“In almost every administration since the IRS’s inception, the information & power of the tax agency have been mobilized for explicitly political purposes.”
David Burnham, A Law Unto Itself: The IRS and the Abuse of Power (1990)
Following the misuse and unauthorized release of confidential taxpayer information during President Obama’s first term, including the largest breach of taxpayer confidentiality laws by the federal government in United States history, Cause of Action Institute (“CoA Institute”) investigated the legal and institutional checks designed to protect against such improper disclosure and the means by which the Obama Administration may have evaded those checks.
That investigation revealed that President Obama has circumvented the congressionally created and authorized procedures for accessing confidential taxpayer information—procedures that were designed to be exclusive—by relying on individual consent forms that were never intended for use by the President. The practice has allowed the President to avoid the reporting requirements and limitations placed on presidential access to taxpayer information by the Tax Reform Act of 1976. In particular, the use of individual consents enables the administration to skirt statutory recordkeeping and reporting requirements to Congress, the limitations on the kind of information available for disclosure, and the extent to which such information can be shared within government agencies and offices.
President Obama has circumvented the congressionally created and authorized procedures for accessing confidential taxpayer information.
In addition, the investigation uncovered that the Office of the White House Counsel under President Obama has employed on a continuous basis at least one attorney detailed from the Department of Justice Tax Division. At least two of those attorney-detailees had knowledge of confidential taxpayer information gained while serving as counsel to the Internal Revenue Service concerning litigation with nonprofit groups opposed to President Obama’s policies. This Office of the White House Counsel practice is unique to the current administration and appears intended to select Tax Division attorney-detailees who had access to taxpayer information otherwise restricted from disclosure to the President and White House officials.
Equally troubling, neither the Department of Justice Tax Division nor the Office of the White House Counsel has implemented context-specific training, guidelines, or ethical screens to prevent the inadvertent or deliberate disclosure of confidential taxpayer information by attorney-detailees. Inherent conflicts of interest in the detailing program make it imperative that Tax Division attorneys who work on detail to the Office of the White House Counsel, especially those who have served as counsel to the Internal Revenue Service in matters involving the political opponents of President Obama, receive enhanced training and supervision to ensure the safeguarding of confidential taxpayer information. There does not appear to be any program, specialized training, or targeted guidelines in place.
CoA Institute recommends that Congress amend the Internal Revenue Code to ensure that the exclusive mechanisms created by the Tax Reform Act of 1976 for presidential access to confidential taxpayer information are enforced. Congress should foreclose presidential access to taxpayer information under individual consents, as well as require the Executive Office of the President to develop and report safeguard protocols on the handling of such information. Alternatively, Congress should declare that the use of individual consents by the White House be subject to the Paperwork Reduction Act, which would require the forms used for such consents to be approved by the Office of Management and Budget, as well as an opportunity for public notice and comment on the use of such forms to collect information. Finally, the DOJ Designated Agency Ethics Official, the DOJ Professional Repsonsibility Advisory Office, and the DOJ Office of Professional Responsibility should be tasked to investigate attorney misconduct and to report to the public and Congress with the same scope as other Inspectors General throughout the federal government.