Tag: Infernal Revenue Service

Infernal Revenue Service Wasted $5.6 Billion On Bogus Obama Stimulus Tax Credits

IRS Wasted $5.6B On Bogus Obama Stimulus Tax Credits: Audit – Washington Times

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The IRS doled out more than $5 billion in potentially bogus college aid payments under an Obama stimulus tax credit in 2012, according to a new report Tuesday from the agency’s inspector general that said the administration still doesn’t have a good handle on how to root out erroneous claims.

More than 3.8 million students received more than $5.6 billion in questionable tax credits, the audit found – more than half of those never filed their tuition statement, while others were paid tax credits even though the schools they attended weren’t acceptable institutions.

Still other students claimed the credit for more than four years.

“The IRS still does not have effective processes to identify erroneous claims for education credits,” said J. Russell George, Treasury Inspector General for Tax Administration, who said he’s repeatedly warned the IRS about the problem but “many of the deficiencies TIGTA previously identified still exist.”

Many of the problems, however, lie with Congress, which needs to grant the IRS new powers to check students’ claims against other government databases, Mr. George said.

The tax break at issue is known as the American Opportunity Tax Credit, which was a creation of President Obama’s 2009 stimulus. It was slated to expire in 2010, but Mr. Obama and Congress have extended it through 2017.

The credits are designed to offset the costs of college.

IRS officials said part of the blame for the potential fraud lies with schools and the school year itself, saying that information on students’ attendance comes too late for the agency to be able to check it against returns.

But Debra Holland, IRS’s wage and investment division commissioner, insisted her agency does have “effective processes to identify erroneous claims,” saying they did catch 1.8 million questionable returns and put nearly 9,600 of those cases through a tax exam.

Ms. Holland blamed a lack of money for her agency’s inability to do more, and said they needed to limit their efforts to tax returns that had the highest risk of errors and the best chance of reclaiming money.

The IRS has already moved to add more checks to its system by looking to see who’s claimed the tax credit for more than four nonconsecutive years.

In a statement Tuesday, the IRS said Congress could help the agency out by granting it the power to automatically reject payments to students who claim more than four years of the tax credit. The agency also said Congress could approve new tools to access other government databases to check students’ eligibility for the tax credits, and could speed up the timeframe for filing the tuition forms that the inspector general said were missing in most of the cases it identified.

“Funding limitations have severely hampered our efforts in this and other compliance areas. Since 2010, the IRS budget has been reduced by nearly $1.2 billion and we expect to have 16,000 fewer employees by the end of this fiscal year. We simply do not have enough resources to audit every questionable credit,” the agency said.

The agency also said it believed the estimate of $5.6 billion was “overstated,” though the IRS acknowledged that it should try to do more to cut down on bad payments.

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Infernal Revenue Service Ignoring Over 60% Of Taxpayer Phone Calls

IRS Ignoring Over 60% Of Taxpayer Phone Calls As Tax Deadline Looms – Right Scoop

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Wow. In 7 years Obama has this agency so screwed up with Obamacare that they are forced to ignore a whopping 60% of all taxpayer phone calls because service has gotten so bad:

WASHINGTON TIMES – IRS Commissioner John Koskinen said Tuesday that service at his agency has gotten so bad that they are ignoring more than 60 percent of taxpayers’ phone calls during this tax season.

Speaking at the National Press Club, Mr. Koskinen pleaded with more money, saying a budget boost would help them staff their overwhelmed customer service lines. He also said it would help reverse staffing cuts in their compliance division, where he said the government will lose $2 billion this year in money it would otherwise have been able to collect if it had better staffing.

If you can’t get through to the IRS, you should call the White House and see if Barack has some free time to help you.

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Infernal Revenue Service Paid Out More Than $20B In Erroneous Low-Income Tax Credits

Watchdog Report: IRS Paid Out More Than $20 Billion In Erroneous Low-Income Tax Credits – Big Government

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The Internal Revenue Service paid out $14.5 billion in erroneous Earned Income Tax Credit payments and between $5.9 billion and $7.1 billion in improper Additional Child Tax Credit payments in Fiscal Year 2013, according to a new government watchdog report.

The EITC and ACTC are refundable tax credits intended for lower-income Americans. In Tax Year 2012, the IRS paid out $63 billion in EITCs and $26.6 billion in ACTC payments.

A Treasury Inspector General for Tax Administration (TIGTA) report released Tuesday, however, reveals a high risk level for improper payments for both programs.

According to the report, TIGTA estimates that in Fiscal Year 2013, 24 percent or $14.5 billion EITC payments were made in error and between 25.2 percent and 30.5 percent or between $5.9 billion and $7.1 billion ACTC payments were made in error.

The report notes that since FY 2011, the IRS has rated the ACTC risk rate as low. However this most recent report shows that is not the case.

“The IRS has continually rated the risk of improper Additional Child Tax Credit payments as low; however, TIGTA’s assessment of the potential for improper payments in this program indicates that its improper payment rate is similar to that of the Earned Income Tax Credit,” J. Russell George, Treasury Inspector General for Tax Administration, said in a statement in conjunction with the report’s release.

“It is imperative that the IRS take action to identify and address all of its programs that are at high risk for improper payments,” George added.

TIGTA reports that while the IRS has “not developed a strategy to identify the root causes of ACTC improper payments” TIGTA believes the causes to be similar to those they have identified for erroneous EITC payments, which include “authentification and verification” issues.

The watchdog made recommendations aimed at resolving some of the improper payment issues.

“TIGTA recommended that the IRS ensure that the results of the ACTC Improper Payment Risk Assessment accurately reflect the high risk associated with ACTC payments, identify the root causes of the improper ACTC payments, and establish a plan to reduce erroneous payments,” the report reads. “Furthermore, if correctable error authority is granted, the IRS should contract with the Department of Health and Human Services to obtain the complete National Directory of New Hires database.”

