Lois Lerner Targeted Senator Grassley for IRS Exam

House Republicans are accusing Lois Lerner, the former director of the Internal Revenue Service’s Exempt Organizations unit, of emailing a colleague about subjecting Sen. Charles Grassley, R-Iowa, the former chairman of the Senate Finance Committee, to an IRS examination.

House Ways and Means Committee chairman Dave Camp, R-Mich., has been among those investigating the scandal that erupted after Lerner revealed that the IRS had been using terms such as “Tea Party” and “Patriot” to screen applications from groups applying for tax-exempt status. He revealed a series of emails Wednesday between Lerner and a colleague over an invitation that had been sent to Grassley to speak at a seminar to which Lerner had also been invited to speak. The unidentified group offered to pay for both Grassley and his wife to attend the event. In the email messages, Lerner says she would rather not appear onstage with Grassley, but asks a colleague about whether Grassley or his wife needs to declare the travel reimbursement as income, and if they don’t, whether they should be subject to an IRS examination.

In one email, dated Dec. 4, 2012, Lerner emailed Matthew Giuliano, a tax law specialist at the IRS, asking him, “Looked like they were inappropriately offering to pay for his wife. Perhaps we should refer to Exam?” She also wonders in the message, which was sent from her BlackBerry, if there was a mix-up and the email intended for Grassley inadvertently was sent to her, and vice versa. She CC’ed her colleagues Holly Paz, who testified in the scandal last year, along with David Fish, another official in the Exempt Organizations unit whose emails have also surfaced as part of the investigation.

In response to Lerner’s email, Giuliano wrote in a heavily redacted message, “Not sure we should send to exam. I think the offer to pay for Grassley’s wife is income to Grassley, and not prohibited on its face (Grassley is neither an officer, director or other insider to the organization, which is …. We would need to wait for: (i) Grassley to accept and attend the speaking arrangement, and (ii) then determine whether … issues him a 1099. And even without the 1099, it would be Grassley who would need to report the income on his 1040.”

Lerner replies, “Thanks—Don’t know why I thought it was …—maybe answer would be the same. Don’t think I want to be on stage with Grassley on this issue.”

The IRS revealed this month that it lost over two years of emails between Lerner and people outside the agency, blaming the problem on a computer crash on Lerner’s laptop in 2011 (see IRS Lost 2 Years of Lois Lerner’s Emails with Outsiders). However, the IRS has been able to locate 67,000 of Lerner’s emails with people inside the IRS and has been providing them to the Ways and Means Committee and other congressional committees investigating the mounting scandal. Lerner has asserted her Fifth Amendment right to not testify before Congress, but is facing contempt of Congress charges.

Nevertheless, Camp has demanded a special prosecutor to investigate the missing emails from Lerner and other IRS staffers who have been part of the investigation (see Camp Wants Special Prosecutor in IRS’s Missing Lerner Email). His committee, as well as the House Oversight Committee chaired by Rep. Darrell Issa, R-Calif., called in IRS commissioner John Koskinen to testify about the matter in a pair of hearings at which Republican lawmakers subjected him to a contentious series of questions and challenges.

“We have seen a lot of unbelievable things in this investigation, but the fact that Lois Lerner attempted to initiate an apparently baseless IRS examination against a sitting Republican United States Senator is shocking,” said Camp in a statement. “At every turn, Lerner was using the IRS as a tool for political purposes in defiance of taxpayer rights.  We may never know the full extent of the abuse since the IRS conveniently lost two years of Lerner emails, not to mention those of other key figures in this scandal.  The fact that DOJ refuses to investigate the IRS’s abuses or appoint a special counsel demonstrates, yet again, this Administration’s unwillingness to uphold the rule of law.”

Camp’s press office disclosed the documents showing that Lerner received an invitation to a speaking event that it said was intended for Grassley. It noted that instead of forwarding the invitation to Grassley’s office, Lerner immediately suggested to others in her office that the issue should be referred for examination.  The House Ways and Means Committee was able to investigate this information through its authority under Section 6103 of the tax code. The committee noted that the waiver was signed by Grassley and his wife in order to make the information public.

“This kind of thing fuels the deep concerns many people have about political targeting by the IRS and by officials at the highest levels," Grassley said in a statement. "It’s very troubling that a simple clerical mix-up could get a taxpayer immediately referred for an IRS exam without any due diligence from agency officials.”