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Critics Question IRS Initiative Targeting Small Businesses

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Photo Credit: Fox NewsSmall business owners across the country are receiving letters from the IRS questioning if they are reporting all of their cash income, in a new push by the agency some are saying could unnecessarily create fear in the small business community.

The Wall Street Journal reports the initiative is an attempt to respond to what the agency feels is a widespread failure by small businesses to report all their cash sales.

The agency says the letters are not the same as an audit, and it is simply seeking more tax information from the businesses. However, some lawmakers and business owners who received the letters say the initiative is alarming.

“There’s an emotional thing when you get a pretty ominous-looking letter from the IRS, [saying] you might have done some bad things,” small business owner Tom Reese tells the Wall Street Journal. “I really work hard with my accountant to make sure that I not only follow the law, but follow the letter of the law.”

One letter the IRS sent is headlined, “Notification of Possible Income Underreporting.” It notifies the business owner “your gross receipts may be underreported” and says they must complete a form “to explain why the portion of your gross receipts from non-card payments appears unusually low.”

Read more from this story HERE.

IRS Agent: Tax Agency is Still Targeting Tea Party Groups

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Photo Credit: Fibonacci BlueIn a remarkable admission that is likely to rock the Internal Revenue Service again, testimony released Thursday by House Ways and Means Committee Chairman Dave Camp reveals that an agent involved in reviewing tax exempt applications from conservative groups told a committee investigator that the agency is still targeting Tea Party groups, three months after the IRS scandal erupted..

In closed door testimony before the House Ways & Means Committee, the unidentified IRS agent said requests for special tax status from Tea Party groups is being forced into a special “secondary screening” because the agency has yet to come up with new guidance on how to judge the tax status of the groups.

In a transcript from the committee provided to Secrets, a Ways & Means investigator asked: “If you saw — I am asking this currently, if today if a Tea Party case, a group — a case from a Tea Party group came in to your desk, you reviewed the file and there was no evidence of political activity, would you potentially approve that case? Is that something you would do?”

The agent said, “At this point I would send it to secondary screening, political advocacy.”

The committee staffer then said, “So you would treat a Tea Party group as a political advocacy case even if there was no evidence of political activity on the application. Is that right?” The agent admitted, “Based on my current manager’s direction, uh-huh.”

Read more from this story HERE.

Scandal Watch: Issa Expands IRS Targeting Investigation to FEC

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Photo Credit: TownHall Did officials at the Federal Election Commission collude with the IRS to unfairly target and abuse conservative groups? National Review drew attention to this potential angle last week, and now the House Oversight Committee is on the case. A “phony scandal” creeps closer to another federal agency, and CNN has the report:

House Oversight Committee Chairman Darrell Issa demanded Wednesday that the Federal Election Commission turn over records of more than five years of communications with the Internal Revenue Service — a move that significantly expands the California Republican’s ongoing probe of alleged federal targeting of conservative groups. In a letter to FEC Chairman Ellen Weintraub — a Democrat — Issa cited CNN reporting on Monday that raises “the prospect of inappropriate coordination between the IRS and the FEC about tax-exempt entities.” Among other things, Issa asked for records of all communications between the IRS and the FEC dating back to the start of 2008. He also requested records of any FEC discussions relating to tax-exempt applications or organizations since 2008.

[Issa’s] letter came after Don McGahn, the vice chairman of the FEC and a Republican, told CNN that he saw an e-mail from an FEC investigator to Lois Lerner, the former head of the IRS division responsible for reviewing applications from various groups for tax-exempt status. The investigator asked Lerner, herself a former FEC employee, to discuss the status of the American Future Fund, a conservative political advocacy group. McGahn noted that after Lerner was contacted, the IRS sent a questionnaire to the American Future Fund. Lerner, the figure at the center of the congressional investigation into alleged IRS targeting of conservative groups seeking tax-exempt status, invoked her Fifth Amendment right against self-incrimination when called to testify before Issa’s panel in May. “Dealing with Lois Lerner is probably out of the ordinary,” McGahn said, stressing that FEC commissioners had not given their staffers permission to reach out to the IRS on the matter, a step typically required for such inquiries.

Read more from this story HERE.

IRS and FEC Colluding to Attack Conservatives?

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Photo Credit: WNDBy Bob Unruh

House Republicans suspect election officials joined with the Internal Revenue Service in a strategy that curbed the effectiveness of conservative organizations in the 2012 election.

The allegations were revealed in a letter from the House Committee on Oversight and Government Report, which has been holding hearings and seeking evidence about the extent of the IRS targeting of conservative and Christian organizations.

