Tag: IRS

Judge Orders IRS To Turn Over Secret List Of Conservative Groups It Targeted – Accuses Government Of Acting In Bad Faith

Court Rebukes IRS For Tea Party Targeting, Orders Release Of Secret List – Washington Times

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A federal appeals court spanked the IRS Tuesday, saying it has taken laws designed to protect taxpayers from the government and turned them on their head, using them to try to protect the tax agency from the very tea party groups it targeted.

The judges ordered the IRS to quickly turn over the full list of groups it targeted so that a class-action lawsuit, filed by the NorCal Tea Party Patriots, can proceed. The judges also accused the Justice Department lawyers, who are representing the IRS in the case, of acting in bad faith – compounding the initial targeting – by fighting the disclosure.

“The lawyers in the Department of Justice have a long and storied tradition of defending the nation’s interests and enforcing its laws – all of them, not just selective ones – in a manner worthy of the Department’s name. The conduct of the IRS’s attorneys in the district court falls outside that tradition,” Judge Raymond Kethledge wrote in a unanimous opinion for a three-judge panel of the Sixth Circuit Court of Appeals. “We expect that the IRS will do better going forward.”

Justice Department officials declined to comment on the judicial drubbing, and the IRS didn’t respond to a request for comment on the unusually strong language Judge Kethledge used.

The case stems from the IRS‘ decision in 2010 to begin subjecting tea party and conservative groups to intrusive scrutiny when they applied for nonprofit status.

An inspector general found several hundred groups were asked inappropriate questions about their members’ activities, their fundraising and their political leanings.

The IRS has since apologized for its behavior, but insisted the targeting was a mistake born of overzealous employees confused by the law rather than a politically motivated attempt to stifle conservatives.

Tea party groups have been trying for years to get a full list of nonprofit groups that were targeted by the IRS, but the IRS had refused, saying that even the names of those who applied or were approved are considered secret taxpayer information. The IRS said section 6103 of the tax code prevented it from releasing that information.

Judge Kethledge, however, said that turned the law on its head.

“Section 6103 was enacted to protect taxpayers from the IRS, not the IRS from taxpayers,” he wrote.

Edward Greim, a lawyer at Graves Garrett who is representing NorCal Patriots, said they should be able to get a better idea of the IRS‘ decision-making once they see the list of groups that was targeted.

“What we’ll be able to see is how, starting in the spring of 2010, with the first one or two groups the IRS targeted, we’ll be able to see that number grow, and we’ll even be able to see at the tail end their possible covering up that conduct,” he said.

He said they suspect the IRS, aware that the inspector general was looking into the tax agency’s behavior, began adding in other groups to try to muddle the perception that only conservatives were being targeted.

Tuesday’s ruling is the second victory this year for NorCal Patriots.

In January U.S. District Judge Susan J. Dlott certified their case as a class-action lawsuit, signaling that she agreed with NorCal Patriots that the IRS did systematically target hundreds of groups for special scrutiny.

Certifying the class allows any of the more than 200 groups that were subjected to the criteria to join the lawsuit. But until the IRS complies with the appeals court’s ruling this week, the list of those groups is secret.

Now that the class has been certified, the case moves to the discovery stage, where the tea party groups’ lawyers will ask for all of the agency’s documents related to the targeting and will depose IRS employees about their actions.

The lawyers hope they’ll be able to learn details Congress was unable to shake free in its own investigations.

The Justice Department has concluded its own criminal investigation into the IRS and said the targeting was the result of bad management. But investigators said they found no criminal behavior, and specifically cleared former IRS head Lois G. Lerner, saying her fellow employees said she tried to correct the problems when she learned of them.

Republicans dismissed that investigation as a whitewash by the Obama administration.

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Obama Regime Crime Spree Update: IRS Erases Hard Drive Against Judge’s Orders

Chaffetz, Jordan Erupt After IRS Erases Another Hard Drive – Daily Caller

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Leading members of Congress are ripping IRS officials for erasing a computer hard drive after a federal judge ordered it to be preserved.

“The destruction of evidence subject to preservation orders and subpoenas has been an ongoing problem under your leadership at the IRS,” Committee on House Oversight and Government Reform Chairman Jason Chaffetz and Rep. Jim Jordan , wrote in a letter to IRS Commissioner John Koskinen late Thursday.

“It is stunning to see that the IRS does not take reasonable care to preserve documents that it is legally required to protect,” Chaffetz, a Utah Republican, and Jordan, an Ohio Republican, said in the letter to Koskinen.

The IRS recently admitted in court to erasing the hard drive even though a federal judge had issued a preservation related to a Microsoft Freedom of Information Act lawsuit against the federal tax agency last year, according to court documents. Microsoft accuses the IRS of inappropriately hiring an outside law firm to audit it and of failing to hand over related documents requested under the FOIA.

Chaffetz and other members of the oversight panel began calling for Koskinen’s impeachment in October. Chaffetz and Jordan in their letter point out that the IRS in March 2014 also destroyed 422 backup tapes containing as many as 24,000 emails sent or received by Lois Lerner, former director of IRS’ Exempt Organizations Division.

Lerner was the central figure in the scandal sparked by the tax agency’s illegal targeting and harassment of conservative and Tea Party non-profit applicants during the 2010 and 2012 election campaigns.

Samuel Maruca, owner of the hard drive in question and a former senior IRS executive, participated in the IRS hiring of the outside law firm Quinn Emanuel Urquhart & Sullivan LLP allegedly to investigate Microsoft. Maruca left the IRS in August 2014, according to court documents.

Chaffetz and Jordan told Koskinen to hand over all documents on IRS preservation policies and all documents related to the destruction of Lerner and Maruca’s hard drives.

