IRS watchdog: Records of candidates, donors inappropriately disclosed

Political candidates or donors had their tax records inappropriately authorized or disclosed four times in the last seven years — at least once on purpose, according to a Treasury inspector general.

J. Russell George, Treasury’s inspector general for tax administration, told Sen. Chuck Grassley (R-Iowa) that his office referred the case where it found “willful unauthorized access” to the Justice Department, which declined to prosecute. George did not say whether IRS employees, other federal employees or state government staffers were behind the unauthorized access

The department also declined to prosecute another case in which the inspector general found there was no evidence of intentional access or disclosure. In all, George’s office found three cases in which access or disclosure had been unintentional.

In his letter to Grassley, George also said that his office has not found any cases since 2006 in which the IRS targeted a candidate with an audit, but that it was looking into two potential cases.

Grassley, in turn, is pressing Attorney General Eric Holder over why the Justice Department isn’t seeking to prosecute, especially in light of the current controversy over the IRS’s targeting of groups seeking tax-exempt status.

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“Although this may not be indicative of widespread targeting, any instance is cause for concern,” Grassley wrote to Holder on July 12. “Even more alarming, in at least one instance TIGTA referred evidence of “willful unauthorized access” to the United States Attorney’s Office, but criminal prosecution was declined.”

“Decisions such as these directly impact the political process and should be subject to the scrutiny of the American public,” the Iowa Republican added.

Grassley’s letter asks Holder if he personally knew about the referrals and who made the decision not to prosecute, seeking answers by July 26. The Washington Times first reported Grassley’s letter and the new disclosure.

George’s letter said that his office found eight separate allegations of inappropriate access or disclosure of donor or candidate records since 2006. In three of those cases, the access was legitimate, and in one the inspector general found no access occurred.

George is scheduled to testify before the House Oversight Committee on Thursday, after Democrats have increasingly questioned the objectivity of his office’s May report finding that the IRS singled out Tea Party groups seeking tax-exempt status.

On Tuesday, Rep. Elijah Cummings (Md.), the top Democrat at House Oversight, released a new memo asserting there was no evidence that the IRS’s actions were politically motivated, or that the White House was involved.

This story was updated at 1:16 p.m. and later updated to clarify the IRS's potential involvement