On Thursday, Judicial Watch released internal IRS documents showing that in 2013, Sen. John McCain’s former staff director and chief counsel on the Senate Homeland Security Permanent Subcommittee, Henry Kerner, urged top IRS officials, including then-director of exempt organizations Lois Lerner, to “audit so many that it becomes financially ruinous.”
Prior to the April 30, 2013 meeting at which Kerner recommended targeting tax-exempt groups, Sen. Carl Levin (D-MI) and Sen. John McCain (R-AZ) had expressed their concerns that the IRS was not reining in political advocacy groups. Their concern had been triggered by the Supreme Court’s decision in Citizens United, which overturned parts of the McCain-Feingold Act.
Notes from IRS employees who attended an April 30, 2013 meeting recorded Kerner telling Lerner and other high-ranking IRS officials, “Maybe the solution is to audit so many that it is financially ruinous.”
Kerner inquired how to deal with tax-exempt groups that claimed section 501 (c)(4) but were designed to be primarily political. Lerner answered that the system worked but not in real time. Kerner said the tax-exempt groups didn’t disclose donors. Lerner said that if the tax-exempt groups didn’t meet the requirements, the IRS could revoke their status; IRS official Nan Marks said the system didn’t work if the tax-exempt groups didn’t disclose donors, prompting Kerner to say perhaps the answer was to audit so many of the tax-exempt groups that it would be financially ruinous for them.
As Judicial Watch (JW) has reported on the 2013 meeting, Senator McCain then issued a statement decrying “false reports claiming that his office was somehow involved in IRS targeting of conservative groups.” Judicial Watch notes, “The IRS previously blacked out the notes of the meeting but Judicial Watch found the notes among subsequent documents released by the agency.”
JW also points out, “The April 30, 2013 meeting came just under two weeks prior to Lerner’s admission during an ABA meeting that the IRS had ‘inappropriately’ targeted conservative groups. In her May 2013 answer to a planted question, in which she admitted to the ‘absolutely incorrect, insensitive, and inappropriate’ targeting of Tea Party and conservative groups, Lerner suggested the IRS targeting occurred due to an ‘uptick’ in 501 (c)(4) applications to the IRS but in actuality, there had been a decrease in such applications in 2010.”
Ten days after the April meeting, Lerner admitted that the IRS had improperly and deliberately delayed applications for tax-exempt status from conservative non-profit groups.
Judicial Watch President Tom Fitton concluded, “The Obama IRS scandal is bipartisan – McCain and Democrats who wanted to regulate political speech lost at the Supreme Court, so they sought to use the IRS to harass innocent Americans. The Obama IRS scandal is not over – as Judicial Watch continues to uncover smoking gun documents that raise questions about how the Obama administration weaponized the IRS, the FEC, FBI, and DOJ to target the First Amendment rights of Americans.”