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House Oversight And Government Reform Chairman Introduces Resolution To Impeach IRS Commissioner

Chaffetz Introduces Resolution To Impeach IRS Commissioner – CNS

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House Oversight and Government Reform Chairman Jason Chaffetz (R-Utah) and 18 other members of the House of Representatives introduced a resolution on Tuesday to introduce impeachment proceedings against Internal Revenue Service Commissioner John Koskinen.

According to Chaffetz, “Koskinen violated the public trust” and “failed to comply with a congressionally issued subpoena.” Also, “documents were destroyed on his watch, and the public was consistently misled.”

“Impeachment is the appropriate tool to restore public confidence in the IRS and to protect the institutional interests of Congress,” Chaffetz said in introducing the resolution. “This action will demonstrate to the American people that the IRS is under repair, and signal that Executive Branch officials who violate the public trust will be held accountable.”

Koskinen “failed to act with competence and forthrightness in overseeing the investigation into Internal Revenue Service targeting of Americans because of their political affiliations,” the resolution claimed.

The resolution states that Koskinen “engaged in a pattern of conduct that is incompatible with his duties,” specifically, by failing “to comply with a subpoena resulting in destruction of key evidence.” He “failed to locate and preserve IRS records in accordance with a congressional subpoena and an internal preservation order,” it stated.

The resolution also accuses Koskinen of failing to “testify truthfully” and of providing “false and misleading information” as well as failing “to notify Congress that key evidence was missing.”

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Most Corrupt DOJ In History Refuses To Prosecute Obviously Guilty Lois Lerner Over IRS Targeting Of Conservatives

Lois Lerner Will Not Face Charges In Department Of Justice Investigation – Washington Times

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The IRS did mishandle tea party and conservative groups’ nonprofit applications, but their behavior didn’t break any laws, the Justice Department said in a letter to Congress Friday that cleared the tax agency and former senior executive Lois G. Lerner of any crimes.

“Ineffective management is not a crime,” Assistant Attorney General Peter J. Kadzik said in a letter to the House Ways and Means Committee. “The Department of Justice’s exhaustive probe revealed no evidence that would support a criminal prosecution. What occurred is disquieting and may necessitate corrective action – but it does not warrant criminal prosecution.”

The decision comes more than two years after the IRS’s internal watchdog reported that auditors singled out tea party groups’ applications for special scrutiny and delayed those applications beyond reasonable timelines, preventing the groups from being able to say they were officially recognized nonprofits.

The agency initially admitted its bad behavior, and President Obama vowed an investigation – but he later said, in the middle of the probe, that there was no evidence of corruption.

Some Republicans have questioned the validity of the probe from the beginning, after learning that one of the Justice Department lawyers assigned to the investigation was a contributor to Mr. Obama’s political campaigns.

In its letter Friday the Justice Department specifically cleared Ms. Lerner, a senior executive in charge of approving the groups’ applications, who had authored a number of emails that suggested a bias against the tea party movement.

Investigators said none of the witnesses they interviewed believed Ms. Lerner acted out of political motives, and said that Ms. Lerner seemed to try to correct the inappropriate scrutiny once she “recognized that it was wrong.”

“In fact, Ms. Lerner was the first IRS official to recognize the magnitude of the problem and to take concerted steps to fix it,” Mr. Kadzik wrote.

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Leftist Corruption Update: Federal Judge Orders IRS To Disclose White House Requests For Taxpayer Information

Federal Judge Orders IRS To Disclose WH Requests For Taxpayer Info – Washington Free Beacon

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A federal judge on Friday ordered the Internal Revenue Service to reveal White House requests for taxpayers’ private information, advancing a probe into whether administration officials targeted political opponents by revealing such information.

Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia rejected the IRS’s argument that a law designed to protect the confidentiality of such information protected the public disclosure of such communications with the White House.

The law, 26 U.S. Code § 6103, was passed after the Watergate scandal to protect citizens from retribution by federal officials. Jackson scoffed at the administration’s claims that the statute could be used to shield investigations into whether private tax information had been used in such a manner.

“The Court is unwilling to stretch the statute so far, and it cannot conclude that section 6103 may be used to shield the very misconduct it was enacted to prohibit,” Jackson wrote in her order.

The decision was a victory for Cause of Action, the legal watchdog group that sued the IRS in 2013 seeking records of its communications with the White House and potential disclosure of confidential taxpayer information.

The group called the decision “a significant victory for transparency advocates” in a Friday statement

“As we have said all along, this administration cannot misinterpret the law in order to potentially hide evidence of wrongdoing,” said Dan Epstein, the group’s executive director. “No administration is above the law, and we are pleased that the court has sided with us on this important point.”

The lawsuit came after Treasury’s inspector general for tax administration, the IRS’s official watchdog agency, revealed that it was investigating whether Austan Goolsbee, the White House’s former chief economist, illegally accessed or revealed confidential tax information related to Koch Industries.

The corporation’s owners, Charles and David Koch, are prominent funders of conservative and libertarian groups that often oppose the White House’s policy priorities.

Goolsbee “used Koch Industries as an example when discussing an issue noted in the [President’s Economic Recovery Board] report that half of business income goes to companies that do not pay corporate income tax because they are pass-through entities and that many of them are quite large,” the White House said in 2010.

His apparent knowledge of Koch’s tax history, detailed during a conference call with reporters, “implies direct knowledge of Koch’s legal and tax status, which would appear to be a violation” of federal law, said Sen. Chuck Grassley (R., Iowa), the chairman of the Senate Judiciary Committee, at the time.

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The FBI Considers The IRS And DOJ, Domestic Terrorists (Thad Beversdorf)

The FBI Considers The IRS And DOJ, Domestic Terrorists – Thad Beversdorf

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Eventually it was bound to happen. The ever increasing ambiguous laws that allow the government to prosecute, or worse, simply negate all Constitutional protections of its citizens would come back to hang them. In an unusual circumstance, what is essentially one party in D.C. when it comes to matters of covering up governmental criminality, has split into a two party system. Specifically, a sect of the Republican party known as Tea Partiers pushed unrelentingly to expose the criminality acted upon members of its own tribe by various government agencies.