It further recommend that the IRS should seek “expanded National Directory of New Hires database authority to systemically verify claims for other income-based refundable credits.”

While the IRS agreed with the recommendations dealing with the explained National Directory of New Hires database, it disagreed with the rest of the body’s recommendations.

“The IRS disagreed with TIGTA’s other recommendations, stating that it follows Departmental and Office of Management and Budget guidance in conducting the Improper Payment Risk Assessment for the ACTC,” TIGTA detailed in a release. “Further, OMB acknowledges that the IRS already conducts an analysis of the Tax Gap that incorporates those credits. Finally, the IRS stated that obtaining the complete NDNH database is not cost effective.”

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Infernal Revenue Service Now Under Fire For Targeting Breitbart.com

IRS Under Fire For Targeting Conservatives Again… And This Time It’s A Media Outlet –

The Internal Revenue Service, already under investigation for illegally targeting conservative and tea party groups, recently audited the conservative Breitbart News Network in a move that the company says was politically motivated.

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The IRS sought the company’s financial records from 2012, Fox News reported earlier today. Brietbart.com relaunched that year with a more robust reporting team. Over the past two years, it has produced hard-hitting stories exposing scandals in the Obama administration.

The news drew a swift reaction from Breitbart’s leaders and prompted Sen. Ted Cruz, R-Texas, to fire off a letter to the IRS demanding answers about the audit.

“For the IRS to behave like a partisan political organization, targeting media organizations whose views differ from the president’s, would represent a gross abuse of power,” Cruz said. “It would undermine the statutory mission and integrity of the IRS. And it would likely subject IRS employees to criminal prosecution.”

Cruz said the IRS’ recent track record made the action against Breitbart “highly questionable.”

For more than a year, the agency has faced scrutiny for its illegal targeting of conservative and tea party groups seeking nonprofit status. The IRS also recently agreed to pay a $50,000 fine for wrongfully leaking the National Organization for Marriage’s confidential tax information.

Breitbart’s leaders said they wouldn’t cower under the threat of an IRS audit.

“We refuse to be intimidated by any efforts of the IRS to suppress our investigations of the Obama administration, including our ongoing effort to show the American people the fiasco that is our southern border,” said Stephen K. Bannon, executive chairman of Breitbart News Network, told The Daily Signal.

Added Larry Solov, president and CEO: “While we intend to comply fully with the audit, we will not stop our investigative reporting wherever it leads, including the White House.”

Fox News reported that the IRS “asked for a litany of documents, including logs of its receipts and expenses, but also its partnership agreement and a ‘written narrative’ of the business.” The agency told Fox News:

Federal privacy laws prohibit the IRS from commenting on specific taxpayer situations. The IRS stresses that audits are based on the information related to tax returns and the underlying tax law – nothing else. Audits are handled by career, non-partisan civil servants, and the IRS has safeguards in place to protect the exam process.

Cruz, in his letter to IRS Commissioner John Koskinen, appeared unmoved.

“This media audit, coupled with the recent proposal of 49 Senate Democrats to amend the Constitution to give Congress plenary power to regulate political speech, paints a disturbing picture of a coordinated assault on the First Amendment,” Cruz wrote.

Senate Democrats are currently debating a proposal that would amend the First Amendment by restricting political activity of Americans.

Cruz is also seeking the answers to these seven questions from the IRS:

1. How many other news organizations have been audited since President Obama has been in office?
2. How many of them could be identified as conservative- or liberal-leaning?
3. Have any other news organization been subjected to this sort of far-reaching and oppressive inquiry, including requesting the personal tax records of editors and reporters?
4. At what point does the IRS decide to take action to audit a news outlet?
5. Does the IRS worry that its extremely burdensome auditing process could effectively silence the press?
6. Previously, Sen. [Dick] Durbin wrote the IRS asking that it examine the tax-exempt status of Crossroads GPS, a Republican organization that spends money electing Republicans. Did the IRS ever receive any communications from any elected official asking it to examine Breitbart News Network, LLC?
7. Who, precisely, is responsible for making the decision to audit Breitbart News Network, LLC?

Ever since its founding by Andrew Breitbart, who died in 2012, the news organization has made its mark on journalism. Two of its biggest stories—an undercover video investigation of ACORN and Rep. Anthony Weiner’s lewd tweets—led to the downfall of the liberal organization and resignation of the New York congressman.

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Infernal Revenue Service To Review Church Sermons For Political Bias

IRS To Review Church Sermons For Political Bias, Big Three Networks Don’t Care – Media Research Center

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It’s not just the Tea Party that the IRS is giving extra scrutiny to, it’s also checking into church sermons. According to Investor’s Business Daily, the IRS agreed to an atheist group’s demands “to monitor sermons and homilies for proscribed speech that the foundation believes includes things like condemnation of gay marriage and criticism of ObamaCare for its contraceptive mandate.”

The division in charge of enforcing this review of religious speech, the Tax Exempt and Government Entities Division, was once headed by IRS scandal figure Lois Lerner. So far the Big Three (ABC, CBS, NBC) networks have yet to run with this stunning story on any of their evening or morning news programs.

On July 31, Investor’s Business Daily (IBD) opened their editorial headlined “IRS Strikes Deal With Atheists To Monitor Churches,” this way:

First Amendment: Government’s assault on religious liberty has hit a new low as the IRS settles with atheists by promising to monitor sermons for mentions of the right to life and traditional marriage.

A lawsuit filed by the Wisconsin-based Freedom From Religion Foundation (FFRF) asserted that the Internal Revenue Service ignored complaints about churches’ violating their tax-exempt status by routinely promoting political issues, legislation and candidates from the pulpit.

The FFRF has temporarily withdrawn its suit in return for the IRS’s agreement to monitor sermons and homilies for proscribed speech that the foundation believes includes things like condemnation of gay marriage and criticism of ObamaCare for its contraceptive mandate.

