Archives for 2013

FOIA request to the IRS regarding policies and practices concerning applications for 501(c)(4) status

FOIA Request

CoA requests access to the following records pertaining to the Internal Revenue Service’s (IRS) Exempt Organization (EO) Division for the time period January 1, 2009 to the present:

 

  1.  Copies of any criteria that the IRS Cincinnati Service Center has used to assess applicants for 501(c)( 4) status;
  2.  Communications from the Treasury Inspector General for Tax Administration (TIGTA) to the EO Division concerning any audit or investigation conducted of the EO Division;
  3. Copies of any Form 990 Schedule B (Schedule of Contributors) released by the IRS to a third party in response to a Freedom of Information Act (FOIA) request, as well as copies of the IRS’s FOIA response letter to that request;
  4. All records, including documents and emails, relating or referring to any disclosure of an exempt organization’s Form 990 Schedule B to any employee, contractor or officer of the Executive Office of the President, excluding any such records disclosed pursuant to 26 U.S.C. § 6103(c) or 26 U.S.C. § 6103(g);
  5. All records, including documents and emails, referring or relating to any request from the President, Vice President, Cabinet official, employee in the Executive Office of the President, or employee in the Executive Office of the Vice President to any officer or employee of the IRS to conduct an audit or other investigation of any particular taxpayer; and a. If any requests are located in response to this item, then all communications between the IRS and TIGTA concerning those requests.

Click Here for the full request

Related work on the IRS:

FOIA Freak-Out: IRS Wrongly Denies FOIA Request, Comes Unglued Over Media Response

Cause of Action letter to the U.S. Attorney Kerry Harvey requesting an investigation of the IRS and their employees in the IRS Cincinnati Service Center in Kentucky for potential violations of the law concerning conspiracy by singling out organizations based on political views stated in their tax-exempt applications.

IRS Is At Risk of Conspiracy

FoxNews.com: Dan Epstein: Does the IRS believe that support for Israel is support for terrorism?

Does the IRS believe that support for Israel is support for terrorism?

By Dan Epstein   Published May 16, 2013   

In the wake of recent scandal arising from the Internal Revenue Service’s (IRS) targeting of social welfare groups for their political beliefs, little has been said about the fact that the IRS also scrutinized several pro-Israel organizations, including Z Street, an organization that applied for 501(c)(3) status.

According to Politico, Z Street was targeted by the IRS because “applications mentioning Israel were getting special attention.”

Another group was asked by the IRS, “Does your organization support the existence of the land of Israel?  Describe your organization’s religious belief system towards the land of Israel.”

The supposed justification for such questions: “the government shouldn’t bestow a benefit on an individual or organization engaged in illegal activity like terrorism.”

It’s not merely problematic that the IRS’ questions are woefully under-inclusive with regards to preventing the funding of terrorism – indeed they simply equate being in support of Israel (Zionism) as terrorism, which is less a statement about concerns against promoting terrorism than a reflection of patent anti-Semitism.

These questions are also overly inclusive to the degree of violating protected expression, hinting that the IRS sought to discriminate against those groups that held certain religious beliefs – whatever the form.  (If there’s any question as to the anti-Semitism here, simply look at Jeffrey Goldberg’s tweet on a recent Al Jazeera article which equates Zionism with anti-Semitism).

But government myopia has lurked behind state-sanctioned discrimination throughout history.

To illustrate, Jon Waddell, manager of the IRS’s Exempt Organizations Determinations Group stated “Israel is one of many Middle Eastern countries that have a ‘higher risk of terrorism’… A referral… is appropriate whenever an application mentions providing resources to organizations in a country with a higher risk of terrorism.” Higher risk compared to whom? Libya? Afghanistan?

The idea that supporting Israel is equitable to supporting terrorism is not only racist, it’s false.

The State Department has designated only four countries to be “State Sponsors of Terrorism” – Cuba, Iran, Sudan, and Syria — and in its most recent report on Mideast terrorism, Israel was identified by the State Department as “a resolute counterterrorism partner in 2011.”