The Tea Party was formed by a group of individuals around the country who wanted to get back to the ideals of the Constitution i.e freedom. But the Constitution is kryptonite to the system. And so those who organize to promote the Constitution were targeted by the highest levels of government. What better weapon to attack those whose intention is to defend the Constitution than an unconstitutional agency that has essentially unquestioned authority. After all it is always unclear who watches the watchman. Well in this particular case, the FBI and DOJ would seem to have jurisdiction over actions consistent with those of the IRS.

Under the FBI’s own definition of a ‘Domestic Terrorist’ one MUST consider the IRS to be a terrorist organization as evidenced by the very recent discoveries surrounding the IRS’s own actions.

“Domestic terrorism” means activities with the following three characteristics:

* Involve acts dangerous to human life that violate federal or state law;

* Appear intended (i) to intimidate or coerce a civilian population; (ii) to influence the policy of a government by intimidation or coercion; or (iii) to affect the conduct of a government by mass destruction, assassination. or kidnapping; and

* Occur primarily within the territorial jurisdiction of the U.S….”

While the first characteristic seems to imply violence is necessary it should be noted that under the FBI’s definition of ‘International Terrorism’ they explicitly include ‘Violent acts’ within the definition.

“International terrorism” means activities with the following three characteristics:

* Involve violent acts or acts dangerous to human life that violate federal or state law;

* Appear to be intended (i) to intimidate or coerce a civilian population; (ii) to influence the policy of a government by intimidation or coercion; or (iii) to affect the conduct of a government by mass destruction, assassination, or kidnapping; and

* Occur primarily outside the territorial jurisdiction of the U.S., or transcend national boundaries in terms of the means by which they are accomplished, the persons they appear intended to intimidate or coerce, or the locale in which their perpetrators operate or seek asylum.*

The distinction of violence within the international but not domestic definition is surely not an oversight. But by doing so it leaves open the opportunity to define a non violent act to be construed as indirectly dangerous to human life (e.g. Snowden’s actions). But certainly wrongfully putting someone inside a federal prison for tax evasion would be considered dangerous to human life. According to the following revelations through emails obtained via court orders by Judicial Watch (a nonpartisan government watchdog), that is exactly what the IRS, DOJ and FBI were conspiring to do.

“These new documents show that the Obama IRS scandal is also an Obama DOJ and FBI scandal,” said Judicial Watch President Tom Fitton. “The FBI and Justice Department worked with Lois Lerner and the IRS to concoct some reason to put President Obama’s opponents in jail before his reelection. And this abuse resulted in the FBI’s illegally obtaining confidential taxpayer information. How can the Justice Department and FBI investigate the very scandal in which they are implicated?”

On April 16, 2014, Judicial Watch forced the IRS to release documents revealing for the first time that Lerner communicated with the DOJ in May 2013 about whether it was possible to launch criminal prosecutions against targeted tax-exempt entities. The documents were obtained due to court order in an October 2013 Judicial Watch FOIA lawsuit filed against the IRS.

Those documents contained an email exchange between Lerner and Nikole C. Flax, then-chief of staff to then-Acting IRS Commissioner Steven T. Miller discussing plans to work with the DOJ to prosecute nonprofit groups that “lied” (Lerner’s quotation marks) about political activities…”

But it begs the question then again, if the DOJ and FBI are also implicated in the domestic terrorism (according to the FBI’s own definition) who is left to prosecute?

Well it is we the people. It shouldn’t matter if you are Democrat or Republican. We have a clear and identifiable gross abuse of government at the highest levels. The abuse falls under the FBI’s own definition of domestic terrorism, a definition they would not hesitate to use against you or your family if it suited their objectives. And so call it the Golden Rule or Kantian Categorical Imperatives or simple justice, but it is imperative to the people’s rule over its representative governing body to prosecute all involved to the highest levels and to the maximum penalty of the law.

The abuse by those who have been granted incredible powers under the trust of the nation need to be dealt the most severe consequences. Our very response to this matter will underpin the relationship between the people and its government for generations. If we allow such astonishing government abuses, which have now been overtly evidenced and confessed by at least some of the guilty parties, to be lightly dealt with then we blatantly fail to defend every subsequent generation of Americans from ever worse abuses. We fail as Americans. The result of this investigation over the coming months will likely show that we the people have lost all sense of what it means to be an American. That said, I remain doubtingly hopeful that I am proven wrong.

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*VIDEO* Senate Judiciary Committee Hearing On The IRS Targeting Of Conservative Groups (07/29/15)


Subcommittee On Oversight, Agency Action, Federal Rights And Federal Courts
Chairman: Ted Cruz
Witnesses: John Koskinen, Cleta Mitchell, Stephen Spaulding, Edward D. Greim, Lawrence Noble, Toby Marie Walker, Diana Aviv, Jenny Beth Martin, Gregory L. Colvin, Jay Sekulow

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……………………….Click on image above to watch video.
………………— Note: hearing begins at about the 18:45 mark —

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Click HERE to visit the official website of the U.S. Senate Judiciary Committee

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New Emails Provide Smoking-Gun Evidence Of The Coordinated Targeting Of Conservatives And Cover-Up By Obama IRS

Smoking Gun: New Emails Show Coordinated Targeting Of Conservative Groups And Cover-Up By Obama IRS – Dateway Pundit

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The IRS Conservative Targeting Scandal involved:

* Hundreds of conservative groups
* At least 5 pro-Israel groups
* Constitutional groups
* Groups that criticized Obama administration
* At least two pro-life groups
* An 83 year-old Nazi concentration camp survivor
* A 180 year-old Baptist paper
* A Texas voting-rights group
* A Hollywood conservative group was targeted and harassed
* Conservative activists and businesses
* At least one conservative Hispanic group
* IRS continued to target groups even after the scandal was exposed
* 10% of Tea Party donors were audited by the IRS
* And… 100% of the 501(c)(4) Groups Audited by IRS Were Conservative

IRS Commissioner John Koskinentestified before the House Oversight and Government Reform on March 26, 2014. Koskinen told Rep. Jason Chaffetz (R-UT) during the hearing that Lois Lerner’s emails were archived and it would take a long time to retrieve them.

