Lawmakers' complaints trigger IRS audits

Published Nov. 16, 1999|Updated Sept. 30, 2005

Referrals from members of Congress and the White House have led to audits of their tax-exempt political opponents, documents show.

Members of Congress and the White House have triggered audits of hundreds of tax-exempt groups this decade by lodging complaints with the Internal Revenue Service against their political foes.

The referrals range from citizen letters and newspaper articles to personal demands for investigations, according to documents reviewed by the Associated Press.

The White House once referred a constituent complaint about a group that had suggested presidential lawyer Vincent Foster had been murdered. Democratic lawmakers sought investigations of conservatives ranging from the Heritage Foundation to the Rev. Jerry Falwell.

And the Republican chairman of the House committee that writes tax laws sought an audit of a Buddhist temple in California after it was host for a Democratic fundraiser featuring Vice President Al Gore.

"It is my assumption that the Internal Revenue Service has commenced, or will soon commence, an investigation into these activities," House Ways and Means Committee Chairman Bill Archer wrote Oct. 18, 1996, three weeks before the presidential election.

The IRS says less than 1 percent of the 6,000 to 10,000 audits of tax-exempt groups each year originate with complaints from lawmakers or the White House. The White House forwards about 1,300 constituent letters each year to the IRS ranging from complaints of wrongdoing to obscure tax questions.

Agency officials say audit decisions are based solely on evidence of wrongdoing, not on the political stature of those making the requests or any positions taken by the group involved. Federal law generally prohibits tax-exempt groups from advocating the election or defeat of political candidates.

"We read our mail and deal with the facts appropriately. To ignore the mail is a dereliction of responsibility," said Marcus Owens, the IRS official who oversees tax-exempt organizations.

Owens said any auditors making a politically motivated decision "would lose their jobs and perhaps would wind up with deeper legal problems."

One lawmaker who sought an audit contends politics does play a role.

Former Rep. David Skaggs, D-Colo., said he referred two conservative organizations to the IRS in 1996 to achieve some "evenhandedness" after House Republicans began a "very concerted assault" on liberal tax-exempt groups.

Skaggs referred the Heritage Foundation and Citizens Against Government Waste to the tax agency based on a newspaper report. It said the groups had sent out a mailing signed by GOP presidential candidate Bob Dole and then had shared the list of respondents with Dole's campaign.

Within two months of Skaggs' request, both groups found themselves undergoing costly audits that continue today.

"I believed then and I believe now that these were serious possible violations and the appropriate step was to ask the people with the expertise," Skaggs said. "But it would be incredible to suggest, and I won't, that there was not a political dimension to these things. Of course there is."

Critics say the system is ripe for abuse by politicians eager to sic the IRS on enemies. The Landmark Legal Foundation, a conservative legal group, sued the IRS to gain access to requests for audits, and found that requests from Congress and the White House go up in election years.

"The documents show there's a systematic effort by Congress and the White House to intimidate and silence organizations with whom they disagree," said Mark Levin, head of Landmark.

The documents also show IRS officials highlight the origins of complaints.

The IRS computer tracking system in Washington clearly denotes the name of the politician who referred the matter. And the original letter from the White House or lawmaker is forwarded to the case agent.

Lawmakers' requests are stamped "expedite" to remind IRS officials they must reply in writing within 15 days. A few requests reviewed by AP were marked with notations such as "hot politically" or "sensitive."

A quarter-century ago, President Richard Nixon tried unsuccessfully to force the IRS to "go after our enemies and not go after our friends."

Today, the practice is more subtle. Members of Congress or the White House usually attach to their referral a letter from a like-minded constituent or a news article alleging wrongdoing.

The Clinton White House once referred a conservative organization that relentlessly pursued the claim that Foster had not committed suicide, as ruled by authorities, but was murdered.

Presidential aides also forwarded a complaint faxed to President Clinton from a supporter in Beverly Hills, Calif., that the Western Journalism Center was engaged in a "vicious media campaign to hurt you."

The fax didn't allege any specific tax violations. It simply noted the center was tax-exempt and an "ad needs investigation." The IRS audited the group, but eventually upheld its tax-exempt status.

Treasury Department investigators reviewed the audit and concluded it was proper. They said the White House referral was one of several constituent complaints it routinely sent over.

"Citizens often write to the president about issues under the jurisdiction of different federal agencies. We have a choice. We could forward their letters or we can throw them out. We chose to forward them," White House spokesman James Kennedy said. He said all letters are referred regardless of political orientation.

When Archer contacted the IRS about the Buddhist temple, he made no secret about his desire for an audit. "I would certainly recommend such an investigation," he wrote in a letter that demanded he be kept apprised of IRS action.

More than a year later, the Hsi Lai Temple near Los Angeles was named an unindicted co-conspirator in the indictment of a Democratic fundraiser.

Not all requests result in audits.

Rep. Henry Waxman, D-Calif., an ally of the president, referred Falwell, an outspoken critic of Clinton, for investigation based on a constituent complaint in May 1993 that "religious broadcasters are using their tax-exempt status for political purposes."

Waxman urged the agency to keep his constituent's "concerns in mind."

The congressman got a speedy reply, but the IRS didn't audit Falwell. Five of his organizations had been audited two years earlier.

IRS officials insist they don't buckle under pressure.

"Archer can use all the language he wants to order, demand, cajole and persuade. But a decision is only made on the facts, and I would expect my commissioner to back me up," Owens said.

But most complaints from lawmakers and the White House end up getting referred to IRS field offices, according to a court filing by Thomas J. Miller, a projects chief in Owens' division.

"The only information items generally not referred . . . are those that are either unintelligible or that allege no wrongdoing, or that are more in the nature of a generic question regarding the tax laws," Miller told the court.

For those audited, the experience can be costly.

John Von Kannon, vice president and treasurer of the Heritage Foundation, said the audit has cost his organization more than $100,000. He says the group doesn't think it did anything wrong.

"We are a conservative organization and there will be some people who don't like us," Von Kannon said. "That's life."