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IRS Hit Conservative Org’s Donors With ‘Gift Tax’

From the Wall Street Journal:

Donors to GOP Group Drew IRS Scrutiny

Audits Sought to Impose Gift Tax


At the same time the Internal Revenue Service was targeting tea-party groups, the tax agency took the unusual step of trying to impose gift taxes on donors to a prominent conservative advocacy group formed in 2007 to build support for President George W. Bush’s Iraq troop surge.

The probe of the group, Freedom’s Watch, began in the unit led by Lois Lerner, the IRS official already under scrutiny for her role in the more recent targeting of conservative groups.

Even though ‘gift and estate taxes’ are handled by a different part of the IRS.

While the IRS confirmed the existence of the gift-tax initiative in 2011, the identity of the group involved—as well as the affiliation of individual donors—remained a mystery.

Why? Is there no paper trail? Were they all using secret email accounts?

Former officials of Freedom’s Watch say they believe all five of the IRS audits involved donors to their group, based on conversations with IRS agents and donors at the time of the audits in 2011.

The IRS declined to comment, citing taxpayer confidentiality.

That’s a laugh. The IRS seems to have no problem releasing the tax records of their political enemies.

The gift-tax probe, after it became public in 2011, prompted an outcry from Congress and was quickly halted…

That is, they only stopped once they were caught. Have we ever heard of any agency in the Obama administration stopping their illegal activity because of their own internal reviews or oversight?

In February 2010, the same month the tea-party targeting started, according to a recent inspector general’s report, Freedom’s Watch was subjected to an IRS audit that focused largely on its political activities, an uncommon but not unprecedented action, election lawyers say. The probe broadened into other areas, including executive compensation.

About a year later, as many as five donors to Freedom’s Watch were subjected to IRS audits of their contributions that sought to impose gift taxes on their donations to the group, according to lawyers and former officials of Freedom’s Watch.

Tax experts say that effort was highly unusual. The IRS generally hadn’t sought to impose the gift tax on donations to tax-exempt groups such as Freedom’s Watch in at least 20 years, perhaps longer, following an unfavorable court ruling and changes in the law by Congress, according to lawyers and IRS documents.

The IRS action "was kind of like a nuclear bomb going off," said Rob Kelner, who heads the election-law practice at Covington & Burling LLP.

That was the whole idea. To intimidate other conservative donors.

"Although we always knew this was a possibility, it disrupted that long-standing understanding among election lawyers that this was an area where the IRS wasn’t likely to go." …

Unless they were told to go into that area.

"It’s perfectly plain to see that Freedom’s Watch’s donors were singled out…in a complete break with decades of precedent and IRS procedure," said Ari Fleischer, a board member of the group and former White House press secretary for Mr. Bush, in an interview.

In response to questions in 2011, the IRS confirmed it had sent the gift-tax audit letters to five taxpayers. The five letters resulted from "a single matter," then-IRS commissioner Douglas Shulman said in May 2011. In July, in response to the outcry on Capitol Hill, the IRS announced it was ending the audits and wouldn’t conduct any more until after a review.

Mr. Shulman and Ms. Lerner didn’t respond to requests for comment.

Did they plead the fifth?

The lawyer who represents Freedom’s Watch, Jeff Altman, said his informal conversations with IRS agents indicated the five people who got the audit letters were all donors to Freedom’s Watch.

Private conversations with at least three of Freedom’s Watch donors or their attorneys confirmed they received the letters, he said.

The audit of Freedom’s Watch was conducted by Ms. Lerner’s exempt-organizations unit. The gift-tax audits were conducted by workers in the estate and gift-tax unit, housed in a separate division of the sprawling IRS…

Ms. Lerner sure was a busy little bee. No wonder she got so many bonuses.

This article was posted by Steve on Wednesday, June 5th, 2013. Comments are currently closed.

One Response to “IRS Hit Conservative Org’s Donors With ‘Gift Tax’”

  1. GetBackJack says:

    The global war on terrorism is the Democrats attempting to carpet bomb and scorch the earth clean of any and all vestiges of the America we know and love

    Their shock troops are not just from Ivy Leagues and Hollywood, but they are in league with Al-Qaeda and every stray Islamofascist gun toting brigade of blood thirsty head choppers.

    Which is to say also every USA Department and Bureaucracy … against ordinary citizens of America

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