The Obama Administration Has Been Abusing the IRS for Years

By PETER ROFF

The alleged abuse by the Obama Administration of the United States Internal Revenue Service goes back much farther than the current inquiry into whether conservative political groups seeking non-profit status had their applications deliberately "slow walked" through the process on the order of White House personnel.

Back in 2010, when the president and his senior advisers were busy "demonizing" the nascent Tea Party Movement and its supporters, Austan Goolsbee, who was then chairman of Obama's Council of Economic Advisers, made a comment during a conference call with reporters that implied he had taken a peek at the confidential tax returns belonging to Koch Industries, the industrial giant that is one of the nation's largest privately held companies and is a favorite bête noire of the American left.

Goolsbee's seemingly offhand reference to Koch Industries' tax returns during the call caught the attention of several influential members of Congress including Sen. Chuck Grassley, the top Republican on the Senate committee that has jurisdiction over the IRS. Along with six of his colleagues, the senior senator from Iowa asked the Treasury Department's inspector general for tax administration to look into the matter.

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An offense of this type is a serious breach of privacy, with potential criminal and financial penalties attached. Tax returns are confidential documents. It's been that way at least since the administration of President Calvin Coolidge. Political appointees are not supposed to be able to see them, especially for the purpose of gathering useful intelligence that can be used to attack the reputations of a president's political opponents. One would expect that violations of this type, especially ones that had garnered the attention of senior lawmakers on Capitol Hill would be handled quickly, efficiently and thoroughly.

Unfortunately, no one really knows what happened because, as Eliana Johnson reported earlier this week for National Review Online, the investigation concluded two years ago with no charges filed but no one outside the U.S. Department of the Treasury has apparently been allowed to see the report.

As Johnson reported, Grassley – who asked for the investigation – has not been allowed to see it. Neither has anyone from Koch Industries, who have asked to see it but have been given the traditional bureaucratic runaround, with the Treasury Department telling the company to talk to the IRS and the IRS telling the company to talk to the Treasury Department.

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The rules that are supposed to guarantee the information on tax returns remains confidential are also used to keep reports on alleged invasions of privacy secret. Unless a referral seeking prosecution is made to the U.S. Department of Justice, at which point the report would become public.

"If Justice declines to prosecute," Johnson wrote, "all the relevant information remains under lock and key. Critics worry that a highly politicized Justice Department is unlikely to take up cases that have the potential to damage the Obama administration."

What it boils down to is this: The victim of an alleged crime is not allowed to see the report that determines whether or not a crime was committed. Even worse, as Johnson explained in her story, "The results of investigations conducted by the Treasury Department inspector general are considered the confidential tax information of the alleged perpetrator." Meaning the person who may have committed the crime receives the very protections they themselves have been accused of violating.

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It has long been documented that presidents and political appointees have used the IRS to make trouble for their political opponents or to score political points, as was the case regarding former U.S Treasury Secretary Andrew Mellon and Philadelphia newspaper publisher Moses Annenberg – whom the Roosevelt Administration hounded into prison and some say an early grave because of his opposition to the New Deal and other FDR initiatives. Lyndon Johnson and Richard Nixon both used the tax agency as a weapon against those seeking to thwart their initiatives and threaten their rule. Even though Goolsbee still maintains he simply misspoke when he said, "We have a series of entities that do not pay corporate income tax… (S)ome of which are really giant firms – you know, Koch Industries, I think, is one" it seems an awfully well-informed mistake to make.

Raiding for political purposes and sharing information contained in individual or corporate tax returns is a frightening abuse of power; perhaps the most serious that can occur outside the government's war making ability. The Obama administration now stands accused of doing just that. Congress should act to change the law that keeps reports like this secret, leaving it to the discretion of the potential victim, rather than the Treasury Department or the IRS, to decide whether or not anything should be released.