The Spectacle Blog

IRS Released Taxpayer Information to FBI

By on 6.11.14 | 12:07PM

It’s not a good sign when a federal agency violates its own regulations. Yet the IRS has done it again. Violating tax law, the Internal Revenue Service sent an entire database of confidential taxpayer information to the Federal Bureau of Investigation in October 2010.

Just a few weeks before midterm elections, and a few weeks before Lois Lerner met with officials from the Department of Justice to discuss prosecuting certain nonprofit groups, the IRS transmitted a significant amount of information on 501(c)(4) social welfare groups. Emails show Lerner asking Robert Pilger, director of the Justice Department’s Election Crimes branch, about the preferred format for the data to be sent to the FBI.

When first revealed, the data was said to be public and taken from the groups’ 990 forms. It turns out a lot of confidential taxpayer information was also included, information protected by federal law.

Here’s the conclusion drawn by the House Oversight Committee:

This revelation that the IRS sent 1.1 million pages of nonprofit tax-return data — including confidential taxpayer information — to the FBI confirms suspicions that the IRS worked with the Justice Department to facilitate the potential investigation of nonprofit groups engaged in lawful political speech.

Committee chairman Darrell Issa and subcommittee chairman Jim Jordan wrote a letter to the current IRS commissioner, John Koskinen, requesting more information about the preparation of the data immediately. The letter expressed frustration at the continued withholding of relevant information by the DoJ and the IRS. It more pointedly took Koskinen to task for not producing the material a year ago, despite a request from the committee followed by two subpoenas.

The committee interviewed Pilger’s boss, Chief of the Public Integrity Section, about the disks the data was transmitted on. Jack Smith had little to say about them. He didn’t know about the information before the committee uncovered it, and his lawyer advised him not to answer questions about what he had since learned.

It seems the desire to crack down on groups with certain political orientations was motivated by angst over the Citizens United decision removing limits on political giving from nonprofits and labor unions. Even though they knew the laws were no longer in their favor, Lerner has said the agency felt pressure to “fix the problem” they perceived as a result of the ruling.

The IRS also employed the media to whip up hysteria over the ruling. Lerner and Sarah Hall Ingram, two senior officials, helped the New York Times prepare an article about 501(c)(4) groups engaged in political speech. An email from Ingram celebrated that “the ‘secret donor’ theme will continue.”

And the IRS got what they wanted. The day the article was published, Jack Smith of the DOJ called to set up a meeting to discuss what could be done. An email to his staff says he wanted to look into charging such groups with “conspiracy to violate laws of the USA.”

As Issa and Jordan’s letter summarizes:

The IRS apparently considered political speech by nonprofit groups to be so troublesome that it illegally assisted federal law-enforcement officials in assembling a massive database of the lawful political speech of thousands of American citizens, weeks before the 2010 midterm elections, using confidential taxpayer information.

It’s becoming more clear that the IRS simply does not care about the privacy of American citizens. Though they knew they didn’t have a legal case, they pursued whatever means were in their power to stifle opinions they didn’t like—even if that meant a flagrant violation of federal law. How much evidence is enough?

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