Whistleblower takes IRS to Court, Alleges Agency's "Blind Eye" to Prototype Tax-Exempt Tax Frauds

WASHINGTON - May 15, 2013 - PRLog -- Washington is abuzz with claims that the IRS mistreated Tea Party tax-exempts, but an IRS Whistleblower alleges that by far the largest single abuse of the tax-exempt law to benefit a political party was conceived and executed by the Bush Administration, resulting in the capture of the House of Representatives by the Republican Party and, ironically, its dominant Tea Party fraction.

Dr. Robert Jacobson, who became an official IRS Whistleblower in 2010, filed a formal Complaint with the IRS Tax-Exempt Examinations office in May 2010 describing the racket -- apparently conceived by friends of Karl Rove as a prototype for post-Citizens United money-laundering schemes.

In his Complaint, Jacobson calls on the IRS to immediately audit the Non-Compliant Taxpayer, a tax-exempt corporation apparently created primarily for this purpose though with a seemingly benign exterior. Jacobson has taken the IRS to US Tax Court, the main venue for IRS Whistleblowers, to establish the agency's neglect and its role in a very large tax fraud also involving violations of FARA, the Foreign Agent Registration Act, based on substantial infusions of Chinese money into the assets of the Non-Compliant Taxpayer.  

"It may be that the Tea Party screams the loudest when stuck, but the scheme I called out raised as much as a hundred-million dollars definitely intended to benefit the Republican Party, based on an hypothetical 'follow-the-money' analysis. Only the IRS could find out for sure, and it ignored my Complaint for at least three years, until the Non-Compliant Taxpayer, having done its job of helping the Republicans to capture the House, starting rolling up its operations. The IRS finally did something, though what was unclear, in the last months of 2012 -- but that was already two years too late. The money was gone."  

Jacobson, an experienced policy analyst and forensics expert, is handling his case "pro se," which means he is his own counsel. "It's not my regular line of work," he advised, "but I couldn't stand by and watch this travesty continue without sounding the alarm." Jacobson cites such abuses as the IRS enabling the Non-Compliant Taxpayer to file grossly late tax returns year after year; allowing it to engage in "excess benefit transactions" -- insider deals -- with no sanctions; and even providing it with expedited tax-exempt status despite the Taxpayer's apparent perjury, incomplete application materials, and "bad standing" in the District of Columbia, where it is chartered, for repeated failure to file tax returns.  

This last anomaly gained the attention of agents for TIGTA, the Treasury Inspector General for Tax Administration who, however, do not have authority to repeal the IRS' determination of the Taxpayer's tax-exempt status, awarded with record-breaking speed.  

"Thus, I have asked the US Tax Court to study the situation," said Jacobson in a statement, "and if it agrees with me, to order the IRS to make known its administrative procedures and thoroughly examine the Taxpayer's books, to do a full audit, and track down and 'claw back' the $40-80 million that may have been used by intermediaries to elect Republicans to the House of Representatives.  Not only tax fraud but also felony FARA violations occurred while the IRS dithered, and repeated perjuries regarding US law insinuated themselves into the vernacular of Republican and Democratic policymakers alike, including the new State Department in 2009.

"The erosion of the US Government's legitimacy will continue until the IRS is ordered to take action and restitute illegal tax-exempt contributions to the US Treasury, turn over the racket's perpetrators (including close friends of Karl Rove) to the Justice Department for prosecution, and issue rules that prevent this perversion of the Tax Code from occurring again, in next year's elections and in the long-run.

"I believe the Tea Party allegations are diversionary, intended to paint the IRS into a PR corner, so that it can't adequately enforce the tax laws. My case in US Tax Court is intended to refocus the public's and policymakers' attention on the real failings of the IRS, not isolated incidences elevated to an undeserved place in the nation's political consciousness."

* * *

NOTE: Dr. Jacobson points out, "I can't divulge the name of the Non-Compliant Taxpayer whose treatment by the IRS is the subject of this US Tax Court case, not in this context. I am not responsible, however, if third parties use Google or other means to discover whom the Non-Compliant Taxpayer is or the other actors in this carefully-orchestrated political melodrama, abetted I claim by the IRS."

Photo:
https://www.prlog.org/12138395/2