Far from being a country whose support constitutes a higher risk of terrorism, the State Department holds the opposite: “Israel faced terrorist threats from Hamas, the Popular Resistance Committees, and Palestinian Islamic Jihad (PIJ), particularly from Gaza but also from the West Bank, and from Hizballah in Lebanon.”

No citizens of Israel are listed on the FBI’s terrorism watch list, but the majority of those who are listed share one thing in common: being anti-Israel.

The idea that the IRS’s targeting of American pro-Israel groups had any sound basis in public policy is not only inaccurate, but has never been justified by U.S. policy, and hopefully never will be.

To give a sense of why the IRS’s anti-Semitism is also dangerous as a policy matter, consider those groups and funding schemes that the IRS has failed to scrutinize in the name of public policy.

On May 30, 2010, the Freedom Flotilla, led by the pro-Hamas Free Gaza Movement, incited violence and the death of nine people in an attempt to defy Israeli law.

The flotilla was funded by the Free Gaza Movement,  which is a project that the IRS has allowed to receive tax-deductible contributions through an IRS-approved financial sponsor, the American Educational Trust, a 501(c)(4) based in Washington, D.C. Apparently fundraising for enemies of the United States is not the type of red flag that concerns the IRS.

Indeed, as another example, consider that the International Solidarity Movement, which has ties to Hamas and Islamic Jihad, receives tax-deductible contributions through its financial supporter, the A.J. Muste Memorial Institute, an IRS-designated 501(c)(3) charity.

So we have an IRS that willfully prevents the free exercise of American groups that support a country that has been a “resolute counterterrorism partner” of the United States since its inception and yet an IRS that has supported entities which have funded the pro-terrorism Free Gaza Movement and International Solidarity Movement.

If only this was a regrettable moment of anti-Semitism in the country with the world’s oldest Constitution committed to liberal democracy.  But, sadly, it presents a much deeper problem: an administration that has convinced its agencies that violating freedom in contexts that have no rational relationship to the prevention of terrorism, is, indeed, good policy for America.

Dan Epstein, executive director, Cause of Action, a non-profit, nonpartisan government accountability organization.

CoA Argues in 9th Circuit to Help Save Drakes Bay Oyster Farm

Drake’s Bay Oyster Farm Fights to Stay Open

The future of the company is now in the hands of three judges

By Joe Rosato Jr.
|  Tuesday, May 14, 2013  |  Updated 7:25 PM PDT
The owners of Drake s Bay Oyster Company on Tuesday asked a Federal Appeals Court to grant it an injunction to remain in business while the case plays out in court. Joe Rosato Jr. reports.

The owners of Drake’s Bay Oyster Company on Tuesday asked a Federal Appeals Court to grant it an injunction to remain in business while the case plays out in court.

Attorneys for Cause of Action, the government watchdog group representing the oyster farm, appeared before a three-judge panel in the 9th Circuit Court of Appeals in San Francisco.

The group is appealing then-Interior Secretary Ken Salazar’s decision in November to refuse to extend the oyster company’s lease on National Park land.

The 9th circuit is reviewing a U.S. District court’s refusal to grant the oyster farm a preliminary injunction, halting the federal closure order. In the meantime, the oyster farm which employs 30 people continues to operate on a temporary emergency order.

“We hope the decision will come down that we get the injunction,” said Kevin Lunny, co-owner of Drakes Bay Oyster Company. “We continue to plant our oysters and we continue to plant food for the San Francisco Bay Area.”

In court Tuesday, attorneys for Lunny laid out their case that Salazar relied on faulty scientific data in order to make his decision. But Federal judge Paul Watford questioned whether Congress had granted Salazar the power to make the decision at his own discretion.

“At the end of the day,” said Watford, “the secretary said the more important objective is to give effect essentially to Congress’ intent that this area be returned to wilderness status.”

Attorneys for the Department of Justice, which is defending Salazar’s decision, echoed that the former interior secretary was within his right to end the farm’s lease.

“His decision was based on the incompatibility of commercial activities in wilderness on a policy basis,” said government attorney David Gunter, “not on any disputed science.”

