McCain minority staff director Henry Kerner to IRS official Lois Lerner and other IRS

officials: “the solution is to audit so many that it becomes financially ruinous”

(Washington, DC) – Judicial Watch today released newly obtained internal IRS documents, including material revealing that 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.”  Kerner was appointed by President Trump as Special Counsel for the United States Office of Special Counsel.

The explosive exchange was contained in notes taken by IRS employees at an April 30, 2013, meeting between Kerner, Lerner, and other high-ranking IRS officials. Just ten days following the meeting, former IRS director of exempt organizations Lois Lerner admitted that the IRS had a policy of improperly and deliberately delaying applications for tax-exempt status from conservative non-profit groups.

Lerner and other IRS officials met with select top staffers from the Senate Governmental Affairs Committee in a “marathon” meeting to discuss concerns raised by both Sen. Carl Levin (D-MI) and Sen. John McCain (R-AZ) that the IRS was not reining in political advocacy groups in response to the Supreme Court’s Citizens United decision.  Senator McCain had been the chief sponsor of the McCain-Feingold Act and called the Citizens United decision, which overturned portions of the Act, one of the “worst decisions I have ever seen.”

In the full notes of an April 30 meeting, McCain’s high-ranking staffer Kerner recommends harassing non-profit groups until they are unable to continue operating. Kerner tells Lerner, Steve Miller, then chief of staff to IRS commissioner, Nikole Flax, and other IRS officials, “Maybe the solution is to audit so many that it is financially ruinous.” In response, Lerner responded that “it is her job to oversee it all:”

Henry Kerner asked how to get to the abuse of organizations claiming section 501 (c)(4) but designed to be primarily political. Lois Lerner said the system works, but not in real time. Henry Kerner noted that these organizations don’t disclose donors. Lois Lerner said that if they don’t meet the requirements, we can come in and revoke, but it doesn’t happen timely. Nan Marks said if the concern is that organizations engaging in this activity don’t disclose donors, then the system doesn’t work. Henry Kerner said that maybe the solution is to audit so many that it is financially ruinous. Nikole noted that we have budget constraints. Elise Bean suggested using the list of organizations that made independent expenditures. Lois Lerner said that it is her job to oversee it all, not just political campaign activity.

Judicial Watch previously 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.”   The IRS previously blacked out the notes of the meeting but Judicial Watch found the notes among subsequent documents released by the agency.

Judicial Watch separately uncovered that Lerner was under significant pressure from both Democrats in Congress and the Obama DOJ and FBI to prosecute and jail the groups the IRS was already improperly targeting. In discussing pressure from Senator Sheldon Whitehouse (Democrat-Rhode Island) to prosecute these “political groups,” Lerner admitted, “it is ALL about 501(c)(4) orgs and political activity.”

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.

On May 14, 2013, a report by Treasury Inspector General for Tax Administration revealed: “Early in Calendar Year 2010, the IRS began using inappropriate criteria to identify organizations applying for tax-exempt status” (e.g., lists of past and future donors). The illegal IRS reviews continued “for more than 18 months” and “delayed processing of targeted groups’ applications” in advance of the 2012 presidential election.

All these documents were forced out of the IRS as a result of an October 2013 Judicial Watch Freedom of Information (FOIA) lawsuit filed against the IRS after it failed to respond adequately to four FOIA requests sent in May 2013 (Judicial Watch, Inc. v. Internal Revenue Service (No. 1:13-cv-01559)). Judicial Watch is seeking:

• All records related to the number of applications received or related to communications between the IRS and members of the U.S. House of Representatives or the U.S. Senate regarding the review process for organizations applying for tax exempt status under 501(c)(4);
• All records concerning communications between the IRS and the Executive Branch or any other government agency regarding the review process for organizations applying for tax exempt status under 501(c)(4);
• Copies of any questionnaires and all records related to the preparation of questionnaires sent to organizations applying for 501(c)(4) tax exempt status.
• All records related to Lois Lerner’s communication with other IRS employees, as well as government or private entity outside the IRS regarding the review and approval process for 501 (c)(4) applicant organizations.