The irony of this agreement is that it’s being enforced by the same Tax Exempt and Government Entities Division of the IRS that was once headed by Lois “Fifth Amendment” Lerner and that openly targeted Tea Party and other conservative groups.

Among the questions that the IRS asked of those targeted groups was the content of their prayers.

Those who objected to the monitoring of what is said and done in mosques for signs of terrorist activity have no problem with this one, though monitoring what’s said in houses of worship is a clear violation of the First Amendment. Can you say “chilling effect”?

Congress can make no laws prohibiting the free exercise of religion. So it’s not clear where the IRS gets off doing just that by spying on religious leaders lest they comment on issues and activities by government that are contrary to or impose on their religious consciences. Our country was founded by people fleeing this kind of government-monitored and mandated theology last practiced in the Soviet Union.

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Infernal Revenue Service Spent $4.4 Billion On IT

IRS Spent $4.4 Billion On IT – Washington Free Beacon

The IRS under the Obama Administration has spent over $4 billion on contracts labeled under information technology and software despite IRS Commissioner John Koskinen testifying this week that budgetary restraints prevented the agency from spending $10 million to save and store emails.

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Koskinen said “declining budget resources” at the IRS caused the agency decided to reject spending the $10 million needed to ensure emails were properly secured.

A review of IRS spending by the Free Beacon shows the agency has spent a massive amount on what it labeled as IT/software and data processing contracts in the past five fiscal years. The official government’s spending website shows the IRS spent $4.4 billion during this time period.

A total of 12,543 contracts were awarded under this product code.

Records show the IRS under President George Bush spent a total of $5.3 billion in eight years for the same contractive services. If the IRS spending trends continue as they have thus far, the IRS under Obama is on track to far exceed what was spent during the Bush presidency.

Koskinen also said “continuing financial constraints have meant that this fiscal year, the IRS is spending minimal amounts supporting its $1 billion IT infrastructure.” Records show the agency has already spent $642 million on IT contracts this fiscal year.

The IRS commissioner said Lois Lerner’s emails could not be retrieved due to a hard drive crash. However, records show his agency has spent tens of millions of dollars in contracts with at least two companies for information retrieval systems and a forensics program touted as securing and maintaining the integrity of data.

The IRS contracted with Unisys Corporation for $11.8 million, which included $4 million for “critical operation and maintenance of the files informational retrieval system” and $4.9 million for what the contract describes as “critical-exercise files information retrieval system (Exfirs) Operations and Maintenance.”

The agency also awarded a total contract worth $5.9 million to Immixtechnology Inc. in 2010 for what was described as an “encase enterprise forensics suite.”

The company website says the “EnCase® platform provides the foundation for government, corporate and law enforcement organizations to conduct thorough and effective computer investigations of any kind, such as intellectual property theft, incident response, compliance auditing and responding to eDiscovery requests – all while maintaining the forensic integrity of the data.”

The Free Beacon found other government agencies, including the Federal Bureau of Investigation, have hired Immixtechnology for its expertise.

Records show several IT contracts awarded run in the tens of millions of dollars. They include a $47 million contract for an IBM ESSO order that was signed in December 2013 and a $44 million contract for what was described as “critical functions/IBM software subscription.” Another contract for $27.6 million was awarded for IT/telecom, and still another contract awarded for IT for $58.5 million.

The IRS also contracted with Chicago-based Softchoice Corporation for ADP software; that contract amounted to $108 million. Records show the contract was signed in March of 2010 and completed in December 2012 – the time frame during which Lerner’s emails were lost.

Softchoice is a leader in electronic storage. This year the company was named as “Top US Storage Growth Partner of the Year.”

The IRS explains on its website requirements for taxpayers to maintain records, including electronic records – which includes “databases, saved files, email, instant messages, faxes, and voice messages.”

“It’s important to note that the same timeframes that apply for keeping paper records apply to electronic records. Generally, that’s until the statute of limitations for the tax return the records relate to has expired. It’s normally three years from the due date of the return, or the date the return was filed – whichever is later,” the IRS states.

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Infernal Revenue Service Cancelled Contract With Email-Storage Firm Weeks After Lerner’s Computer Crash

IRS Cancelled Contract With Email-Storage Firm Weeks After Lerner’s Computer Crash – Daily Caller

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The Internal Revenue Service (IRS) cancelled its longtime relationship with an email-storage contractor just weeks after ex-IRS official Lois Lerner’s computer crashed and shortly before other IRS officials’ computers allegedly crashed.

The IRS signed a contract with Sonasoft, an email-archiving company based in San Jose, California, each year from 2005 to 2010. The company, which partners with Microsoft and counts The New York Times among its clients, claims in its company slogans that it provides “Email Archiving Done Right” and “Point-Click Recovery.” Sonasoft in 2009 tweeted, “If the IRS uses Sonasoft products to backup their servers why wouldn’t you choose them to protect your servers?”

Sonasoft was providing “automatic data processing” services for the IRS throughout the January 2009 to April 2011 period in which Lerner sent her missing emails.

But Sonasoft’s six-year business relationship with the IRS came to an abrupt end at the close of fiscal year 2011, as congressional investigators began looking into the IRS conservative targeting scandal and IRS employees’ computers started crashing left and right.

Sonasoft’s fiscal year 2011 contract with the IRS ended on August 31, 2011. Eight days later, the IRS officially closed out its relationship with Sonasoft in accordance with the federal government’s contract close-out guidelines, which require agencies to fully audit their contracts and to get back any money that wasn’t used by the contractor. Curiously, the IRS de-allocated 36 cents when it closed out its contract with Sonasoft on September 8, 2011.

Lois Lerner’s computer allegedly crashed in June 2011, just ten days after House Ways and Means Committee chairman Rep. Dave Camp first wrote a letter asking if the IRS was engaging in targeting of nonprofit groups. Two months later, Sonasoft’s contract ended and the IRS gave its email-archiving contractor the boot.

IRS official and frequent White House visitor Nikole Flax allegedly suffered her own computer crash in December 2011, three months after the IRS ended its relationship with Sonasoft.