Hundreds of self-described “tea party” and “patriot” organizations had applications for tax-exempt status delayed, in some cases for years. They also were subjected to invasive, improper and probably illegal queries into private matters such as the content of their prayers and how they will vote.

The committee’s letter, dated Wednesday, is addressed to Ellen Weintraub, chairwoman of the Federal Election Commission.

“Documents recently produced by the committee demonstrate that FEC personnel communicated with IRS personnel about tax-exempt groups engaged in political activities,” the letter says. Read more from this story HERE.

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Photo Credit: WNDSurprise! IRS Assault on Churches Started with Holder

By Jack Minor

The seeds of the IRS targeting of conservative groups were planted by Eric Holder in 2001 when as deputy attorney general under President Bill Clinton he convinced incoming Attorney General John Ashcroft to seize the building of a conservative megachurch, says the church’s retired pastor.

“Our church was taken over by the IRS in 2001 based on the recommendations of Deputy Attorney General Eric Holder to incoming Bush Attorney General John Ashcroft,” said Greg Dixon, former pastor of the Indianapolis Baptist Temple.

“The church was the sacrificial lamb to pave the way for the future targeting of conservative groups. We were among the first victims of the IRS’s targeting of conservatives long before the news broke earlier this year,” he said.

Evidence that has arisen in the current IRS scandal shows the agency singled out tea party and other conservative groups for special scrutiny, including asking for the content of members’ prayers and demanding they promise not to protest outside Planned Parenthood clinics or to run for office.

While the IRS initially insisted the targeting was limited to a few rogue employees, evidence now shows orders came from the top to delay the approval of scores of tea party and conservative groups through two election cycles, including the 2012 campaign in which Barack Obama was reelected.

Read more from this story HERE.

Darrell Issa Subpoenas Treasury for More Docs on IRS Targeting (+video)

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Photo Credit: Graem JenningsAfter a tense exchange with Acting IRS Commissioner Danny Werfel Friday, House Oversight and Government Reform Committee Chairman Darrell Issa sent a subpoena to the Treasury Department Friday demanding more documents and accusing the agency’s chief counsel’s office of being “compromised.”

Issa, R-Calif., accused the Internal Revenue Service of dragging its feet in responding to the committee’s demand for documents related to IRS targeting of conservative groups — a charge Werfel denied.

During an Oversight subcommittee hearing, an agitated Issa said the IRS is “slow-rolling us.”

“That’s not true,” Werfel countered.

But Issa persisted, saying he would go over Werfel’s head and ask his boss, Treasury Secretary Jack Lew, to respond to his requests.

“I’ve asked you for information; you’re not forthcoming,” Issa told Werfel. “The office of chief counsel, a politically appointed office, has been compromised.”

Read more from this story HERE.

Obama’s IRS Chief Admits to Congress He Wants to Keep His Healthcare, Doesn’t Want to be Forced into Obamacare (+video)

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At congressional hearing today, the following exchange took place between Rep. Sam Johnson (R-Tx) and the IRS chief, Daniel Werfel:

Congressman Johnson: “Mr. Werfel, last week your employees who are a member of the National Treasury Employee’s Union sent a form letter for union members to send in to ask they be exempt from the exchanges. Why are your employees trying to exempt themselves from the very law that you’re tasked to enforce?”

Commissioner Werfel: “I don’t want to speak for the NTEU, but I’ll offer a perspective as a federal employee myself and a federal employee at the IRS. And that is, we have right now as employees of the government, of the IRS, affordable health care coverage. I think the ACA was designed to provide an option or an alternative for individuals that do not. And all else being equal, I think if you’re an individual who is satisfied with your health care coverage, you’re probably in a better position to stick with that coverage than go through the change of moving into a different environment and going through that process.”

video:

Dishonesty from Obama Admin. Hits New Highs: Lew Denies IRS Targeted Conservatives

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Treasury Secretary Jack Lew said Sunday the Internal Revenue Service exhibited “equal opportunity bad judgment” in the improper targeting of political groups, and there was no evidence of political pressure.

Just days after President Obama accused Washington of focusing attention on “phony scandals,” Lew said on “Fox News Sunday” mistakes were made in the IRS, but there is no evidence the White House or political officials drove the improper targeting.

“There’s no political official who condoned it or authorized it,” he said, adding that the mistakes that were made were “unacceptable” and “unjustifiable.”

The scandal broke when IRS officials apologized for improperly targeting Tea Party groups applying for tax-exempt status, and has led to Republican accusations the White House used the tax collecting agency to intimidate political opponents.

