Have IRS audits become political

0 Comments | Insight on the News, April 7, 1997 | by David Wagner

The IRS, meanwhile, is legally barred from telling inquirers who is or is not being audited. It can give a general denial to the question, "Are you targeting conservative groups?" but it cannot answer the question, "What liberal groups are you auditing?" The agency is exploring whether it has legal authority to disclose its audit lists to the congressional oversight committees.

Margaret Milner Richardson was named IRS commissioner in 1993. This post is a presidential appointment -- rightly so because making the commissioner answer to an elected president gives the IRS at least a modicum of political accountability. However, critics point to Richardson's background as a Democratic activist as a factor that encourages a sinister reading of the recent audit coincidences. The Fresno Bee described Richardson in 1994 as "a politically active friend of another former tax lawyer, Hillary Rodham Clinton, whom she advised on women's health issues during the campaign."

Last June 10, Richardson said in a speech to the Bar Association of the City of New York: "There is a real possibility that political activities this year will focus public attention on the activities of tax-exempt entities. This is not an area where we relish expanding our role.... But I do want to make it clear that we are charged with enforcing the law and plan to continue doing so." By January, however, she had announced plans to leave her IRS post as soon as a successor could be found.

Meanwhile, the IRS' procedures for selecting nonprofits for audit are not random -- indeed, the agency and its critics agree that media coverage of the activities of nonprofits is a factor in the choice of audit targets. A nonprofit that often is in the news in connection with political events has a higher chance of being audited. If the media are more prone to suspect tax-code violations on the part of conservative organizations, then perhaps one need not look further for the cause of the IRS' seemingly biased enforcement practices.

According to van Kannon of Heritage, the IRS is "the single largest customer of Burrelle's" the newspaper clipping service. Burrelle's spokesmen were unavailable for comment.

Some targets of the audits doubt the IRS simply is clipping newspapers. "They say they only started that in 1996," says NCPPR's Ridenour, "and we were audited in '95." Welli, the former IRS internal inspector, says: "They told us in late 199S that they were increasingly relying on the media for audit leads. But at that time, only one investigation had originated that way. The rest had come from internal audit criteria."

Manny Klausner, a Los Angeles attorney who chairs the Federalist Society's Free Speech and Election Law section tells Insight: "There are serious civil-liberties implications whenever the government is gathering financial data on people. As long as the government is taxing income, it's going to have to monitor people's expenditures. It shouldn't surprise us that violations of citizens" rights occur."