Here’s a Sonasoft commercial re-enacting how the company quickly and thoroughly saves its clients’ emails after computer crashes:

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Related video:

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Infernal Revenue Service Destroyed Hard Drive Lois Lerner Used At Time Of Tea Party Targeting

IRS Destroyed Hard Drive Lois Lerner Used At Time Of Tea Party Targeting – Daily Signal

Lois Lerner’s missing emails are likely gone forever because the Internal Revenue Service destroyed the hard drive she used at the time tea party groups were targeted, according to sources on Capitol Hill.

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“We’ve been informed that the hard drive has been thrown away,” Sen. Orrin Hatch, R-Utah, told Politico. Two other sources confirmed Hatch’s account.

The news brought a swift response from Darrell Issa, R-Calif., chairman of the House Committee On Oversight and Government Reform. In a statement late last night, Issa said:

If the IRS truly got rid of evidence in a way that violated the Federal Records Act and ensured the FBI never got a crack at recovering files from an official claiming a Fifth amendment protection against self-incrimination, this is proof their whole line about ‘losing’ emails in the targeting scandal was just one more attempted deception. Old and useless binders of information are still stored and maintained on federal agency shelves; official records, like the e-mails of a prominent official, don’t just disappear without a trace unless that was the intention.

The latest revelation sets the stage for what is expected to be a contentious hearing Friday when IRS Commissioner John Koskinen is scheduled to appear before the committee. In March, the commissioner assured the Oversight and Government Reform Committee the IRS would comply with the request to turn over the emails as congressional investigators probed Lerner’s involvement in the scandal.

>>> IRS in March: ‘We’re Working Very Hard to Get You the Lois Lerner Emails’

As part of Issa’s latest subpoena, he asked the IRS to turn over “all hard drives, external drives, thumb drives and computers” and “all electronic communication devices the IRS issued to Lois G. Lerner.”

Lerner, who was held in contempt of Congress for her refusal to cooperate, was director of the IRS’ tax-exempt office at the time tea party groups faced delays and additional scrutiny in their applications to the IRS. Last week, the IRS revealed it had “lost” an email messages from a period between January 2009 through April 2011 because of a computer crash.

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Infernal Revenue Service “Lost” Emails From Official Who Met Repeatedly With Top Obama Assistant

IRS ‘Lost’ Emails From Official That Met With Top Obama Assistant – Daily Caller

An IRS official whose emails were “lost” visited the White House frequently during the agency’s targeting of conservatives and met with a top assistant to President Obama who exchanged confidential information on conservative groups with the IRS.

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The IRS recently claimed that it lost emails from Nikole Flax, who served as chief of staff to former IRS commissioner Steven Miller. Flax was one of seven IRS employees including ex-official Lois Lerner whose emails to and from White House officials and other Obama administration agencies were purportedly deleted and could not be handed over to congressional investigators.

Flax held personal meetings with a top assistant to President Obama and also colluded with Lerner to prosecute conservative activists.

Flax made 31 visits to the White House between July 12, 2010 and May 8, 2013, according to White House visitor logs. Flax’s visits started in the early days of the IRS targeting program and ended just two days before the IRS scandal broke on May 10, 2013.

Flax met twice in the Eisenhower Executive Office Building with deputy assistant to the president for health policy Jeanne Lambrew, on Oct. 5, 2012 and Jan. 15, 2013.

Who is Jeanne Lambrew?

As The Daily Caller reported, Lambrew exchanged confidential taxpayer information on conservative groups with IRS official Sarah Hall Ingram in 2012 as the White House tried to figure out how to deal with a lawsuit filed by a religious organization fighting Obamacare’s contraceptive mandate. Lambrew also hosted 155 of Ingram’s 165 White House visits.

Lambrew, who started working for Obama as a health policy adviser to the then-senator’s 2008 presidential campaign, is identified as the most powerful official within the White House on Obamacare implementation.

Flax, who also met frequently at the White House with Obamacare architect Zeke Emanuel, also exchanged emails with Lerner that implicated Flax in the conservative targeting.

On May 8, 2013, the day that Flax made her last recorded White House visit, Lerner sent Flax an email asking for advice about a plan to coordinate with the Department of Justice to criminally prosecute conservative activists.

“I think we should do it,” Flax replied on May 9. “also need to include CI [Criminal Investigation Division], which we can help coordinate. Also, we need to reach out to FEC [Federal Election Commision]. Does it make sense to consider including them in this or keep it separate?”

The IRS’ loss of Flax’s emails drew unprecedented scorn from congressional investigators.

“Despite their attempt to bury the missing Lerner emails on page 15 of a 27 page letter that arrived late Friday, we now know documents from other central figures, like Nikole Flax, are missing,” House Ways and Means Committee chairman Rep. Dave Camp and committee member Rep. Charles Boustany said in a statement. “The fact that Ms. Flax was a frequent visitor to the White House and the Eisenhower Executive Office Building only raises more questions. Who was she visiting at the White House and what were they talking about? Was she updating the White House on the targeting or was she getting orders? These are answers we don’t yet have, because — surprise, surprise — a few computers crashed. Plot lines in Hollywood are more believable than what we are getting from this White House and the IRS.”

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Infernal Revenue Service Paid Out Up To $15.6 Billion In Tax Credits To Ineligible People

IRS Paid Out Billions In Tax Credits To Ineligible People – Big Government

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The Internal Revenue Service issued up to $15.6 billion in tax credits to people who weren’t eligible for them, about a quarter of the total credits they issued of that type, according to a new inspectors general report.

According to the Treasury Inspector General for Tax Administration (TIGTA), in FY 2013 the IRS improperly paid out between $13.3 billion and $15.6 billion worth of EITC, or between 22 to 26 percent of total EITC payments.

Earned Income Tax Credits are benefits available to low to moderate income earners, which can reduce the amount a taxpayer may owe the IRS and may also provide a refund.