In June 2014 the IRS told Congress Lois Lerner’s emails were lost in a computer crash.

In April the Inspector General notified the Senate Finance Committee that they have recovered thousands of Lois Lerner emails.

In June 2015 the Obama IRS erased 422 computer backup tapes related to the Tea Party scandal.

Earlier this month it was reported the Obama IRS plotted how they could prosecute conservative activist groups.

Now there’s a Smoking Gun –

Newly discovered emails prove the Obama IRS was targeting conservative groups and harassing individuals.

There is evidence of a cover-up and investigators have “Smoking Gun” proof.

The Real Story reported:

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Judicial Watch reported:

Judicial Watch released 906 pages of newly recovered Lois Lerner emails from the IRS that are believed to recently have been recovered by the IRS’ internal watchdog – the Treasury Inspector General for Tax Administration (TIGTA). The IRS released the emails under a court order by U.S. District Court Judge Emmet Sullivan. The new documents show that Lois Lerner and other top officials in the Exempt Organizations Unit of the Internal Revenue Service (IRS), including soon-to-be Acting IRS Commissioner Steve Miller, closely monitored and approved the controversial handling of tax-exempt applications by Tea Party organizations. The documents also show that at least one group received an inquiry from the IRS in order to buy time and keep the organization from contacting Congress.

At July 1, 2015, status conference, Judge Sullivan ordered the IRS to begin producing, every week, the nearly 1,800 newly recovered Lois Lerner emails responsive to Judicial Watch’s Freedom of Information Act (FOIA) request. Despite the court order, the IRS did not produce any Lois Lerner emails until July 15. The IRS also failed to provide Judicial Watch a status report of the Lois Lerner email production issues, as also ordered by Judge Sullivan. Last week, Judge Sullivan ordered sua sponte the parties to appear for a status hearing for tomorrow (July 29) shortly after Judicial Watch raised concerns about the IRS’ failure to comply with his orders to release the newly discovered Lerner emails and status updates on its production of previously “missing” documents.

The developments come in Judicial Watch’s FOIA lawsuit seeking documents about the Obama IRS’ targeting and harassment of Tea Party and conservative opponents of President Obama (Judicial Watch, Inc. v. Internal Revenue Service (No. 1:13-cv-01559)). Judicial Watch’s litigation forced the IRS first to admit that Lerner’s emails were supposedly missing and, then, that the emails were on IRS’ back-up systems.

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Leftist Nightmare Update: IRS Might Not Refund $38M In Overpaid ObamaCare Fines

IRS Might Not Refund $38M Overpaid ObamaCare Fines – Sweetness & Light

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Fines? What fines? Those are ‘shared responsibility payments.’

From the Washington Free Beacon:

300,000 Taxpayers Overpaid Obamacare Fine by $38 Million, IRS May Not Return Money

By Morgan Chalfant | July 15, 2015

Approximately 6.6 million U.S. taxpayers paid a penalty for not having health insurance imposed this year under Obamacare, and hundreds of thousands of them overpaid the fine.

Bloomberg reported Wednesday that the number of taxpayers paying the fine, which was put in place to encourage Americans to enroll in health coverage, exceeded the Obama administration’s initial estimate by 10 percent.

Funny how all of the ‘bad stuff’ about Obama-Care was underestimated. What are the odds?

According to a new report from the National Taxpayer Advocate, an independent organization within the Internal Revenue Service (IRS), the average fine paid by taxpayers was $190. The penalty, however, can reach up to 1 percent of one’s income.

The report also discovered that about 300,000 taxpayers, most of whom should have been deemed exempt because of low income, overpaid the fine by $35 million. The average amount overpaid by each individual was $110.

So Obama-Care even fined the poor. What a surprise.

The IRS has yet to decide whether or not it will return the funds to those who overpaid…

According to the report, approximately 10.7 million U.S. taxpayers filed for exemption from the penalty…

And never mind that most of these people getting exemptions are the very people Obama-Care was supposed to get to pay their ‘shared responsibility.’

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More FOIA Documents Reveal IRS Targeting Stemmed From DOJ And White House

Another Blistering Smidgen Alert; More FOIA Documents Reveal IRS Targeting Stemmed From DOJ And White House – Conservative Treehouse

For more than a year we have been asking a simple question:

“How can the DOJ conduct an investigation into unlawful aspects of the IRS targeting of specific 501(c)(4) groups, when the DOJ is the initiating body for the illegality they are seeking to investigate?” (June 28th, 2014)

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A few days ago Judicial Watch revealed new FOIA discoveries and posed this:

“These new documents show that the Obama IRS scandal is also an Obama DOJ and FBI scandal,” said Judicial Watch President Tom Fitton. “The FBI and Justice Department worked with Lois Lerner and the IRS to concoct some reason to put President Obama’s opponents in jail before his reelection.

And this abuse resulted in the FBI’s illegally obtaining confidential taxpayer information. How can the Justice Department and FBI investigate the very scandal in which they are implicated?” (link)

The entire scheme is riddled with complexity; almost too complex for the average person to understand, and seriously difficult to summarize. However, when you boil it down here’s the essential components that are no longer suspicion or supposition, but factually provable:

As a result of a trillion dollar stimulus filled with scheme and graft; and as a result of Obamacare being similarly schemed in backroom deals and late night votes; President Obama was “shellacked” in the November 2010 election.

