Judicial Watch: Donor Lists Were Used by IRS to Target Audits

Judicial Watch says it has obtained documents that show Internal Revenue Service employees used donor lists from conservative non-profit groups to target people for audits.

The group obtained the documents in a Freedom of Information Act request as part of a lawsuit against the IRS.

The records show how the U.S. Chamber of Commerce was targeted for possible "high scrutiny," Judicial Watch said.

"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 Judicial Watch President Tom Fitton.

"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," he 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 reelection."

In a September 28, 2010 letter, then-Democrat Senate Finance Committee Chairman Max Baucus, a Montana Democrat, wrote to then-IRS Commissioner Douglas Shulman, "I request that you and your agency survey major 501(c)(4), (c)(5) and (c)(6) organizations."

Shulman wrote back on February 17, 2011, "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."

After receiveing Baucus' letter, the IRS considered levying a 35 percent gift tax on contributions to 501(c)(4) groups that exceeded $13,000. But that rule had not been enforced since 1982 when the Supreme Court ruled that it violated free speech rights.

Still, five members of an unnamed organization were audited in February 2011, Judicial Watch says.

GOP operative Karl Rove's Crossroads GPS was a specific target, internal emails show.

Another email shows the Chamber targeted: "The U.S. Chamber of Commerce is a 501(c)(6) organization and may find itself under high scrutiny. One can only hope."

When the media became interested in the story, one official admits it "is a biggy."

Then-Director of the Exempt Organizations Lois Lerner says in an email that she supports the gift tax audits, but that "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.

The IRS backed off in July 2011, when Acting IRS Commissioner Steven Miller said that audits of taxpayers "relating to the application of gift taxes" to 501(c)(4) organizations "should be closed."

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