The IRS and TIGTA considers an improper ETIC payment to be one that should not have been made, was made in an incorrect amount, or provided to an ineligible recipient.

The level of improper payments has been a perennial problem for the IRS. Since 2003 the percentage of improper payments has not dipped below 21 percent. In that timeframe the IRS has paid out a total of more than $148 billion in improper EITC payments.

Indeed the Office of Management and Budget considers the EITC to be a high-risk program for these types of problems. It is IRS’ only such high-risk revenue program. And this year still, TIGTA concluded that the IRS has not made much progress in reducing improper payments of this kind.

The findings came in a review of the IRS compliance with the Improper Payments Elimination and Recovery Act of 2010 (IPERA), which requires federal agencies to estimate improper payments if they are “significant.”

“The intent of this law is to help ensure that the Government serves as a responsible steward for the tax dollars it collects. As noted in previous TIGTA reports, the IRS can and must do more to protect taxpayer dollars from waste, fraud, and abuse,” J. Russell George, the Treasury Inspector General for Tax Administration, said in a statement.

TIGTA did not make any recommendations in its report, but noted that the IRS has indicated that it is working with the Treasury Department and OMB to develop more ways to come in compliance with the IPERA.

Click HERE For Rest Of Story

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Infernal Revenue Service Attempting To Regulate Political Speech

Now The IRS Wants To Regulate Political Speech – Yid With Lid

As if the IRS targeting of conservative 501(C)(3) applications wasn’t enough, now the tax collection/health insurance police arm of the federal government wants to go further in their governance of political speech.

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According to the WSJ the proposed rules will restrict:

The ability of certain tax-exempt nonprofits, organized under Section 501(c)(4) of the Internal Revenue Code, to conduct nonpartisan voter registration and voter education. Such organizations would be forbidden to leave records of officeholder votes and public statements on their websites in the two months before an election.

The Journal of Philanthropy contends that IRS intends to expand the bans from the social welfare oriented 501(C)(4), to the issue oriented advocacy 501(C)(3)

While the rules would apply only to social-welfare groups, which are classified under Section 501(c)(4) of the tax code, the IRS said it wanted the public to comment on whether similar rules should by applied to charities, which are governed by Section 501(c)(3).

Even if the rules weren’t officially extended to charities, the measures would affect them: Many charities have social-welfare arms that allow them to be more directly involved in political campaigns than they otherwise could be under the law.

The proposal’s limits on political activities such as get-out-the vote efforts and candidate debates are a “threat to basic grass-roots organizing” that nonprofits engage in to influence lawmakers on issues and inform the public, said Diana Aviv, president of Independent Sector, an umbrella group of nonprofits and charitable foundations.

This is nothing more than another Obama administration attempt to restrict political speech. Having been caught trying to suppress the speech tea party groups in the recent scandal, they are looking for a different way. According to the Journal:

Why is the IRS regulating political activity at all?

The answer is that many Democratic politicians and progressive activists think new rules limiting political speech by nonprofits will benefit Democrats politically. Stymied by judicial decisions restricting direct government regulation of political speech, and by a Federal Election Commission whose bipartisan makeup prevents Democratic commissioners from forcing through partisan rules on a party-line vote, these politicians and activists have decided to dragoon the IRS into doing their work.

Even Common Cause, a liberal group believes this is an attempt to silence political critics.

Here is what is really going on, before 2010 the 501(c)(4) category was dominated by the political left, since then organizations that were more conservative began using the 501(c)(4) category to engage in public education as well as political activity so now the administration wants to protect its flank by scuttling the political and voter information efforts of the entire category.

The targeting of Tea Party groups proves that the power of the IRS needs to be reduced rather than expanded. This potential power grab by the IRS should make all Americans very frightened about the future of our guaranteed freedoms.

Click HERE For Rest Of Story

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Key Names Added To ACLJ Lawsuit Against Infernal Revenue Service

Key Names Added To Lawsuit Against IRS – WorldNetDaily

Several Internal Revenue Service executives, those who wielded great authority and are now accused of targeting conservatives because of their faith and political perspectives, have been added to a lawsuit over the discrimination and harassment that resulted from their political use of the tax agency.

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The announcement comes from the American Center for Law and Justice, which earlier sued the government on behalf of dozens of conservative organizations that applied for tax-status with the IRS, but saw those applications delayed and or denied because of their beliefs.

The key individuals within the IRS, those who allegedly used their authority in the campaign against the conservatives, include former IRS Commissioner Douglas H. Shulman, IRS Chief Counsel William Wilkins, former Tax Exempt Division chief Sarah Hall Ingram, Tax Exempt Division Commissioner Joseph Grant, acting manager Michael Seto and senior technical advisers Nikole Flax and Judith E. Kindell.

They are being sued as individuals, as well as in their official capacities.

The action brought by the ACLJ explains that the evidence shows there was a “politically motivated attack on conservative organizations by the IRS – a secret and illegal targeting campaign – aimed at the organizations because of their political beliefs.”

“The intimidation campaign conducted by the IRS is much more politically motivated and coordinated than previously thought,” said Jay Sekulow, chief counsel of the ACLJ.

Its lawsuit is believed to be the largest of its kind against the IRS, involving 41 different organizations targeted by the IRS.

“We now know that President Obama through his public comments initiated actions that resulted in the unlawful targeting of our clients – a self-induced unconstitutional act. In addition to the president’s remarks, congressional Democrats along with the media created a climate of hostility – making it impossible for our clients to exercise their First Amendment freedoms,” Sekulow said.

“This hostile climate set the stage for the unprecedented illegal targeting by the IRS. The Obama administration and the IRS objected to the conservative message of our clients which resulted in the unlawful and unconstitutional scheme to keep our clients on the sidelines – out of the political debate. This filing strengthens our case and underscores our commitment to holding those responsible for this scheme accountable.”

Americans already hated the IRS, so how could anything damage its reputation? Read this special Whistleblower magazine issue to find out.

