Republicans Accuse Dems of Using IRS Audits to Bully Conservative Groups

Congressional Republicans are accusing Democrats and administration officials of leaking privileged IRS information and using invasive audits to bully conservative groups, the New York Times says, and they are not happy about it.

The first charge by Republicans Senators centers around a senior Obama administration official who may have improperly accessed the tax records of Koch Industries, an oil company whose owners are major conservative donors, while the second charge lambastes Senator Max Baucus (D-MT) for scoping the funding activities of historically conservative tax-exempt groups.

According to the Times, the Treasury Department has opened up an investigation regarding allegations by Sen. Chuck Grassley (R-IA)* and six other Republican senators who claim a senior administration official disclosed confidential taxpayer information regarding Koch Industries -- whose owners are major conservative donors -- during a conference call with journalists.

During that call, the official pointed to Koch Industries as an example of “multibillion-dollar businesses that are structured as partnerships in ways that allow them to avoid paying sizable corporate taxes.”

Grassley believes that statement implied “direct knowledge of Koch’s legal and tax status,” in possible violation of taxpayers’ privacy laws, and may have been “politically motivated," the Times says.

The White House is calling the ordeal a misunderstanding, saying in a statement that “The official’s statement was not based on any review of tax filings and we will not use this example in the future."

Major conservative donors are not the only target this campaign season. The Times says that Sen. Baucus asked the IRS last week to conduct a broad review into “major” tax-exempt organizations to determine if any were misusing their tax-exempt status. Tax-exempt (or non-profit) groups are generally not allowed to engage in political activities.

That comes on the heels of Democrat complaints "that well-financed conservative groups ... have improperly exploited gaps in federal tax and campaign finance law to finance attacks on Democratic candidates," the Times reports.

In that spirit, liberal groups such as Think Progress and Move On have specifically attacked the Chamber of Commerce for "improperly funneling money for political work through its nonprofit arm," including accusations that it has accepted donations from overseas corporations to use for political reasons (violating a ban on foreign involvement in campaigns).

But Republican Sens. Orrin Hatch of Utah and Jon Kyl of Arizona attacked any such IRS investigations in a letter sent to the I.R.S. on Wednesday.

“I.R.S. audits and investigations are specifically intended to be separated from the political process," the letter said. "We expect the I.R.S. will adhere to those standards despite requests to the contrary from high-level political officials.”

*(Editor's note: An earlier version of this article listed Sen. Grassly as a Democrat.)