The White House didn’t see the defeat a flawed policy issue; rather as the entrenched ideologues they are, they saw the SCOTUS case “citizens united” as the principle tool used by the White House opponents to organize and fund political movements, ie. the tea party.

The Obama Team response to the 2010 Shellacking was to use the Dept. of Justice (AG Eric Holder) to weaponize the IRS and go after groups -like Tea Party Groups- organized under the financial umbrella of 501(c)(4) donation structuring.

Years later, when the scheme was discovered – the White House denied knowledge (“not even a smidgen of corruption”), the DOJ feigned ignorance, and the IRS began working overtime trying to hide the construct of the prior communication, planning and strategy.


* The head of IRS tax exempt division, Louis Lerner, pled the Fifth.
* Obama’s Chief of Staff Jack Lew was made Treasury Secretary (IRS is sub division of Treasury Dept.) where he was/is able to continue hiding information.
* And Eric Holder constructed a team of DOJ lawyers to isolate, hide and manipulate the trail of evidence within the DOJ.

That’s the essence of what took place and where things stand.

Currently the court system is being used to try and penetrate the roadblocks put in place by all of the various agencies scrubbing emails, deleting hard drives, refusing to release public records, and working diligently to protect the White House.

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IRS Commissioner Admits Illegal Aliens Can Get Back Taxes Under Obama’s Executive Amnesty

IRS Finally Admits Illegals Can Get Back Taxes Under Obama Amnesty – Washington Times

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IRS Commissioner John Koskinen has confirmed to Congress that illegal immigrants granted amnesty under President Obama’s new programs could claim back refunds even when they never filed returns to pay their taxes in the first place.

Sen. Chuck Grassley, who had pressed Mr. Koskinen over the issue, released written responses Wednesday in which the commissioner admitted he’d botched the question earlier and, in fact, illegal immigrants granted the amnesty will now be able to claim refunds on tax returns they never even filed, thanks to the Earned Income Tax Credit.

“To clarify my earlier comments on EITC, not only can an individual amend a prior year return to claim EITC, but an individual who did not file a prior year return may file a return and claim EITC (subject to refund limitations under section 6511 of the Internal Revenue Code),” Mr. Koskinen said.

He insisted, however, that he doubts many illegal immigrants will take advantage of the loophole because they would have to be able to prove their earnings for those years they never filed returns.

“Filers would have to reconstruct earnings and other records for years when they were not able to work on the books,” he said.

Taxpayers must have Social Security numbers in order to claim the EITC, and illegal immigrants aren’t supposed to have numbers. But Mr. Obama’s new deportation amnesty grants illegal immigrants work permits, which are then used to obtain Social Security numbers.

IRS lawyers have ruled that once illegal immigrants get numbers, they can go back and refile for up to three previous years’ taxes and claim refunds even for time they were working illegally.

The lawyers said since the EITC is a refundable credit, that’s allowed even when the illegal immigrants worked off the books and never paid taxes in the first place.

“Section 32 of the Internal Revenue Code requires an SSN on the return, but a taxpayer claiming the EITC is not required to have an SSN before the close of the year for which the EITC is claimed,” Mr. Koskinen said. “At your request, the IRS has reviewed the relevant statutes and legislative history, and we believe that the 2000 Chief Counsel Advice (CCA) on this issue is correct.”

Mr. Koskinen had initially said illegal immigrants could claim refunds, but only for years they’d filed returns and presumably had paid some taxes.

Most of Mr. Obama’s amnesty is on hold after federal courts ruled he likely broke the law by acting on his own without Congress‘ approval and without putting his policy out for public review and comment.

But a 2012 policy that applies to so-called Dreamers, or young adult illegal immigrants brought to the U.S. as children, is in effect.

Homeland Security has approved 664,607 initial applications for Dreamers, and approved another 243,872 renewals over the last year, extending the initial two-year amnesty for another two years.

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The IRS Hates Tax Cheats… Unless They Work For The IRS

IRS Gave Promotions To Tax Cheaters: Audit – Washington Times

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The IRS refused to fire most of its own employees found to be cheating on their taxes – and in some cases even quickly turned around and promoted them within the year, according to a new audit released Wednesday.

In about 60 percent of cases of “willful violations” IRS managers found mitigating circumstances and refused to fire the employees, even though the law calls for that penalty. In some of those cases the managers didn’t even document why they’d overridden the penalty, said Treasury Inspector General for Tax Administration J. Russell George.

“Given its critical role in Federal tax administration, the IRS must ensure that its employees comply with the tax law in order to maintain the public’s confidence,” Mr. George said. “Willful violation of the law by IRS employees should not be taken lightly, and the IRS Commissioner should fully document decisions made to retain employees whom management has proposed be terminated.”

During the decade from 2004 to 2013, the IRS identified nearly 130,000 potential cases of tax violations by its own employees, and concluded about 10 percent of those were actual violations. Mr. George said the agency did a good job of spotting those issues.

Of those 13,000 cases, 1,580 were deemed to be intentional cheaters, and they were sent to managers for discipline. But in 60 percent of the cases, the managers refused to fire the employees.

Among the abuses were employees who repeatedly failed to file their returns on time, those who intentionally inflated their expenses and those who claimed the stimulus homebuyer’s tax credit without actually buying a home.

The IRS said its employees have a compliance rate of higher than 99 percent, which is actually much higher than other employers and is tops among all major federal agencies.

“Over ten years, TIGTA found an average of a little more than 150 IRS employees a year committed a willful tax violation. Of the total cases, 620 – or nearly 40 percent – resulted in the employee leaving their position because they were terminated, resigned or retired. Others faced strong disciplinary actions that included terminations, suspensions and reprimands,” the agency said.