The lawsuit originally was filed in May and this amended complaint brings on as defendants those individuals who were in positions of authority over the Obama administration’s campaign against the conservative groups.

“The facts of this case reflect a course of conduct by a faction of the United States government that would make the Founders weep and which should outrage every American,” the complaint contends. “The defendants, acting in their official and/or individual capacities, have, based upon their constituencies or benefactors, obstructed other law abiding citizens from freely associating together and giving voice to their beliefs. This deprivation occurred solely and unconstitutionally based on the perceived beliefs of those citizens whose rights have been deprived.”

The amended complaint also adds an additional claim for violation of the Administrative Procedure Act, and it blames the White House, congressional Democrats and the media for pressuring the IRS to attack conservatives.

It alleges as early as 2010, “Obama joined what the IRS and the Democrat members of Congress had already started: a relentless campaign to stifle the free speech of those protesting his and Democrats’ policies and the direction of the federal government.”

The IRS response was to engage “in a campaign of unlawful targeting.”

Of the 41 groups that are plaintiffs, 22 got tax-exempt status after lengthy delays, 12 still are pending and five gave up because of frustration over the IRS process. Two had their files closed by the IRS because they refused to answer unconstitutional demands for private information, the ACLJ said.

The IRS discrimination has been well-documented. One IRS official pleaded the Fifth and declined to respond to questions from Congress, but others in the agency have admitted to cases cited by conservative groups who were told, for example, they had to reveal the content of members’ prayers or make promises about what they would or would not say.

The attacks started before the 2012 presidential election and limited the effectiveness of nearly 500 activist organizations as Barack Obama and his liberal agenda rolled to victory.

The lawsuit against the IRS alleges that the Obama administration has been violating the First and Fifth Amendments to the U.S. Constitution and breaking the Administrative Procedure Act in addition to violating various rules and regulations.

It asks that the court issue a declaratory judgment that the IRS “unlawfully delayed and obstructed the organizations’ applications” for tax status determinations.

And it alleges those actions were based on unconstitutional standards and “impermissibly disparate treatment.”

Further, the legal claim asks for an injunction to protect the groups and their officers and directors from further IRS abuse.

The IRS also has faced criticism over lavish spending at conventions, shady contracts, actual censorship of targeted groups, a real “enemies list” and the exposure of thousands of taxpayers’ personal Social Security numbers.

In an editorial headlined “Obama’s fingerprints all over IRS tea party scandal,” for Fox News, Sekulow charged, “A president singling out citizens groups for targeting and intrusive questioning merely because he dislikes their message and fears their political influence? Now that is a ‘threat to democracy.’”

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Infernal Revenue Service Funneling Billions Of Tax Dollars To Illegal Aliens

Glitch?: IRS Funnels Billions To Illegal Aliens – Canada Free Press

While many conservative organizations seeking tax exempt status were singled out for extra scrutiny by the IRS, a commensurate level of calculated disinterest was demonstrated with regard to illegal aliens. A bombshell report, “Paying Illegals to Stay” written by Center for Immigration Studies (CIS) fellow David North reveals that the Treasury has paid out a whopping $4.2 billion to the families of illegal aliens.

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“This particular paying-the-illegals-to-stay pattern revolves around the Additional Child Tax Credit (ACTC), which is not so much a tax credit as it is an income-transfer program for low-income families, offering up to $1,000 per child to all resident families, including those of illegal aliens,” North explains.

Unsurprisingly, the evolution of the abuse came about courtesy of what North refers to as a “fuzzy minded” Congress, which could have mandated that ACTC benefits, like Earned Income Tax Credits (EITC), could only be granted to people with valid Social Security Numbers (SSNs).

Instead, in 1996, as part of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), Congress determined that no federal “grant or benefit” could be given to illegals—even as they failed to define the terms. Subsequently, the decision as to what those terms meant became one for the executive branch of government (in this case the IRS) to make.

At some point the IRS decided completely on its own, “at a modest level of the IRS hierarchy,” according to North, that giving ATCTs to illegals was not a problem. “I’ve been in government and I know kind of how these things work out. It struck me that [GS-]15s, 16s, got together at some point and decided this is how we should handle it, and it stuck,” North told the Washington Times.

Individual Tax Identification Number

As a result, 1996 was the same year the U.S. Treasury introduced the Individual Tax Identification Number (ITIN). This nine-digit tax-processing number is assigned by the IRS to individuals who are obligated to file a federal tax return, but who lack or are ineligible for a SSN typically required to file taxes.

ITIN numbers can only be issued to those who submit a Form W-7, along with documents that establish both the identity and the foreign status of the individual. Prior to their validation, those documents were supposed to be reviewed at the IRS processing center in Austin, TX, where they have a fraud unit. Yet the IRS allowed other service centers with far less rigorous standards to process the documents. Moreover, standards become even less rigorous when an applicant decides to obtain ITINs for his children, nieces and nephews. And as North reveals, once an ITIN “has been issued, there seems to be little, if any, attempt to question the filer’s eligibility for ACTC benefits, so the refunds keep flowing.”

They might have kept flowing indefinitely were it not for the outstanding efforts of Bob Segall, a senior investigative reporter for WTHR-TV in Indianapolis. Running his first report on the scam on April 26, 2012, Segall related the story told to him by an anonymous Indiana tax consultant. The consultant revealed that several returns filed by illegal aliens were successfully claiming ACTC tax refunds of as much as $1000 for as many as a dozen dependents. “Here’s a return right here: we’ve got a $10,300 refund for nine nieces and nephews,” he said. “We’re getting an $11,000 refund on this tax return. There’s seven nieces and nephews,” he added, pointing to another set of documents. “I can bring out stacks and stacks. It’s just so easy it’s ridiculous.”

Segall tracked down a single illegal alien living at a southern Indiana home used by four more illegals who didn’t live there. Despite that reality, those workers claimed 20 children as dependents – and the IRS sent them checks totaling $29,608.