Read more from this story HERE.

IRS Workers Want Out of Obamacare (+video)

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photo credit: fibonacci blueBy Todd Beamon. The federal employees who will be responsible for administering Obamacare for the American people don’t want it for themselves.

The National Treasury Employees Union, which represents workers at the Internal Revenue Service, is asking its members to write letters to Capitol Hill saying they are “very concerned” about legislative efforts requiring IRS and Treasury employees to enroll in the Obamacare exchanges.

“I am a federal employee and one of your constituents,” one letter begins, Forbes blogger Avik Roy reported on Friday. “I am very concerned about legislation that has been introduced by Congressman Dave Camp to push federal employees out of the Federal Employees Health Benefits Program (FEHBP) and into the insurance exchanges established under the Affordable Care Act (ACA).”

Camp, the Michigan Republican referred to in the letter, is chairman of the House Ways and Means Committee, whose members oversee tax legislation in the House of Representatives. The U.S. Supreme Court ruled last year that Obamacare’s insurance subsidies are technically tax credits, falling under the authority of the IRS.

Camp introduced legislation in April to put all federal employees on the healthcare exchanges in response to news reports that members of Congress and their staffs were seeking to be exempt from the Obamacare requirement that they enroll in the exchanges. Read more from this story HERE.

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Krauthammer: Effort to defund Obamacare ‘really dumb’

By Jeff Poor. On Friday’s “Special Report,” Washington Post columnist Charles Krauthammer went against the conventional wisdom of some in the conservative movement by arguing efforts to defund President Barack Obama’s 2010 health care legislation at the expense of shutting down the federal government was “really dumb.”

“Never issue a threat you’re not prepared to in the end honor and deliver on,” Krauthammer said. “And if the Republicans imagine they’re going to either stop the funding of the government or refuse the raising of the debt ceiling, they’re out of their minds. It would be a catastrophe in the end. All the president has to do is wait and they’re going to cave. This happened on January 1 of this year. It happened with the debt ceiling. We know the end game. Why would you threaten something and demand in return something you know the president will never do? It’s his signature legislation. It would be repudiation of his entire first term. The only alternative is to go over a cliff. It is really dumb.” Read more from this story HERE.

Sen. Coons Denies Knowledge of or Involvement with Christine O’Donnell Tax Breach

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As unanswered questions swirl around Christine O’Donnell and the breach of her personal tax records, the other key figure in Delaware’s 2010 U.S. Senate race said neither he nor his campaign had anything to do with it.

Democratic Sen. Christopher A. Coons, who handily defeated Ms. O’Donnell three years ago in the contest to fill Vice President Joseph R. Biden’s Senate seat, says he hasn’t been contacted by congressional investigators or the Treasury Department watchdog responsible for looking into the improper use of Americans’ private tax records.

“Any political abuse of the government’s power is inappropriate, wrong and ought to be investigated fairly,” said Ian Koski, a spokesman for the senator. “This particular matter was already subject to a months-long investigation by the Treasury Department — which found no wrongdoing — and no evidence has been presented that indicates that the Treasury investigation was unfair or inadequate.”

The Washington Times first reported last week that Ms. O’Donnell’s personal tax records were accessed by a Delaware official, who has now been identified as David Smith, an investigator with the state’s Division of Revenue. The breach occurred in March 2010, the same month Ms. O’Donnell announced she would challenge Republican Michael Castle in the party’s Senate primary.

The timing and release of information related to Ms. O’Donnell’s taxes to the media raises questions about the possible role her political enemies played, and whether Delaware state officials used a backdoor into Americans’ confidential IRS tax records.

Read more from this story HERE.

IRS Pursuing ‘Stateless Income’ Tax Enforcement: Official

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Photo Credit: ReutersThe Internal Revenue Service is pursuing tax enforcement cases against companies over the issue of “stateless income,” a senior agency official said on Wednesday in a reference to corporate profits that are not taxed by any country.

Erik Corwin, an IRS deputy chief counsel, said there were international tax disputes with companies, “most involving consequences of complex restructurings designed either to create stateless income or to affect a tax efficient repatriation.”

“So those are a family of cases that are in the pipeline and being looked at,” he told tax lawyers in a speech in Washington.

Asked by reporters later to elaborate on any litigation, Corwin declined to comment. But tax lawyers said the references to stateless income and profits held offshore could signal a new enforcement approach by the IRS.

“I have not heard the IRS use the term before,” Edward Kleinbard, who coined the “stateless income” phrase in a 2007 research paper, said in a telephone interview.

Read more from this story HERE.