White House Accused of Bypassing Rules on Access to Taxpayer Information

In the latest in a long effort to prove White House interference with the Internal Revenue Service, the right-leaning legal group Cause of Action Institute released a 67-page investigative report saying President Obama has “circumvented the congressionally created and authorized procedures for accessing confidential taxpayer information.”

Writing in the context of the three-year-old political controversy over alleged political “targeting” by the IRS’s Exempt Organizations division, Cause of Action explored “recent IRS misuse and unauthorized release of confidential taxpayer information and the possible role of a detailee program in the Office of the White House Counsel that may have provided access to the protected information.”

The report cites two examples of alleged political abuse of private taxpayer information. One involved a 2010 charge that then-Obama Council of Economic Advisers Chairman Austan Goolsbee in a call with reporters questioned the sufficiency of taxes paid by Koch Industries, news of which launched an inspectors general probe (never released) into whether the Kansas businessmen’s tax returns were reviewed at the White House.

A second example the legal group cited was a November 2012 instance in which the IRS allegedly gave the journalism group ProPublica “confidential application files of certain conservative groups seeking tax exempt status.”

The Obama team allegedly accomplished the interference by “relying on individual consent forms that were never intended for use by the president,” Cause of Action wrote. “The practice has allowed the president to avoid the reporting requirements and limitations placed on presidential access to taxpayer information by the Tax Reform Act of 1976.”

Specifically, an exchange program in which at least one Justice Department Tax Division attorney detailed to the Office of the White House Counsel “had intimate knowledge of confidential taxpayer information gained while serving as counsel to the IRS in litigation with nonprofit groups opposed to President Obama’s policies. This information is otherwise restricted from disclosure to the President and other White House officials."

Neither the Justice Tax Division nor the White House Counsel, the report concluded, implemented “context-specific training, guidelines, or ethical screens to prevent the inadvertent or deliberate disclosure of confidential taxpayer information by attorney-detailees."

Citing “inherent conflicts of interest” in the detailee program, Cause of Action called upon Congress to amend the 1976 tax law to foreclose presidential access to taxpayer information under the individual consents while beefing up enforcement of such restrictions at the White House. It also recommended that the Justice Designated Agency Ethics Official, Professional Responsibility Advisory Office, and Office of Professional Responsibility investigate attorney misconduct and report to the public and Congress.

Asked to respond, a Justice spokesman told Government Executive the department “takes safeguarding confidential taxpayer information very seriously. The manner in which returns and return information is accessed, reviewed, and disclosed by attorneys is governed by statute and regulations. These requirements apply to every attorney while they are in the Tax Division, on a detail within the department or other places in the government, and even after an attorney leaves federal service.”

The IRS declined to comment.