After that, the dam broke at the Austin servicing center, where workers told Segall that management was interested in the quantity, not the quality, of returns processed. The processing of documents written in foreign languages, and the IRS’s willingness to accept notarized photocopies of original documents also facilitated the fraud.

72 percent of tax returns filed using ITINs sought the child tax credit

North notes the other hero of this story is Treasury Inspector General (IG) J. Russell George. “The magnitude of the problem has grown exponentially,” George said at the time, and issued audit reports to back up his statement. The 2011 report revealed the upward trend: in 2005, the IRS paid out $924 million on ACTC claims. In 2010, illegal aliens collected $4.2 billion, more than quadruple the previous amount. The report also revealed that the number of illegal aliens who used the tax credit skyrocketed from 796,000 filers in 2005, to 1.5 million in 2008, and 2.3 million in 2010. For perspective sake, the report explained that 72 percent of tax returns filed using ITINs sought the child tax credit, compared to only 14 percent of non-ITIN filers seeking the same credit.

With the spotlight trained on them, the IRS made some changes to the system: only original comment and certified copies by the issuing authority can be used to process ITIN applications; ITIN numbers will expire after five years; quality not quantity is now emphasized at processing centers; and new review procedures have been instituted.

North notes these changes produced concrete results, with both an increase in the number of rejections, as well as a decrease in the total number of applications sent to the IRS.

Unfortunately, the remedy is a half-hearted solution at best. In typical bureaucratic fashion, the IRS reforms only addressed the problems moving forward. Those already scamming the system – and continuing to do so – will be unaffected.

North notes the IRS could at least go after “low-hanging fruit,” and the examples of such are mind-boggling. He reveals that a single address in Atlanta, GA had 23,994 ITIN-related tax refunds sent to it. In another instance, 8,393 ITIN refunds were deposited into a single bank account. He further notes the IG’s report revealed that three towns “all small ones in labor-intensive agricultural areas,” had a highly disproportionate number of ITIN application relative to the general population.

In Thermal, CA, there were 67 assigned ITINs that received $402,000 in refunds, mailed to 95 addresses, in a town with a total population of 2,825. In Parksley, VA, 100 assigned ITINs received $163,711 in refunds mailed to 48 addresses in a town of 847. In Frankford, DE, 627 assigned ITINs received a total of $712,004 in refunds mailed to 183 addresses—in a town of only 862 people.

North personally visited Frankford and Parksley. Frankford officials demonstrated no awareness of the problem, or any interest in dealing with it. In Parksley, the woman running a one-woman post office operation told North he was not the first person to ask about the problem, but wouldn’t tell him who else did. Of the three tax preparers listed in the White Pages, one was aware of the problem, but blamed it on one of the other two.

North summed up his experience. “What I found, briefly, was this: that some unknown segment of the government (probably either the IRS or the postal inspectors) was active in one location, but apparently not in the other; that the IG’s office had not made any obvious effort to share its (partially redacted) story with local authorities; and that while people were polite to me and mildly interested in my story, there did not seem to be any deep, underlying concern about the presence of illegal aliens in their midst.”

After the 2011 IG report was issued, Republicans in Congress attempted to address the problem. Rep. Sam Johnson (R-TX) introduced HR 1956: Refundable Child Tax Credit Eligibility Verification Reform Act. The bill would require individuals to produce a Social Security number in order to claim “the refundable portion of their child tax credit.” It died on May 24, 2011.

Meanwhile, the IRS continues to maintain that it does not have the authority to prevent illegal aliens from getting fraudulent tax refunds. It further contends it lacks the legal authority to deny claims, even when they fail to include documents showing the children actually live in the United States. That would be the same IRS whose scrutiny of conservative organizations seeking tax exempt status was meticulous at best, and illegal at worst. It is precisely those warped priorities that have many Americans wondering if the agency should be abolished altogether. When the IRS is “paying illegals to stay,” it might be an idea whose time has come.

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Infernal Revenue Service Surveilled Tea Parties As Recently As Two Weeks Ago

IRS Surveilled Tea Parties Until Two Weeks Ago – Pajamas Media

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This news emerged from Wednesday’s House hearing on the IRS abuse scandal. Not only did the agency target conservative groups, it continued surveillance of them until acting Commissioner Danny Werfel shut it down just two weeks ago.

Republicans investigating the IRS targeting scandal said Wednesday that the agency continued to conduct secret surveillance on tea party groups even after approving them for tax-exempt status.

Acting Commissioner Danny Werfel said he shut down the monitoring program after he found out about it, and said he has halted all audits of tax-exempt organizations based on political activity as he tries to get a handle on the embattled agency.

Mr. Werfel, who was tapped four months ago to clean up the Internal Revenue Service after the targeting came to light, also told Congress he is troubled by emails sent by Lois G. Lerner, the woman at the center of the targeting scandal, that raise questions about her behavior. He said he has asked internal investigators to follow up on those emails.

“There are certain documents that raise questions, and when I looked at them I thought they raised questions,” Mr. Werfel said. “The ones that I thought raised questions I provided directly to [the inspector general], and I also provided them to the accountability review board within the IRS, which is set up to review this matter to see what actions may warrant personnel action or discipline.”

In one of those emails Ms. Lerner wrote that dealing with tea party applications was “very dangerous,” and in another she seemed to indicate that she was looking for ways to deny the charitable organization label to groups without having to accuse them of political activity.

Lerner remains unwilling to testify, and on paid leave from her post at the IRS.

The investigation has also turned up evidence that the IRS targeted Tea Party groups because agents knew that President Obama wanted them to.

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Infernal Revenue Service Gave Black Nonprofits Preferential Treatment

IRS Gave Black Nonprofits Preferential Treatment – Investor’s Business Daily

At the same time the IRS harassed Republican nonprofit groups during the 2012 political campaign, it selectively advised black churches and other Democrat nonprofits on how far they can go in campaigning for President Obama and other Democrats.

