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Can We Trust the Justice Department in the New IRS Scandal?

Posted By Andrew Kloster On July 18, 2013 @ 10:30 am In Legal | Comments Disabled

Newscom [1]

Newscom

The Washington Times is reporting that the U.S. Department of the Treasury Inspector General (IG) for Tax Administration has admitted privately to Senator Chuck Grassley [2] (R–IA) that the IRS “targeted for audit candidates for public office.” Fresh on the heels of the May 14 IG report [3] that alerted the American public to the targeting of Tea Party groups by the IRS, this new information now has potential criminal implications.

The IG reported to Senator Grassley that a review “turned up four cases since 2006 in which unidentified government officials took part in ‘unauthorized access or disclosure of tax records of political donors or candidates,’ including one case…described as ‘willful.’” That last case was referred to the Department of Justice (DOJ), which “declined prosecution,” according to the IG [4].

Unlike the difficult-to-prove allegations of bias in deciding to audit Tea Party groups, this new admission by the IG is relatively easy to prove. It involves facts—the “unauthorized access or disclosure of tax records”—that themselves are evidence of impropriety. If there has been unauthorized access or disclosure of tax records, someone has broken the law, and someone is a victim.

The IRS Disclosure & Privacy Law Reference Guide [5] provides good information on some of the laws that could apply to the actions unearthed by the IG:

  • Unauthorized inspection or disclosure by an IRS employee can lead to civil damages pursuant to 26 U.S.C. § 7431, which specifically makes the money damages available to victims where any U.S. employee, “knowingly, or by reason of negligence, inspects or discloses any return…in [a manner not authorized by the Internal Revenue Code].”
  • In addition to civil penalties against the government, 26 U.S.C. § 7213 provides for felony criminal liability and mandatory firing of any employee who willfully discloses income tax returns in a manner not authorized by the Internal Revenue Code. This section provides for imprisonment up to five years and/or a fine of up to $250,000 (under the Alternative Fines Act [6], 18 U.S.C. § 3571).
  • Unauthorized access, or “browsing,” is also subject to criminal liability and mandatory firing pursuant to 26 U.S.C. § 7213A. The penalty is up to one year in prison and/or a fine of up to $100,000.
  • The Economic Espionage Act of 1996, codified at 18 U.S.C. § 1030(a)(2), penalizes intentional, unauthorized computer access of U.S. agency information, including tax return information. The penalty is variable, but it can be up to 10 years in prison and/or a fine of $250,000 for a first offense.

Finally, as in any situation where a federal employee fails to apply the law even-handedly, there are potential constitutional and civil rights claims that can be made. To the extent that such illegal disclosures were politically motivated, they are particularly serious, because they threaten the legitimacy of our republic.

However, the IG has yet to disclose (1) who exactly the victims are, (2) who exactly the perpetrators are, (3) if any “disclosures” were made, or (4) to whom any disclosures were made (remember the National Organization for Marriage filed suit this May against the IRS [7], alleging that the IRS leaked its donor list to a pro-“gay marriage” group). If in fact there were victims, the government has an obligation to notify these victims: Obviously, nobody can sue the government for money damages until they know they were targeted by the IRS in one of these cases.

Whatever the legal theory, we do know that the DOJ was informed by the Treasury Department about this misconduct and declined to prosecute [4]: Senator Grassley has asked the Attorney General to explain this decision [8]. Certainly, the decision of a prosecutor not to prosecute is very difficult to second-guess. However, given the pattern of behavior of this DOJ, it is a difficult decision to trust.


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URL to article: http://blog.heritage.org/2013/07/18/can-we-trust-the-justice-department-in-the-new-irs-scandal/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/Justice130718.jpg

[2] admitted privately to Senator Chuck Grassley: http://www.washingtontimes.com/news/2013/jul/15/feds-admit-improper-scrutiny-candidate-donor-tax-r/

[3] the May 14 IG report: http://www.treasury.gov/tigta/auditreports/2013reports/201310053fr.pdf

[4] according to the IG: http://www.grassley.senate.gov/about/upload/Response-to-Sen-Grassley-7-3-13.pdf

[5] Disclosure & Privacy Law Reference Guide: http://www.irs.gov/pub/irs-pdf/p4639.pdf

[6] Alternative Fines Act: http://www.justice.gov/criminal/fraud/fcpa/docs/response2-appx-m.pdf

[7] filed suit this May against the IRS: http://www.politico.com/story/2013/05/nom-to-sue-irs-in-leaking-case-91380.html

[8] has asked the Attorney General to explain this decision: http://www.grassley.senate.gov/about/upload/2013-07-12-CEG-to-DOJ-IRS-Targeting.pdf

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