Congressional inquiry on Christine O’Donnell tax records heats up

Congressional inquiry on Christine O’Donnell tax records heats up

January 27, 2014

By Ben Wolfgang - The Washington Times, Sunday, January 26, 2014

Powerful committees in both chambers of Congress now want answers to questions surrounding Christine O'Donnell's personal tax records and whether the Delaware Republican's private information was illegally accessed and ultimately used in an effort to derail her 2010 U.S. Senate bid.

The House Ways and Means Committee has joined the Senate Finance Committee in probing a string of incidents dating back to March 2010, when Ms. O'Donnell — a tea party favorite who riled Delaware's GOP establishment by besting party mainstay Mike Castle in a primary contest before losing to Democrat Chris Coons in the general election — was told by Treasury Department investigators that her tax information had been breached.

Since then, Ms. O'Donnell has run into roadblock after roadblock in her search for answers as officials at the IRS, in Delaware state government and at the Treasury Inspector General for Tax Administration remain tight-lipped.

But for Ms. O'Donnell, who believes she was politically targeted in much the same way the IRS has singled out tea party groups and Hollywood conservatives for extra tax scrutiny, the Ways and Means inquiry is another step in the slow yet steady journey toward closure.

"I would like to see [congressional] hearings, but the hearings are the means to an end. The end is that this gets exposed," she told The Washington Times last week. "Two powerful committees in both houses of Congress are investigating this. That alone indicates there is some serious weight to this. Unless this is all exposed, unless every level of inappropriateness and corruption is exposed, I certainly won't be the last person to be politically intimidated like this."

Congressional hearings, however, may be unlikely. Ways and Means sources and outside legal analysts say the IRS tax code prevents the disclosure of any information related to cases like Ms. O'Donnell's.

Even Ms. O'Donnell herself will not be briefed on what either congressional committee discovers, as the federal government asserts that tax law goes so far as to shield its own employees from being exposed publicly if they are engaged in willful targeting or other wrongdoing.

Only the chairmen of the investigating committees — Rep. Dave Camp, the Michigan Republican who heads Ways and Means, and Sen. Max Baucus, the outgoing Montana Democrat who heads the Senate finance panel — can learn exactly what happened in a case such as Ms. O'Donnell's.

By law, they are unable to reveal what they discover.

"The IRS takes a position that they don't have to tell you the wrongdoing by their own agency and employees because of the protections that are supposed to be afforded to the taxpayer are then reversed and afforded to the IRS employee. This is a big problem. This agency is a big problem," said Cleta Mitchell, a Washington lawyer who has sued the IRS on behalf of the National Organization for Marriage and has worked with tea party groups who claim they were singled out by the government.

The National Organization for Marriage lawsuit is an attempt to find out who accessed and leaked its confidential tax files, which included the names of donors.

The IRS did not respond to a request for comment.

The Treasury Inspector General for Tax Administration, the primary investigative body in the O'Donnell case which first informed her that her tax information had been breached, said very little. A spokesman told The Times that "by law, TIGTA is not able to disclose any information concerning its investigative work."

In addition to looking into the details of the O'Donnell case specifically, the Ways and Means probe also has spurred a conversation within the committee about proposed changes to U.S. tax law, sources familiar with the investigation said. The law in question, Section 6103 of the U.S. code, states that "no officer or employee of the United States shall disclose any return or return information obtained by him in any manner."

The rule also extends to state government employees, law enforcement agencies and other investigative bodies.

The law is meant to protect the privacy of personal tax information, but critics argue that it is being used to prevent guilty parties in the IRS or elsewhere from being exposed.

"The IRS has been used as a political weapon, something in the campaign arsenal of the higher-ups for so long that of course there are going to be measures put in place to protect the secrecy of what they're doing," Ms. O'Donnell said. "I think that is exactly what's happening here. And this is exactly why there needs to be a hearing."

For Ms. O'Donnell, the improper accessing of her tax records was more than a breach of privacy. It also carried tangible consequences.

Just as she was announcing her ill-fated 2010 Senate bid, a tax lien was placed on a house purported to be hers. The lien was highly publicized and used to discredit Ms. O'Donnell's candidacy just as it was getting off the ground, even though she no longer owned the home in question.

The IRS eventually blamed the lien on a computer glitch and withdrew it. Ms. O'Donnell sold the home in 2008, and financial documents from her lender show that her back payments were satisfied in July of that year, long before the IRS initiated the erroneous lien.

Ms. O'Donnell also battled a three-year audit of her personal finances that ultimately ended with her repaying $1,100 to the federal government. She said friends and family also were subjected to intrusive audits, though they were cleared.

Before the ordeal began, Ms. O'Donnell said, she was warned of what would come.

As she pondered a Senate run, she said, she was told by a prominent political figure in Delaware that if she challenged Mr. Castle — a former Delaware governor and congressman and a fixture in the state Republican Party — that the IRS and others would "F with her head."

The case eventually spawned an inquiry from Sen. Chuck Grassley of Iowa, an influential Republican who serves on the Finance and Judiciary committees.

As a result of his probe, the Treasury Inspector General for Tax Administration revealed that at least four politicians or political donors have had their personal tax records improperly accessed since 2006, including one case described as a willful violation of federal law.

The Justice Department has declined to prosecute in any of the cases, and many of the details remain unclear.

The IRS previously stated that the "willful violation" unearthed by inspector general was not by an IRS employee.

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