angeles Times has unabashedly labeled the Urban Institute a “leading liberal think tank.”

It has released dozens of extensive reports advocating redistribution through taxes. The “Tax Distribution and Economic Trends” section of its website provides links to many of those reports.

The group is a proponent of the carbon tax, which has been criticized as too heavily taxing the United States while distributing those funds to the Third World.

George Soros

Just last year, Soros provided a $250,000 grant to the organization for “collecting data and conducting sophisticated empirical research and analysis on the impact of various proposals for housing finance reforms on low-income families, communities of color and underserved markets.”

Another Urban Institute donor is the Joyce Foundation, an anti-gun group where Obama served on the board from 1994 to 2002.

While Obama was on the Joyce Foundation board, the organization granted tens of millions of dollars to gun-control organizations. Also numerous large grants were provided to a group called Leadership for Quality Education, which was run by John Ayers, the brother of Weatherman terrorist Bill Ayers.

The institute gets huge amounts of federal dollars, getting nearly $55 million “during the last few years of the Clinton administration.” A 2011 filing by the organization revealed that its “government grants (contributions)” during that year totaled more than $44 million.

The Form 990, which the IRS directs exempt groups to file through the Urban Institute, provides the public with financial information about the group, and it also is used by the government to keep up to date with nonprofits and prevent such organizations from abusing their tax-exempt status.

Failure to complete a Form 990 for three consecutive years automatically results in the loss of tax-exempt status.

The forms can be filed by larger organizations either electronically or by filling out and mailing a complete form manually. Most nonprofits whose annual gross receipts are $50,000 or less are required to electronically submit Form 990, which is also known as the e-Postcard.

In 2007, the IRS modified its Form 990, requiring more significant disclosures on corporate governance and boards of directors.

The Urban Institute’s partnership with the IRS, meanwhile, goes back to 1997, when the nonprofit was contracted to digitize and help make the data associated with Form 990s more accessible to the public.

Also in 1997, the Urban Institute contracted with Philanthropic Research, Inc., which later renamed itself GuideStar, to digitize form 990s.

During Clinton’s term in office, IRS audits were conducted against individuals and groups who caused problems for the administration. Several prominent conservative groups found themselves facing IRS audits following their criticism of the president and his policies. Among the conservative groups targeted for audits were the Heritage Foundation, the National Rifle Association, Concerned Women of America, Citizens Against Government Waste, National Review, American Spectator, David Horowitz’s Center for the Study of Popular Culture and the Western Journalism Center.

In his 1999 column, “Clinton’s IRS gestapo,” WND Editor Joseph Farah wrote, “In a very real way, the IRS has been Clinton’s secret police agency – the go-to guys when no other punishment will do.”

A leader of a small exempt organization, who did not want his name used, told WND, “By unconstitutionally using a left-leaning ‘think tank’ to decide who lives or dies, Obama has turned the IRS into a conservative tar pit run by liberal policy activists. By denying 501c(4) status to conservative 501c(3) nonprofits, they are already trapped as non-political entities. Where most non-501c(4) organizations advocate for something in their area of interest, they are corralled for mass sacrifice on the altar of radical liberalism. I predict we will see mass revocations of thousands of good conservative corporate charters, most likely done all at the same time so we cannot stop them in time. This must be stopped now and a transparent, objective, non-partisan method for reviewing 990-N forms implemented immediately before the mass execution takes place.”

Media interested in interviews about this story should email WND.

Related stories:

“Did Bill Clinton turn IRS into Gestapo?”

“IRS leaking conservatives’ confidential info to left”

Smoking gun in IRS political targeting

Related column:

“IRS political-targeting smoking gun”

Leave a Comment