New IRS Targeting Report: Pressure from the Left Led the IRS and DOJ to Restrict Freedom of Speech

New documents show Justice Dept Discussed Criminal Prosecution for Political Groups

WASHINGTON – House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., today released the report, How Politics Led the IRS to Target Conservative Tax-Exempt Applicants for their Political Beliefs, detailing how the President’s and congressional Democrats’ political rhetoric throughout 2010 led to the IRS targeting.  On a weekly if not daily basis, the President and his allies spoke out against Citizens United and nonprofits engaged in political speech favorable to conservatives.  The report chronicles these statements and shows how the IRS recognized and acted upon this pressure.

“Today’s report clearly outlines the causal relationship between Democrats’ rhetoric calling for action against Citizens United and the actions taken by the IRS and the Justice Department to target conservatives for their political beliefs,” said Chairman Issa. “Certainly, the President and congressional Democrats have an absolute right to express policy concerns and advocate for policy changes.  But the causal relationship between this rhetoric and the IRS targeting is clear.  The President declared repeatedly that conservative groups ‘posing’ as nonprofits with ‘benign-sounding’ names were ‘a threat to our democracy.’  The IRS listened and, in turn, it subjected conservative groups to systematic scrutiny and delay.”

Key Findings:

• The President’s political rhetoric in opposition to the Supreme Court’s Citizens United decision and conservative nonprofits engaged in political speech led to the Internal Revenue Service’s targeting of tax-exempt applicants.

• Senior White House officials, Democratic Members of Congress, and other left-wing political figures and commentators echoed the President’s rhetoric.  The Democrat-led Congress convened hearings to examine Citizens United and considered legislation to require disclosure of contributors to nonprofits engaged in political speech.  The White House and left-leaning commentators supported these measures.

• Democratic Members of Congress, the Democratic Congressional Campaign Committee, and liberal advocacy organizations urged the IRS to investigate conservative nonprofits engaged in political speech.

• The IRS internalized the political pressure urging the tax agency to take action on nonprofit political speech.  In response to a news article about the Democratic Congressional Campaign Committee’s complaint against Americans for Prosperity, Lois Lerner wrote to her boss: “We won’t be able to stay out of this – we need a plan!”  Lerner later initiated a project to examine 501(c)(4) political speech in response to an article in a tax-law journal.

• As Democratic Members of Congress urged the IRS to investigate a conservative group, Crossroads GPS, Lerner asked a subordinate to look at the group.  Echoing themes from the President’s rhetorical campaign and acknowledging the media attention on nonprofit political speech, Lerner wrote: “The organization at issue is Crossroads GPS, which is on the top of the list of c4 spenders in the last two elections.  It is in the news regularly as an organization that is not really a c4, rather it is only doing political activity – taking in money from large contributors who wish to remain anonymous and funneling it into tight electoral races.”

• The Justice Department arranged a meeting with Lerner on October 8, 2010, after Jack Smith, Chief of the Department’s Public Integrity Section, read an article in the New York Times about the influence of nonprofits in the midterm election.  The IRS sent 21 disks containing 1.1 million pages of nonprofit tax-return information – including confidential taxpayer information – to the FBI in advance of this meeting.  The Justice Department and the FBI have continued a “dialogue” about potential criminal investigations of nonprofits engaged in political speech.

• The IRS enjoyed a close and mutually beneficial relationship with congressional Democrats.  The IRS received tips from Democratic sources about upcoming actions concerning nonprofit political speech, and the IRS even assisted Senator Carl Levin (D-MI) in preparing letters to the agency criticizing nonprofit political speech.

Read the report here, and the appendix here.

Last week, the Oversight Committee wrote letters to the DOJ and IRS about the transmittal of a database of tax exempt organizations sent to FBI weeks before 2010 midterm elections.

In April, the Committee released the report, Debunking the Myth that the IRS Targeted Progressives: How the IRS and Congressional Democrats Misled America about Disparate Treatment, available here.