The panel of judges didn’t immediately issue a ruling, and has no timetable for issuing its decision. Meanwhile, strange bedfellows have come to Lunny’s cause. Famed chef Alice Waters has filed a brief in support of the farm, and Republicans attached a proposal to extend the farm’s lease twenty years, to a proposed bill to open the Keystone Pipeline in Alaska.

“We’re appreciative of anybody who be willing to stand up for what’s right,” responded Lunny. Environmental groups who have called for the oyster operation’s removal say the case could set a precedence for groups hoping to open National Park lands to commercial enterprises.

“There are definitely special interests out there who are not looking out for the American people, “said Neal Desai of the National Parks Conservation Association, which supports the farm’s removal. If Lunny prevails at the federal appeals court, the case would return to the same Oakland U.S. District Court which denied the oyster farm’s initial request for an injunction.

Standing out front of the federal court, dressed in a suit and tie, Lunny considered the long legal road ahead.

“Our livelihood’s threatened right now by the fact that we may or may not be able to continue farming,” Lunny said.

CoA Letter Requesting Investigation of IRS Violations

Cause of Action letter to the U.S. Attorney Kerry Harvey requesting an investigation of the IRS and their employees in the IRS Cincinnati Service Center in Kentucky for potential violations of the law concerning conspiracy by singling out organizations based on political views stated in their tax-exempt applications.

RFI to USAO ED KY

 

 

Shaun McCutcheon et al v. Federal Election Commission- AMICUS CURIAE SUPPORTING APPELLANTS

Cause of Action submitted an Amicus Curiae to the Supreme Court of the United States. The case is Shaun McCutcheon  et al v. Federal Election Commission.

Amicus Curiae

FOIA Freak-Out: IRS Wrongly Denies FOIA Request, Comes Unglued Over Media Response

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(Photo via Politico and BGA Think Tank)

A little-known provision of the Internal Revenue Code, IRC § 6103(g), allows the President of the United States to request the tax returns of any individual or business he wishes.  Concerned that the President may be asking for tax returns in order to retaliate against opponents of his administration, in March 2012 Cause of Action submitted a FOIA request to the Internal Revenue Service (IRS) seeking records of any presidential requests for these returns.  The IRS denied our request in May, citing a provision that prohibits the release of private tax return information.  Since Cause of Action asked only for any presidential requests for returns, not the returns themselves, we appealed the IRS’s decision.  When the IRS denied our appeal as well, we sued for the documents’ release while also submitting an additional FOIA request seeking communications concerning our original request.

After months of back-and-forth between Cause of Action and the IRS, in October 2012 we were stunned to learn that the documents we’d been requesting since March had never even existed!  According to the IRS Office of Disclosure, since the law’s inception in 1976 no president had ever requested tax returns through § 6103(g).  Why it took the IRS seven months to disclose this important bit of information, plus a bona fide freak-out by IRS Counsel and Disclosure staff, is revealed in the following documents [Large file warning] received by Cause of Action in March 2013.

Take a look at these excerpts from an e-mail between Tax Law/ FOIA Specialists Valerie Barta and Janice Rudolph, dated May 21, 2012:

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Ms. Rudolph agreed, concluding that Cause of Action was not privy to information regarding presidential requests for tax returns.  Note that these specialists appeared to operate under the assumption that the records did, in fact, exist.

Cause of Action eventually filed suit on October 2, prompting immediate finger-pointing in the IRS’ FOIA division:

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Ms. Barta’s response is telling:

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Way to throw a colleague under the bus, Val.  Ms. Barta and Ms. Rudolph both seemingly failed to inform management why they denied Cause of Action’s request or to convey the seriousness with which we threatened to take legal action.  In fact, it appears that the two neglected to conduct a due diligence review of potentially responsive documents, instead relying on poor legal reasoning to prop up their contention that the documents would be exempt from disclosure.  After we filed suit, IRS analyst David Nimmo returned to the issue and made a surprising discovery.

An excerpted e-mail from the afternoon of October 2:

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Forgive us for feeling a little miffed that the IRS didn’t research this issue with Counsel before denying both our request and appeal.  And since it took Mr. Nimmo a matter of hours to ascertain that no records existed, what exactly prevented Ms. Barta and Ms. Rudolph from conducting that most basic of searches five months previously?

