IRS audited conservative donors, paperwork shows

Former IRS tax-exempt chief Lois Lerner has refused to testify about targeting conservative groups

Not only did the Internal Revenue Service obstruct the tax-exempt status applications of conservative and tea-party organizations during the 2012 election campaign, new documents obtained through a lawsuit reveal the agency also audited the non-profits' donors.

The Washington watchdog Judicial Watch says the paperwork shows "the IRS used donor lists to tax-exempt organizations to target those donors for audits."

The organization obtained the records through a Freedom of Information Act lawsuit, claiming individuals were selected for audits after they appeared on donors lists for tea-party groups and other non-profits.

"These documents that we had to force out of the IRS prove that the agency used donor lists to audit supporters of organizations engaged in First Amendment-protected lawful political speech," said Tom Fitton, president of the group. "And the snarky comments about the U.S. Chamber of Commerce and the obsession with Karl Rove's Crossroads GPS show that the IRS was targeting critics of the Obama administration.

Fitton said President Obama "may want to continue to lie about his IRS scandal."

"These documents tell the truth – his IRS hated conservatives and was willing to illegally tax and audit citizens to shut down opposition to Barack Obama's policies and re-election," Fitton said.

The documents have been posted online.

Judicial Watch said they include a Sept. 28, 2010, letter from then-Senate Finance Committee Chairman Sen. Max Baucus, D-Mont., telling then-IRS Commissioner Douglas Shulman, "I request that you and your agency survey major 501(c)(4), (c)(5) and (c)(6) organizations."

"The case for personal freedom" is made in Judge Andrew Napolitano's "It Is Dangerous To Be Right When the Government Is Wrong."

In a reply, Shulman confirms, "In the work plan of the Exempt Organizations Division, we announced that beginning in FY2011, we are increasing our focus on section 501(c)(4), (5) and (6) organizations."

It was after Baucus' letter was sent that the IRS considered auditing donors to various organizations, "alleging that a 35 percent gift tax would be due on donations in excess of $13,000," Judicial Watch reported.

"The documents show that the IRS wanted to cross-check donor lists from 501(c)(4) organizations against gift tax filings and commence audits against taxpayers based on this information," the report said.

But Judicial Watch noted the issue of the "gift tax" was dead even at the time, since the Supreme Court had ruled they violated the First Amendment – and even the IRS hadn't done any such enforcement since 1982.

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

"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,'" said Judicial Watch.

The paperwork also shows then-Director of the Exempt Organizations Lois Lerner weighed in with an email that confirmed she supported the gift-tax audits. She said "the courts have said specifically that contributions to 527 political organizations are not subject to the gift tax – nothing that I'm aware of that about contributions to organizations that are not political organizations."

Her statement "contradicts the IRS statement to the media at the time that audits were not part of a 'broader effort looking at donations 501(c)(4)s,'" Judicial Watch said.

Judicial Watch has filed multiple complaints seeking information about an IRS strategy, possibly coordinated with the White House, to attack those who were critical of Obama's practices and policies heading into the 2012 election.

"We now know that the IRS targeted not only right-leaning applicants, but also right-leaning groups that were already operating as 501(c)(4)s. At Washington, D.C.’s direction, dozens of groups operating as 501(c)(4)s were flagged for IRS surveillance, including monitoring of the groups’ activities, websites and any other publicly available information. Of these groups, 83 percent were right-leaning. And of the groups the IRS selected for audit, 100 percent were right-leaning," Judicial Watch's report said.

WND reported Obama recently defended the IRS, questioning whether the tea-party groups were ever targeted. He said it wasn't his fault.

Judicial Watch earlier confirmed documents had been released that outlined the Washington strategy to prosecute conservatives who publicly opposed Obama's policies.

Fitton said then, "The FBI and Justice Department worked with [IRS official] Lois Lerner and the IRS to concoct some reason to put President Obama's opponents in jail before his re-election."

Fitton said the "abuse resulted in the FBI's illegally obtaining confidential taxpayer information."

The IRS scandal has been in the headlines for several years, since it was revealed the agency selectively impeded the applications for tax-exempt status of conservative, Christian and tea-party organizations.

Among the ploys was a demand to reveal the content of prayers and to curb statements on moral issues.

The scandal has been the subject of multiple congressional hearings, including two appearances by Lerner, who ran the tax-exempt division and twice has refused to answer Congress' questions.

At one point, Lerner's political bias was exposed in an internal email in which she called conservatives "a--holes" and "crazies."

"The case for personal freedom" is made in Judge Andrew Napolitano's "It Is Dangerous To Be Right When the Government Is Wrong."