360° Coverage : Welcome To The Dark Side -- Of Tax

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Welcome To The Dark Side -- Of Tax

May 5 2014, 12:48pm CDT | by

“Use the force, Luke.” We may all need the force soon. Suppose the House Ways and Means Committee asked the IRS for your tax returns and released them to the public without your consent. Everyone in...

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19 weeks ago

Welcome To The Dark Side -- Of Tax

May 5 2014, 12:48pm CDT | by

“Use the force, Luke.”

We may all need the force soon.

Suppose the House Ways and Means Committee asked the IRS for your tax returns and released them to the public without your consent. Everyone in the Empire would know a whole lot more about you than you would want them to know. Impossible, you say? Well, maybe, maybe not.

In early April, House Ways and Means Committee Chair Dave Camp sent a letter to Attorney General Eric Holder to refer former IRS official Lois Lerner to the Justice Department for criminal investigation. Lerner is at the center of the IRS’s abusive treatment of conservative groups that were applying for tax-exempt status as social welfare organizations. And House Republicans are obsessed with her.

Camp posted that letter online. And here’s the problem — the letter included an attachment of more than 80 pages. Within those pages were three tables listing organizations that had applied for tax exemption, the status of their applications, and problems the IRS screeners indentified in their submissions. Camp and the committee did this on a party-line vote, and they say they had the authority to disclose the information.

Some of the groups – like Crossroads GPS – are politically active and involved in the controversy about how the IRS was handling conservative organizations. But information was also disclosed regarding what appear to be innocent bystanders. I mean, I don’t think the Miss America Foundation and the World Wildlife Fund are run by Karl Rove.

Section 6103 of the Internal Revenue Code, provides for the confidentiality and disclosure of tax returns and return information. Section 6103 was enacted in 1976 as a direct response to the abuses of the Nixon administration. In complying with the tax laws, we are required to turn over a lot of information to the government. And the government is required, by law, to protect that information. So, this is a statute that I value deeply. And it’s also a statute the IRS has been very good at protecting and enforcing. You see, it remembers Nixon, too.

The House Ways and Means Committee is one of only three committees that has the direct authority — under section 6103(f) — to require the IRS to turn over specific taxpayer information. The other two are the Senate Finance Committee and the Joint Committee on Taxation. That gives these committees great power. And as Winston Churchill is credited with saying, with great power comes great responsibility.

Some think the Ways and Means Committee may have broken the law when it released the tax information it did here. If it did, the taxpayers involved can probably do nothing about it.

Tax Analysts broke a great story on this today. David van den Berg reports that this episode raises several questions: What are the rules governing the taxwriting committees’ power of disclosure? Are there limits to what they can release? And how can taxpayers whose information is released seek redress?

It can be argued that what Ways and Means released is or is not confidential tax information. But I believe this leads us down a dangerously slippery slope. When Congress doesn’t respect taxpayer confidentiality, it doesn’t respect taxpayers.

And I’m not giving Democrats a pass on this. Oh, the Democrats on Ways and Means said some great things as Camp was getting ready to disclose the information on these groups. “The very disclosure that you put to vote today violates the very taxpayer protections this committee meant to create,” said Ways and Means ranking minority member Sander M. Levin, a Democrat who, like Camp, is from Michigan. Let’s see what the Democrats have to say when they are back in power and going after the Koch brothers. It’s less and less about us taxpayers and more and more about the power of the Washington elite.

I would agree with Alan J. Wilensky, a Minneapolis tax lawyer and former acting Treasury assistant secretary for tax policy, who told van den Berg, “I don’t know that they violated the letter of the law, but it seems to me they have violated the spirit of the law.”

I don’t know Dave Camp, but I respect him. I’ve heard him speak and have been greatly impressed. He pushed for tax reform at a time when it was all but impossible and persevered. If we get tax reform in the future, it will be because he provided the base for it. So I can’t understand why he would do this. Could he possibly have a black helmet complete with face shield and complex breathing apparatus?

“Luke, I am your father.”

Good grief. May the force be with us all.


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