The IRS also said it has taken steps to cancel bonuses that would otherwise have been paid to the tax cheats.

“Nonetheless, the IRS agrees that we can improve this process. The changes will include a more proactive approach to ensure timeliness and consistency and provide more transparency in the mitigation process while preserving the commissioner’s authority provided by federal law,” the agency said in its statement.

Of the 1,580 employees deemed to have intentionally cheated on their taxes, 108 of them received no punishment at all. The others were at least admonished, while 25 percent were fired and 14 percent were allowed to resign or retire instead of being fired.

The vast majority of substantiated reports involved “nonwillful” violations. Of those, just 238, or about 1 percent, were deemed serious enough to be fired. Another 1 percent were allowed to retire or resign, 47 percent were admonished, 26 percent were sent to counseling and 14 percent were closed without any punishment.

More than 2,000 employees had multiple red flags during the decade, the inspector general said. Investigators pulled a sample of 15 cases where an employee had repeated intentional violations and found that even there, the majority were allowed to remain on the job.

The inspector general took a sampling of 364 cases of intentional cheaters and found that 108 of them were not only not fire, but were given raises or promotions within a year of being found to be cheating.

Sen. Orrin G. Hatch, chairman of the Finance Committee, which oversees the IRS, said the report was a black mark for the IRS.

“Even worse, the agency appears to have rewarded some of them with cash bonuses, promotions, and paid time off,” the Utah Republican said. “This is unacceptable – American taxpayers deserve better.”

IRS Commissioner John Koskinen, who along with a review board must approve the decision to keep any employees deemed to have intentionally cheated on their taxes, has insisted things at his agency have improved over the last two years, which is when another report from Mr. George exposed that the IRS had singled out tea party groups for special scrutiny in their tax-exempt applications.

Mr. Koskinen has argued that budget cuts have eviscerated morale at the IRS, and he has pleaded with Congress to give him more money to hire staff. He also defended doling out bonuses to employees.

“They are not bonuses. They are performance awards. Over 40, 45 percent of the employees don’t get them. You only get them if you perform,” he said.

But he said he’s taken steps to try to make sure tax cheats don’t get awards.

“Even though we have over 99 percent compliance, I thought it was an important point,” he said.

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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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Leftist Corruption Update: IRS Watchdog Recovers Thousands Of Missing Lois Lerner Emails

IRS Watchdog Recovers Thousands Of Missing Lois Lerner Emails, Reignites Hill Probes – Fox News

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A Treasury Department watchdog has recovered thousands of emails from Lois Lerner and turned them over to Congress, reviving the investigation into the IRS’ targeting of conservative groups.

Lerner was in charge of the IRS division that targeted Tea Party and other groups with conservative-sounding names when they applied for tax-exempt status from roughly 2010 to 2012.

She has since retired, and officials have said that many of her emails are permanently lost because her computer hard drive crashed.

“This underscores that our investigation into IRS abuse is far from over,” a House Ways and Means Committee spokesman said Wednesday. “The committee will thoroughly review these new emails as part of our ongoing efforts to find out exactly what happened and provide accountability.”

The Treasury’s Inspector General for Tax Administration announced overnight that it had recovered roughly 6,400 Lerner emails that Congress has yet to see and that it will examine them as part of Congress’ bipartisan investigation that also includes the Senate Finance Committee.

Roughly 650 of the recovered emails are from 2010 and 2011, while most of them are from 2012.

During those three years, Lerner led the IRS division that targeted Tea Party and other conservative groups applying for tax-exempt status.

The inspector general has found about 35,000 emails in all as it sought to recover emails from backup tapes.

“We welcome the Inspector General’s recovery of these Lois Lerner emails,” the IRS said in response to the IG announcement. “This is an encouraging development that will help resolve remaining questions and dispel uncertainty surrounding the emails.

The agency also pointed out in its response that it has already produced 24,000 emails from 2010 to 2012 and that it has given Congress more than 1.3 million pages of documents related to the investigation, including more than 147,000 emails.”

In addition, the IRS also said it will continue to cooperate with the Inspector General and the congressional committees.

The agency said last year that Lerner’s computer crashed in 2011 and her emails were lost.

Lerner was placed on leave in May 2013 and retired four months later.

“I have not done anything wrong,” Lerner said to Congress in 2013. “I have not broken any laws. I have not violated any IRS rules or regulations. And I have not provided false information to this or any other congressional committee.”

The IRS scandal broke in May 2013 when Lerner said at an American Bar Association gathering and during a follow-up conference call with reporters that there was a “very quick uptick” in nonprofit applications and that the vetting process was limited to the agency’s Cincinnati office.

The extent to which the Obama administration knew about the targeting, beyond Lerner’s unit in Washington, remains unclear in part because, she says, her computer crashed and emails were lost.

Lerner attorney William Taylor recently said he and his client were “gratified but not surprised” by a decision by the U.S. Attorney’s Office not to pursue contempt of court charges against her earlier this month after she refused to testify about her role at the IRS in the targeting of conservative groups. Regarding efforts in Congress to punish her for not testifying, he said: “It is unfortunate that the majority party in the House put politics before a citizen’s constitutional rights.”

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There’s A Reason Why Customer Service At Obama’s IRS Sucks

Report: IRS Deliberately Cut Its Own Customer Service Budget – Weekly Standard

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If you tried to contact the IRS with a question about your taxes this year, chances are you didn’t get a response. The IRS estimated that it would only answer 17 million of the 49 million calls received this filing season. Taxpayers lucky enough to have the IRS answer their calls waited an average of 34.4 minutes for assistance – nearly double the wait time last year (18.7 minutes).

IRS Commissioner John Koskinen has blamed the IRS’s “abysmal” customer service on congressional budget cuts – funding is down $1.2 billion from its 2010 peak – but a new congressional report points the finger back at the IRS. While congressional funding for the IRS remained flat from 2014 to 2015, the IRS diverted $134 million away from customer service to other activities.

