New IRS Scandal Hearings Reveal 32,000 More Emails, Possible Criminal Activity

In new Hearings of the Committee on Oversight & Government Reform on February 26, 2014, J. Russell George, the Treasury Inspector General, said he is investigating possible criminal activity at the IRS. The hearings also revealed the fact that investigators have recovered another 32,000 emails relate to Lois Lerner. However, how many of them are duplicates of those previously recovered is not yet clear.

But in what was the most disturbing revelation, House Member attendees were told that the IRS had not even asked for the backup tapes when the ‘hard drive crash’ excuse was first used. That contradicted the prior testimony of IRS Commissioner John Koskinen. He had testified to the effect that recovery efforts had been thorough, and that the tapes couldn’t be accessed.

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It now appears that no one may have asked. Rep. John Mica, R-Fla., said, “It looks like we’ve been lied to, or at least misled.” Treasury Deputy Inspector General Timothy Camus said, “We recovered quite a number of emails, but until we compare those to what’s already been produced we don’t know if they’re new emails.” Camus said it took investigators a mere two weeks to locate the computer tapes, and about four months to find Ms. Lerner’s emails on the tapes.

Several Oversight Committee Members questioned how diligent the IRS had been, given how quickly the investigators now were able to find them. Yet an IRS statement repeats the tax agency’s full cooperation. It has not been inexpensive. The IRS claims to have spent $20 million responding to congressional inquiries, producing documents and providing agency officials to testify at hearings.

In March 2012, former IRS Commissioner Doug Shulman testified there was “absolutely no targeting” by the IRS of conservative and/or Tea Party organizations. On November 9, 2012, Mr. Shulman stepped down as Commissioner, replaced by Steven Miller. On May 10, 2013, during a bar meeting, IRS Exempt Organization Chief Lois Lerner admitted targeting, calling it “absolutely incorrect, insensitive, and inappropriate.”

Four days later, on May 14, 2013, the Inspector General issued a report confirming targeting. Attorney General Eric Holder announced an FBI investigation. On May 15, 2013, Acting IRS Commissioner Steven Miller resigned. President Obama named Daniel Werfel Acting Commissioner. Mr. Miller and Inspector General J. Russell George testified to the House Ways and Means Committee. On May 22, 2013, Ms. Lerner professed her innocence, then took the Fifth. Next day, she was placed on administrative leave.

On June 12, 2013, the IRS suspended BOLO lists for Tea Party names. On June 20, 2013, the IRS paid $70 million in bonuses. Ms. Lerner receives $42,000, part of her total of $129,300. Former Commissioner Miller received $100,000. On June 24, 2013, the IRS admitted that “inappropriate criteria” were used for tax-exempt status. Next day, Democrats claimed that progressives were targeted too.

On September 24, 2013, Ms. Lerner’s retirement was announced, with full pension. On February 3, 2014, President Obama told Fox News there was “not a smidgen of corruption” at the IRS. On March 11, 2014, the Committee on House Oversight and Reform issued a report on Lois Lerner. On April 7, 2014, IRS Commissioner John Koskinen confirmed there were six investigations: four by Congressional committees, one by the DOJ, one by the TIGTA. Over 250 IRS employees spend 100,000 hours, costing taxpayers at least $14 million.

On April 8, 2014, the Committee on House Oversight and Government Reform said it would pursue contempt charges against Ms. Lerner. On May 7, 2014, the House of Representatives held Ms. Lerner in contempt of Congress. On June 13, 2014 (Friday the 13th!), the IRS first said it lost Ms. Lerner’s emails from 2009 to 2011. The IRS said hard drives and backups were destroyed, for 6 other IRS employees’ too. The IRS spent $10 million trying to recover them, but they were gone.

On September 22, 2014, Ms. Lerner broke her silence to Politico, saying that she is the victim. In November-December 2014, the Inspector General recovered 30,000 backed up Lerner emails. Now, 32,000 additional emails have been recovered. It will be fascinating to see what they contain.

For alerts to future tax articles, follow me on Forbes. You can reach me at Wood@WoodLLP.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.

via The Tax Lawyer http://ift.tt/1vEYh61

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