Counsel’s research soon yielded an answer to whether the denial was done in error.

Senior Technician Reviewer Don Squires on October 3:

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Counsel A.M. Gulas:

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And Chief of Disclosure Gary Prutsman:

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With it now established that the IRS had erred in denying our request, one would expect the agency to confess its mistake and quickly contact us to remedy the situation.  But with journalists now asking questions, the IRS was hesitant to admit it had acted wrongly.  In fact, all the press attention caused a bit of an office-wide freak-out.

Disclosure Chief John Davis responding to our press release and the resulting media inquiries on October 3:

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Counsel A.M. Gulas after the Washington Examiner published a piece on October 4:

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As the flames climbed higher, IRS firefighters worked to douse the blaze before it consumed their agency’s reputation:

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Counsel Sarah Tate came up with a creative way to spin their original denial:

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If that explanation sounds largely incomprehensible, that’s because it is.  By this point the IRS was grasping for any justification that would allow them to avoid responsibility for their error.  In the process, they wasted a tremendous amount of employee time and taxpayer dollars defending themselves in a pointless battle they could have easily avoided some months previously.

As we often do, Cause of Action alerted media when we filed our lawsuit against the IRS for refusing to disclose presidential requests for tax returns.  After Politico and the Washington Examiner ran stories, media began questioning the IRS for a response.  Although Cause of Action had been in contact with the IRS regarding our FOIA request and appeal for months, they only revealed that no documents existed to the Washington Examiner and the Washington Free Beacon.  IRS officials apparently do not respect the FOIA process or even the judicial system, but instead will cave to media scrutiny.

After finally receiving written confirmation in late November that no responsive documents existed, Cause of Action dismissed the lawsuit on December 5; by that time, however, the damage had already been done.  Because two FOIA analysts failed to undertake a simple search and instead relied on their own inadequate legal analysis, Cause of Action and the IRS were both forced to spend time and money on needless litigation.  Even after it became clear no records existed, the IRS continued to obsessively protect its reputation rather than admit its error and move forward.  Unfortunately, it appears that one must sue to ensure that IRS analysts conduct searches with the diligence and oversight that FOIA demands.

 

CoA Finds More Evidence in USGS Documents that Interior Sec.Was Misinformed in Decision to Deny DBOC Permit

FOR IMMEDIATE RELEASE                                                                                                       

May 13, 2013

 Cause of Action Finds More Evidence in USGS Documents that the Interior Secretary Was Misinformed in His Decision to Deny DBOC Permit 

 

WASHINGTON – Today Cause of Action (CoA), a government accountability organization, released internal email communications from the United States Geological Survey (USGS) regarding the monitoring of harbor seals at Drakes Estero. Cause of Action obtained these documents via a Freedom of Information Act (FOIA) request sent in December 2012 concerning the integrity of the National Park Service’s (NPS) protection of marine mammals.

A USGS assessment of harbor seal activity at Drakes Bay Oyster Company (DBOC), which occupies some of the Estero, was used to support an NPS conclusion that a continuation of DBOC’s Special Use Permit would have long-term adverse impacts on harbor seals. DBOC is now engaged in a lawsuit against the Department of Interior following then-Secretary of the Interior Ken Salazar’s decision to not renew the Special Use Permit and, in effect, shutting down of the small, family-run farm. Cause of Action had reason to believe that the information upon which NPS relied was a misrepresentation of science, and that Sec. Salazar may have based his decision about the Special Use Permit on this false information.

The FOIA production from USGS reveals in internal agency emails:

  • Then-Secretary Ken Salazar and the Department of the Interior pressured USGS for the harbor seal monitoring information to inform the Secretary on his decision regarding DBOC.
  • The USGS assessment was considered of very high priority to inform the Secretary’s decision.
  • Two Assistant Secretaries (Castle and Jacobson) were apparently briefed on the USGS assessment to inform the Secretary for his decision whether to renew the permit.

The full production can be viewed here.