In addition to the $11 billion appropriated by Congress, the IRS takes in more than $400 million in user fees and may allocate that money as it sees fit. In 2014, the IRS allocated $183 million in user fees to its customer service budget, but allocated just $49 million in 2015 – a 76 percent cut.

Commissioner Koskinen will appear before the House Ways and Means Committee this morning, one week after the federal tax filing deadline, and he can expect to be asked why the IRS cut its own customer service budget and continues to spend money on other questionable activities.

The report notes that Koskinen reinstated bonuses weeks after his appointment, has allowed IRS employees to spend roughly 500,000 work hours on union activities, and failed to collect delinquent taxes owed by federal employees. The tax agency has also been strained by Obamacare. According to the report, the IRS has spent “over $1.2 billion on the President’s health care law to date, with a planned expenditure this year of an additional $500 million.”

The IRS’s total annual $11 billion budget is dwarfed by the amount of improper tax payments it makes each year. According to the report, the IRS paid out $17.7 billion in improper Earned Income Tax Credit payments (which are supposed to help poor and low-income individuals) and an additional $6 to $7 billion in improper child tax credit payments.

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Tea Partiers Gear Up For Class-Action Lawsuit As Federal Judge Orders IRS To Turn Over List Of Targeted Groups

Federal Judge Orders IRS To Release List Of Tea Party Groups Targeted For Scrutiny – Washington Times

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A federal judge ordered the IRS this week to turn over the list of 298 groups it targeted for intrusive scrutiny as the agency defends against a potential class-action lawsuit by tea party groups who claim their constitutional rights were violated.

The IRS had argued it shouldn’t have to release the names because doing so would violate privacy laws, but Judge Susan J. Dlott, who sits in the Southern District of Ohio, rejected that claim and ordered the tax agency to turn over any lists or spreadsheets detailing the groups that were targeted and when they filed their applications.

Judge Dlott also ordered the IRS to say whether a partial list of targeted groups reported by USA Today is authentic as a number of tea party groups try to win certification for a class action lawsuit against the IRS.

“The return information sought is directly related to the issue of class certification in this federal court proceeding,” the judge said. “The names of the putative class member organizations and their control dates – the date which the putative class member organizations submitted their applications for tax exempt status to the IRS – are directly related to the issue of class certification.”

The judge has not yet certified the tea party groups as a class, and the information that they’ve obtained so far through depositions remains under seal. But backers say if they can be certified, then they will begin to try to pry loose some of the key information about how the IRS chose which groups it went after in its targeting.

“We’re at the precipice,” said Mark Meckler, a member of one of the tea party groups suing, and also president of Citizens for Self-Governance, which is funding the litigation.

The Ohio lawsuit is the only major legal jeopardy still remaining in the courts for the IRS — though the agency is still facing an FBI investigation, according to documents obtained by True the Vote, a tea party group, under the Freedom of Information Act.

Earlier this week the deporting U.S. attorney in Washington, D.C. informed House Speaker John A. Boehner he would not prosecute Lois G. Lerner, the former senior executive who’s at the center of the targeting scandal, for contempt of Congress. The prosecutor said Ms. Lerner didn’t waiver her Fifth Amendment rights against self-incrimination when she delivered an opening statement at a congressional hearing but then refused follow-up questions.

The scandal developed after the IRS acknowledged it singled out tea party groups for special scrutiny, and asked intrusive questions that agency executives later said were inappropriate. The IRS’s inspector general concluded that 298 groups were targeted, with all but a handful of them leaning toward the conservative side.

But the IRS has resisted releasing the official list, arguing that is private information.

“The Internal Revenue Service cannot disclose the identities of the potential class members because that is return information protected,” the administration said in its court filings.

The judge disagreed, saying exemptions in law apply to a case like this.

Several other cases had been filed in Washington, D.C., by tea party groups trying to force a judge to proactively halt any future targeting. The judge tossed those cases, saying that the IRS insists the targeting has ended, so there is no further action needed.

But some groups are still awaiting approval, including one that’s been pending for more than five years, which their lawyers argue means the IRS is still targeting despite its insistence that its program has ended.

Commissioner John Koskinen has said groups that are still waiting could take a deal, promising to limit their political activities to 40 percent of their business, but the groups argue that would mean giving up rights since they believe under current law politicking can be almost 50 percent of their activities.

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Corruption Update: DOJ Shut Down Search For Lois Lerner’s Emails; First IRS Tech Inspector Legally Blind

Exposed: Department Of Justice Shut Down Search For Lois Lerner’s Emails – Daily Caller

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The Obama administration’s Department of Justice shut down an attempt to force the Internal Revenue Service to search for Lois Lerner’s missing emails at off-site storage facilities.

The IRS never looked for Lerner’s backup email tapes at the West Virginia storage facility where they were being housed. Treasury deputy inspector general Timothy Camus told Congress that the IRS never asked IT professionals at the New Martinsville, W.V. storage site for the backup tapes. Camus only found the backup tape for Lerner’s missing 2011 emails about two weeks ago.

But the Obama administration knew that emails were stored at off-site facilities, and even shut down a legal request to send somebody to go look for them.

“We said in court that there are off-site servers where all IRS emails are stored,” lawyer Cleta Mitchell told The Daily Caller. Mitchell represents the voter-ID group True the Vote in its lawsuit against the IRS over improper targeting. Shortly after it was revealed last summer that the IRS was missing Lerner’s emails, Mitchell petitioned U.S. District Court Judge Reggie Walton for an independent forensic examiner to be appointed to investigate the missing emails.

Mitchell referred to the IRS’ off-site storage facilities in West Virginia and Pittsburgh in court in July. But DOJ lawyers representing the IRS and the Treasury inspector general argued that Mitchell could not even discuss the existence of the storage facilities in her capacity as a lawyer.

