The Treasury Inspector General for Tax Administration (TIGTA) has concluded its review of allegations brought by Cause of Action Institute (CoA Institute) concerning the unlawful disclosure and inspection of more than one million pages of confidential taxpayer information. The agency opened its investigation in July 2016 but now claims it cannot provide any further information about of the outcome of its review because such information is itself protected by confidentiality laws originally intended to protect taxpayers.

In June 2016, CoA Institute called on TIGTA and the Department of Justice Office of Inspector General (DOJ-OIG) to examine potential legal violations arising from the October 2010 disclosure of more than one million pages of tax returns and return information to the FBI and DOJ Public Integrity Section by Lois Lerner and the IRS.  CoA Institute first alerted TIGTA about the possible violation of Section 6103 of the Internal Revenue Code with respect to these records in July 2015. [For more information, see pages 11–15 of CoA Institute’s recent investigative report.]

Just months prior to TIGTA’s response, DOJ-OIG confirmed the unlawful disclosure of taxpayer information but dismissed a request to investigate the wrongdoing.  The IG concluded that CoA Institute was correct that “protected taxpayer information was included” on CDs provided by the IRS to the FBI and DOJ, yet it determined inexplicably that the matter “does not warrant further investigation[.]”

CoA Institute Assistant Vice President Lee A. Steven: “Although it appears that TIGTA has investigated our now-proven allegations of wrongdoing, we are concerned by the lack of transparency surrounding whether the responsible IRS officials will be held accountable for the unlawful disclosure of over one million pages of confidential taxpayer information. Congress never intended taxpayer confidentiality laws to be a shield against the disclosure of information concerning the conduct of officials who have abused their positions and acted in contravention of their duty to protect American taxpayers’ most private information.  This incident involves one of the largest and most significant breaches of taxpayer confidentiality laws by the federal government in U.S. history.  The DOJ-OIG seems to have washed its hands of the matter and it is disappointing to see TIGTA do the same.”

The DOJ Public Integrity Section and the FBI originally sought the records at issue in an attempt to identify non-profit organizations who may have engaged in prohibited political activity.  As part of its public oversight efforts, CoA Institute obtained records demonstrating that, between 2009 and 2012, neither agency ever submitted the statutorily-required requests for disclosure of this information to the IRS.

Section 6103 of the Internal Revenue Code provides a strict rule of confidentiality for tax returns and return information.  Unless a statutory exception applies, government agencies and their employees may not disclose such information.  Violations can include fines, termination from employment, and imprisonment.

To access CoA Institute’s June 29, 2016 Letter to TIGTA and DOJ-OIG, click here.
To access DOJ-OIG’s October 12, 2016 response, click here.
To access TIGTA’s December 19, 2016 response, click here.
To access CoA Institute’s October 2016 Investigative Report, click here.