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This raw exercise in political favoritism has not been reported in the context of the still-smoldering IRS scandal, in which the agency in 2012 audited big GOP donors and blocked Tea Party groups trying to obtain tax-exempt status as part of what House investigators suspect was an effort to re-elect the president.

But that same year, top officials with both the IRS and Justice Department – including the IRS commissioner and attorney general – met in Washington with several dozen prominent black church ministers representing millions of voters to brief them on how to get their flocks out to vote without breaking federal tax laws.

The “summit” on energizing the black vote in houses of worship was hosted by the Democrat-controlled Congressional Black Caucus inside the U.S. Capitol on May 30, 2012.

The day before the special IRS training session, then-Black Caucus Chairman Rep. Emanuel Cleaver predicted Obama would get 95% of the African-American vote – but only if black pastors “encourage” them to get to the polls. (He ended up getting over 93% of the black vote.)

IRS Goes To Church

At the time, many African-Americans were unhappy that Obama came out in support of gay marriage. So Democrats gathered them in Washington for a “pep talk,” which included assurances their tax exemption would be safe if they helped deliver the vote.

It’s not clear if the White House helped organize the unusual event, but two key Cabinet members – Attorney General Eric Holder and IRS Commissioner Douglas Shulman – both spoke at length to the black church leaders.

Joining them was senior IRS official Peter Lorenzetti, who runs the agency’s tax-exempt organizations division. He gave a technical briefing in which he advised against endorsing from the pulpit any candidates by name or distributing voter cheat sheets.

Then Lorenzetti hastened to add: “It is important to note, however, that an organization exempt under 501(c)3 – in this case the church or a religious organization – can conduct educational election activities,” including holding political debates or even inviting candidates to speak to congregants.

Get-out-the-vote activities also are allowed, including driving church members to polls and knocking on doors to register people to vote.

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Infernal Revenue Service Continues To Hound Tea Party Patriots

IRS Continues To Hound Tea Party Patriots, Demands More Data For Tax-Exempt Status – Washington Times

The initial firestorm surrounding the Internal Revenue Service’s targeting of conservative groups may have subsided, but tea party leaders say the situation has only become worse and may lead to more lawsuits against the embattled agency.

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New documents show the depth of information the IRS is seeking from Tea Party Patriots, a leading conservative group that first applied for 501(c)(4) tax-exempt status in late 2010 and one of many organizations singled out for extra scrutiny by the Obama administration.

An IRS letter sent to the group last week and obtained by The Washington Times contains a laundry list of requests related to virtually all the group’s activities, including its involvement in the 2012 election cycle and its get-out-the-vote efforts, fundraising activities, all radio and TV advertising, and other information.

The IRS also is asking for detailed financial records, including “the amounts and percentages of your total expenses that were for fundraising activities in the tax year 2011, 2012 and 2013.”

The Aug. 20 request came as a shock to Tea Party Patriots, which said it already has provided to the IRS extensive information on all of its activities and thinks it is long past time to receive a “yes” or “no” answer.

The letter also is proof that, while President Obama and other liberals have referred to the situation as a “phony scandal,” conservative organizations still are targets, said Cleta Mitchell, a Washington, D.C., lawyer representing the Tea Party Patriots and several other conservative groups.

“This is tantamount to an audit. This is the continuation of the same thing they’ve been doing for four years. They have not stopped,” she said Thursday. “Tea Party Patriots has responded to all of the requests of the IRS to date, but that has gotten us nowhere. They just keep asking more questions. We are now looking at potential legal remedies, but that’s not easy. Congress has made it quite difficult to sue the IRS.”

The letter, according to the IRS, is simply an attempt to gather information necessary for the agency to determine whether the Tea Party Patriots is eligible for tax-exempt status under current law. Meeting the tax-exempt criteria requires that a group’s “primary” function and activities not be political in nature.

Since news of the IRS targeting scandal broke this spring, the agency also argues that it has made significant progress in sifting through a backlog of groups – including the Tea Party Patriots – that have been waiting years for a decision.

As of last week, the IRS said, it has closed 64 percent of outstanding cases and approved 65 of 85 organizations for 501(c)(4) status.

But for the groups still awaiting approval, last week’s letter represents nothing more than a delaying tactic, said Jenny Beth Martin, president and co-founder of the Tea Party Patriots.

Reviewing information on the group’s activities in the 2012 election cycle pushes an IRS decision even farther down the road. It also raises the possibility that the organization’s future efforts, including in the upcoming 2014 political contests, also will be subject to detailed review as part of a never-ending approval process.

“What that letter said to me is, ‘We got away with discriminating against you and we’re not stopping.’ [The letter] comes as a complete surprise,” Ms. Martin said.

On Thursday, the IRS said it couldn’t comment specifically on the Tea Party Patriots case, but did defend its information-gathering efforts and argued that it has made great strides in its tax-exempt approval process.

“There are instances when IRS must seek more information before we can determine if an organization’s application for tax-exempt status meets the necessary legal requirements,” the agency said in a statement. “Effort and care has been taken to limit the number and nature of these follow-up questions to focus only on the information that we need in order to properly evaluate the application.”

The agency also referred back to an Aug. 9 statement from acting IRS Commissioner Danny Werfel, who said that political campaign intervention will be reviewed without regard to specific “labels,” indicating that tea party or other conservative groups no longer will face extra scrutiny.

In its attempts to clear the backlog of agencies awaiting tax-exempt status, the IRS in June – after news of its political targeting had come to light – offered a deal to organizations such as the Tea Party Patriots.

In exchange for agreeing that no more than 40 percent of its “spending and time” would be related to political campaigns, a group’s tax-exempt application would be expedited.

The Tea Party Patriots has yet to accept that deal, and Ms. Martin said it has no intention of doing so.

“I’m being punished because I didn’t take them up on their made-up expedited process,” she said.

Twenty-nine applicants have taken part in that process in recent months, according to the IRS.

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