“The Department of Justice lawyers objected to that and said I shouldn’t even be allowed to mention these off-site servers without sworn affidavits,” Mitchell told TheDC. “They meant that I was trying to testify to the judge without bringing in witnesses with sworn affidavits.”

Mitchell’s motion to get an independent forensic examiner was denied. The IRS’ internal investigation never headed to West Virginia, and the Treasury inspector general’s investigation managed to find a pertinent tape in West Virginia a mere two weeks before last Thursday’s House Oversight hearing. One of the IRS employees tasked with finding data on Lerner’s crashed hard drive was legally blind.

Mitchell’s statement about the off-site servers was clear as day, according to court transcripts obtained by TheDC.

“I’m advised that the IRS maintains servers that are in different states in different locations and that IRS employees are advised that their emails are never lost,” Mitchell said in court, according to the transcripts.

“That’s what I’ve been told as far as my emails here,” the Court replied.

“And I have had individuals who worked with, for the IRS from all across the country who have communicated that to me,” Mitchell continued. “And they say – I hear from government employees, retired and active, who say what is being said is not possible. It is not plausible and it is contrary to what we are told as employees of the IRS.”

Mitchell requested “the opportunity to at least have some expert look at whether the perimeters of the investigation are complete and… will fully cover all of the potential ways or places in which this investigation should look or take into consideration.”

But the email tapes sat there in West Virginia, alone and unexamined.

DOJ did not return a request for comment for this report.

As TheDC reported, the IRS fired its email-storage contractor Sonasoft just weeks after Lerner’s email-deleting computer crash.

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IRS Inspector General Now Undertaking Criminal Investigation Into Lois Lerner’s “Missing” Emails

IRS Watchdog Reveals Lois Lerner Missing Emails Now Subject Of Criminal Probe – Washington Times

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The IRS’s inspector general confirmed Thursday it is conducting a criminal investigation into how Lois G. Lerner’s emails disappeared, saying it took only two weeks for investigators to find hundreds of tapes the agency’s chief had told Congress were irretrievably destroyed.

Investigators have already scoured 744 backup tapes and gleaned 32,774 unique emails, but just two weeks ago they found an additional 424 tapes that could contain even more Lerner emails, Deputy Inspector General Timothy P. Camus told the House Oversight Committee in a rare late-night hearing meant to look into the status of the investigation.

“There is potential criminal activity,” Mr. Camus said.

He said they have also discovered the hard drives from the IRS’s email servers, but said because the drives are out of synch it’s not clear whether they will be able to recover anything from them.

“To date we have found 32,744 unique emails that were backed up from Lois Lerner’s email box. We are in the process of comparing these emails to what the IRS has already produced to Congress to determine if we did in fact recover any new emails,” Mr. Camus said.

Democrats questioned the independence of Inspector General J. Russell George, who is overseeing the investigation, saying he’s injected politics into his work.

Rep. Gerald Connolly, Virginia Democrat, said Mr. George is refusing to turn documents over to him, prompting a heated reply.

“You’re not entitled to certain documents,” Mr. George said.

“Oh really? We’ll see about that, won’t we,” Mr. Connolly replied, saying that he questioned whether Mr. George could be trusted if he’s refusing to provide documents, yet is in charge of an investigation into whether the IRS stonewalled document requests.

The hearing was the latest chapter in the complex investigation into the IRS’s targeting of tea party groups for special scrutiny.

Several congressional committees are still probing the matter, and both the inspector general and the Justice Department are conducting criminal investigations.

In a 2013 report, the inspector general said the IRS had improperly targeted conservative and tea party groups’ applications for nonprofit status, asking repeated intrusive questions and delaying their applications well beyond a reasonable time. Some of those groups are still waiting, with their applications now pending for years.

Rep. Jason Chaffetz, Utah Republican and Oversight Committee chairman, said the ongoing investigations undercut President Obama’s assertion last year that there was no evidence of corruption in the IRS’s targeting.

“I have no idea how the president came to such a definitive conclusion without all the facts,” he said.

The IRS belatedly told Congress it may have lost some of Ms. Lerner’s emails after her computer crashed, and asserted that the backup tapes didn’t exist.

But under questioning from Mr. Chaffetz, Mr. Camus said it took him only two weeks to track down the backup tapes, and when he asked the IRS depository for them, the workers there said they’d never been contacted by the agency itself.

Republicans said that was stunning because IRS Commissioner John Koskinen repeatedly assured Congress the emails were irretrievably lost.

“I think they have misled or lied to the committee,” said Rep. John L. Mica, Florida Republican.

Mr. Camus said they were clued in to the 424 new tapes they just found a couple of weeks ago after realizing the IRS hadn’t given over a key document. They demanded that document, and realized it showed hundreds of other tapes existed.

Democrats said the investigation has dragged on too long and been too expensive, pointing to the IRS’s estimate that it has spent $20 million on staff and equipment to try to comply with the committee’s request.

Ms. Lerner, who oversaw the unit of the IRS that scrutinized nonprofit groups’ applications, is a central figure in the investigations.

After belatedly discovering that some of her emails weren’t being recovered, the IRS did try to reconstitute them by asking other employees to dig through their emails to see if they were the recipients of any messages that involved her. That did produce some of the missing emails.

Democrats said the GOP seemed to be insinuating Ms. Lerner had purposely crashed her hard drive to hide emails – though she herself pushed to try to get messages recovered.

Democrats also questioned why the hearing was happening now, given that Mr. Camus and Mr. George both stressed that their findings are preliminary and could change as they learn more.

“It seems that the best course of action would be to have the inspector general come back when his report is complete,” said Rep. Elijah E. Cummings of Maryland, the ranking Democrat on the panel.

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