If you were targeted by the IRS, you probably thought that retired but officially silent Lois Lerner--who ran a key IRS division--might face charges. Congress found her in contempt after she professed her innocence, and thereafter took the Fifth. Much later, she broke her silence to Politico, saying she did nothing wrong, claiming that she was the victim. The U.S. Attorney’s Office was supposedly considering prosecution, but now it announced she is off the hook and will not be charged with contempt.
Here is the seven-page letter the U.S. Attorney sent to Speaker John A. Boehner with the news and its rationale. There is considerable back story. Ms. Lerner and Justice Department officials met in 2010 about going after conservative organizations after the Supreme Court’s Citizens United case. In August 2010, the IRS distributed a ‘be on the lookout’ list for Tea Party organizations. By March 2012, amid reports of targeting, former IRS Commissioner Doug Shulman testified there is “absolutely no targeting” by the IRS.
On November 9, 2012, Mr. Shulman stepped down, replaced by Steven Miller. On May 10, 2013, Ms. Lerner admitted targeting, calling it “absolutely incorrect, insensitive, and inappropriate.” Four days later, on May 14, 2013, the Inspector General issued a report confirming targeting. Attorney General Eric Holder announced an FBI investigation, and Acting IRS Commissioner Steven Miller resigned.
On May 22, 2013, Ms. Lerner professed her innocence, then took the Fifth. Next day, she was placed on administrative leave. On September 24, 2013, Ms. Lerner’s retirement was announced with full pension. President Obama said there is “not a smidgen of corruption” at the IRS, but the Committee on House Oversight and Reform issues a report on Lois Lerner.
On April 8, 2014, the Committee on House Oversight and Government Reform said it would pursue contempt charges against Ms. Lerner. On May 7, 2014, the House of Representatives held Ms. Lerner in contempt of Congress. On June 13, 2014, the IRS first stated that it lost Ms. Lerner’s emails from 2009 to 2011.
The IRS said hard drives and backups are destroyed for six other IRS employees too. The IRS spent $10 million unsuccessfully trying to recover them, but much later, the Inspector General found them, noting that IRS IT professionals said no one ever asked for them. It is still possible Ms. Lerner could be queried over the hearings revealing 32,000 more emails, and possible criminal activity.
But on his last day in office, U.S. Attorney Ronald Machen concluded that Ms. Lerner’s statement was not a waiver of her constitutional right against self-incrimination. Ms. Lerner’s lawyer said:
“We are gratified but not surprised by today’s news,” said William W. Taylor III, who has handled Ms. Lerner’s case. “Anyone who takes a serious and impartial look at this issue would conclude that Ms. Lerner did not waive her Fifth Amendment rights. It is unfortunate that the majority party in the House put politics before a citizen’s constitutional rights.”
House Oversight and Government Reform Committee Chairman Jason Chaffetz issued the following statement in response to the Department of Justice’s decision to not proceed with a criminal contempt prosecution of Lois Lerner:
“Today’s announcement is disappointing and exhibits a disregard for the rule of law. Mr. Machen attempted to absolve Ms. Lerner of her actions by substituting his judgment for that of the full House of Representatives. It is unclear whether the Administration directed Mr. Machen not to prosecute Lois Lerner, or whether he was motivated by an ideological kinship with IRS’s leadership. The Committee will continue to pursue its ongoing investigation into the targeting of American citizens based on their political beliefs. Our goal is to ensure that the people responsible, including Lois Lerner, are held accountable, and that appropriate reforms and safeguards are put into place at the IRS to guarantee that the rights of Americans are not trampled on again by overzealous bureaucrats with political agendas.”
Perhaps this is all over. Ms. Lerner must feel vindicated. As head of the tax-exempt division, records reveal that while she presided over alleged discrimination against conservative nonprofits, Ms. Lois Lerner received $129,000 in bonuses.
For alerts to future tax articles, follow me on Forbes. You can reach me at Wood@WoodLLP.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
