Republicans: IRS file swap likely broke the law

The IRS sent the FBI a million-plus page database on tax-exempt groups that included confidential taxpayer information just a few weeks before the 2010 election, two top House Republicans said Monday.

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Oversight Committee Chairman Darrell Issa (R-Calif.) and Rep. Jim Jordan (R-Ohio) said that the IRS likely violated federal law by handing over the 21 disks of information on 501(c)(4) groups to the FBI in October 2010. The Justice Department now says that it should have never received the database and will be returning it to the IRS.

Issa and Jordan said Lois Lerner, the former IRS official held in contempt by the House last month, is among the agency staffers who might have violated tax law.

The GOP lawmakers also chided the IRS for not turning over the database itself, despite the fact that the Oversight panel first requested information for its investigation a year ago and has issued two subpoenas to the agency.

"This revelation that the IRS sent 1.1 million pages of nonprofit tax-return data — including confidential taxpayer information — to the FBI confirms suspicions that the IRS worked with the Justice Department to facilitate the potential investigation of nonprofit groups engaged in lawful political speech," Issa and Jordan wrote to IRS Commissioner John Koskinen.

In the letter, the Republicans ask the IRS to explain why the agency didn’t hand over the database to them and for information on how the 21 disks were created and sent to the FBI.

The IRS said in a statement that it can "sometimes inadvertently" hand over confidential information like that given to the FBI.

In this case, the agency said, less than 1 percent of the returns on the disks — 33 out of more than 12,000 — contained confidential information. Most of the information, the IRS said, was already publicly available.

"The 33 groups represent a wide spectrum of organizations and the majority of these do not appear to have any connection to political activity," the agency said.

A Justice Department official told The Hill that the department did not believe that either the FBI or the Justice Department used the disks as part of any investigation.

The official added the DOJ told the Oversight panel that the FBI only reviewed the index of the 21 disks, and it returned its copies of the disks to the IRS last week after learning they contained confidential information. The department also recommended that Oversight Committee return its copies of the disks.

Lerner, the former chief of an IRS division overseeing tax-exempt organizations, last year acknowledged that the agency singled out Tea Party groups seeking tax-exempt status for additional scrutiny.

She was held in contempt of Congress after twice declining to testify before the Oversight panel, and after Republicans ruled she waived her Fifth Amendment rights against self-incrimination.

Democrats have repeatedly said that there’s no evidence the IRS’s scrutiny of Tea Party groups was politically motivated or that anyone outside the agency was involved, even as the congressional investigations stretch past a year.

“It should come as no surprise that Chairman Issa’s latest letter and press release omit key facts that undermine his breathless claims of a government conspiracy," said Rep. Elijah Cummings (Md.), the top Democrat on the Oversight Committee. 
 
"Rather than continuing to make such desperate accusations, the Committee should begin focusing on ways to clarify and improve the process of applying for tax exempt status.”

But Republicans have said in recent months that criticism of the Supreme Court’s Citizens United case by President Obama and other top Democrats prodded the IRS into singling out Tea Party groups.

"The IRS apparently considered political speech by nonprofit groups to be so troublesome that it illegally assisted federal law-enforcement officials in assembling a massive database of the lawful political speech of thousands of American citizens, weeks before the 2010 midterm elections," Issa and Jordan wrote Monday.

The two Republicans also noted that Lerner and Richard Pilger, a Justice Department official recently interviewed by the committee, discussed the disks and how they should be formatted in October 2010.

— This story was updated at 4:57 p.m. and 7:50 p.m.