IRS Sought to Impose Gift Tax on Freedom Watch Donations

Carol Platt Liebau
Posted: Jun 01, 2013 12:56 PM

As this post from yesterday pointed out, it's hardly news to those who read the IRS IG report that Americans were targeted by the IRS -- not just based on membership in the "Tea Party" or "9/12" -- but based on their political sympathies generally.

Last night, the Wall Street Journal reported on another example of this phenomenon.  

Apparently, an IRS probe of Freedom Watch began in (surprise!) the unit headed by Lois Lerner (still enjoying a full-pay and full-benefits vacation, courtesy of the taxpayers she harassed).  According to the WSJ:

In February 2010, the same month the tea-party targeting started, according to a recent inspector general's report, Freedom's Watch was subjected to an IRS audit that focused largely on its political activities, an uncommon but not unprecedented action, election lawyers say. The probe broadened into other areas, including executive compensation.

About a year later, as many as five donors to Freedom's Watch were subjected to IRS audits of their contributions that sought to impose gift taxes on their donations to the group, according to lawyers and former officials of Freedom's Watch.

Tax experts say that effort was highly unusual. The IRS generally hadn't sought to impose the gift tax on donations to tax-exempt groups such as Freedom's Watch in at least 20 years, perhaps longer, following an unfavorable court ruling and changes in the law by Congress, according to lawyers and IRS documents.

And again, you have to wonder: Why does Lois Lerner still have a job?