IRS smoking gun

Robert Novak

7/29/2002 12:00:00 AM - Robert Novak
WASHINGTON -- The mystery surrounding Internal Revenue Service (IRS) tax audits against critics of President Bill Clinton during his administration has been cracked. A smoking gun has just been released by the IRS itself. The unmistakable evidence is that the supposedly non-political tax agency responds to complaints by prominent politicians. The IRS, perhaps unknowingly, incriminated itself July 8 with a 1,500-page document dump answering four years of freedom-of-information requests by the watchdog organization Judicial Watch. The material shows that the IRS audit of Judicial Watch was preceded by written complaints from the White House and prominent Democratic members of Congress. Furthermore, existence of supposedly secret audits was unsealed thanks to a Justice Department tax litigator who is, implausibly, active in local Democratic politics. Republicans in Congress display little curiosity about IRS harassment of conservative organizations. Nor have Treasury Secretary Paul O'Neill or Attorney General John Ashcroft pursued abuses. Judicial Watch's lawsuits have made the organization as obnoxious to the Bush administration as to its predecessor. Nevertheless, the White House is concerned about one abuse close to the political bone: IRS disclosure of confidential tax information about the Republican candidate for governor of California. Until the July 8 document dump, Judicial Watch got little satisfaction from the IRS in fighting the costly, time-consuming audits. Among the 1,500 pages was found this Aug. 14, 1998, e-mail to President Clinton (with the sender's name blackened). "I have received solicitation for funds and a questionnaire from Larry Klayman, of Judicial Watch. They have targeted you and the Vice President. My question is how can this obviously bipartisan organization be classified as tax exempt . . . I think you and your wife have done a great job in spite of the partisan attacks against both of you." According to the IRS documents, the Clinton fan's complaint was received by the IRS from the White House on Sept. 14, 1998, and dispatched to Commissioner Charles Rossotti's office. That same day, the file indicates, a telephone call in connection with this matter was made to an unnamed person (name blacked out). Just two weeks later, Judicial Watch received its first notice of an audit. While Judicial Watch received continued audit notices, the IRS was pressured by prominent Democrats. Rep. Charles Rangel of New York, top Democrat on the tax-writing House Ways and Means Committee, on Feb. 2, 1999, wrote questioning whether the watchdog group was entitled to a tax exemption. Rangel's letter noted complaints from Rep. Martin Frost of Texas, a member of the Democratic leadership who had received a constituent complaint about Judicial Watch solicitations. Marcus Owens, head of the IRS's Exempt Organizations Division, responded to both Rangel and Frost. "We have forwarded the information you provided to the key district with examination jurisdiction over these organizations," said Owens. Translated from bureaucratese: an IRS probe was underway. As audit notices went out, complaints came in from other Democrats -- including Sens. Richard Bryan of Nevada and Tom Harkin of Iowa and Rep. Jim Moran of Virginia. Judicial Watch's fight against a political audit was unsealed by the federal district court in Baltimore, with proceedings sent to the Tax Notes Today publication. A filing in the court last Jan. 7 indicates the documents were released by lawyers from the Justice Department's Tax Division. The government's chief litigator against Judicial Watch has been a remarkable Washington bureaucrat named Stuart Gibson. While serving as a civil service tax lawyer, Gibson also is a liberal activist in suburban Fairfax County, Va., where he was elected to the school board with Democratic backing. He was the lead litigator in the public disclosure of tax shelters by individual taxpayers -- including Bill Simon, the Republican nominee for governor of California. The Bush White House has a great deal more concern for Simon than Klayman particularly since Judicial Watch filed suit against Vice President Dick Cheney recently. The broader question is political motivation behind the IRS audits. There is now evidence that the audit of at least one Clinton "enemy" was triggered by the White House. The background of other such audits might yield other smoking guns, if Congress or the Bush administration were interested enough to investigate.