“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,” said Judicial Watch President Tom Fitton. “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.”

By Adam Andrzejewsi
FoxNews.com

The ever-rising federal debt just surpassed $21 trillion last month – at least $65,000 for every person in the U.S. Just how much federal waste, duplication, and weird or unnecessary spending are your tax dollars funding?

It’s hard to know where to begin, but here are some starters.

Delving into the trillions of dollars in annual spending, our government transparency organization, OpenTheBooks.com, recently examined Washington’s discretionary grants system – beyond such big-ticket items as health, welfare and defense. We found that the feds doled out 560,771 grants totaling $583 billion during fiscal year 2016, the most recent year on record.

This means, on average, each grant exceeded $1 million. Not every federal grant is wasteful, but there are plenty that are highly questionable.

Consider these outlandish examples from the Department of Health and Human Services (HHS) in the final year of the Obama Administration. (We’ve included the names of the congressional representatives for the zip codes where the grant was received.)

· Sex-Ed for Prostitutes: Barbara Lee, D-Calif. – The California Prostitutes Education Project received nearly $1.5 million from HHS to teach sex-ed to prostitutes. The project seeks to teach prostitutes about safer sex and needle use in a way that’s respectful to its clients’ lifestyle and choices – even though prostitution is illegal in California and 48 other states.

· Designing Condoms: Joseph Kennedy III, D-Mass. – More than $200,000 funded a new condom design to address “a lack of adequate lubrication,” currently a “universal drawback” in other condom designs. The grant recipient – a company called Hydroglyde Coatings with the sole mission to design the perfect condom lubricant – should fund its own research and development.

· Video Game for Your Future Self: Robert Wittman, R-Va. – More than $650,000 funded video games designed to “make the future feel close,” allowing adolescents to explore their future selves. These games are titled “My World of Dreams,” “The Valley of Others,” “Disappointment Bridge,” and “The Sea of Hope.”

· Pedestrian Training in China: Terri Sewell, D-Ala. – The University of Alabama received $183,750 to develop a virtual reality platform to teach children how to cross the street – about as far from Alabama as possible.

·  E-Diary for Micro-Aggressions: Adam Kinzinger, R-Ill. – Northern Illinois University received $173,089 from HHS for a four-week study in which “radically diverse bisexual women” documented their experience with micro-aggressions using a daily e-diary.

Health & Human Services was the biggest porker by far – doling out roughly $4 of every $5 in federal grants. The total grant tab at HHS was $421 billion.

But the waste didn’t just flow from there. Ten other federal agencies doled out more than $1 billion in grants in fiscal year 2016 – and many of these agencies went off-mission in doing so.

· Galactic Animated Cartoons: Mo Brooks, R-Ala. – The National Aeronautics and Space Administration (NASA) awarded $2.5 million in grant funding to the Alabama Space Science Exhibit Commission to produce two seasons of “Space Racers,” an animated children’s cartoon in which the main characters embark on several galactic adventures.

· Zoombinis Computer Game: Katherine Clark, D-Mass. – The National Science Foundation (NSF) granted more than $658,000 to redevelop a 1990s computer game called “The Logical Journey of the Zoombinis” where children create their own small blue creature – the Zoombini – to help them through adventure challenges.

· Hobo Day: Kristi Noem, R-S.D., zip code 57007 – A grant for nearly $12,000 from the National Endowment for the Arts (NEA) funded South Dakota State’s Historic Hobo Day where students dress up as “hobos” and parade through the streets.

There is more, much more. And now you can see it all for yourself, zip code by zip code, with an interactive map we’ve built at OpentheBooks.com. When you open the tool, you will be swallowed in a sea of red – we mapped every grant to a zip code pin. It may look intimidating – but simply zoom in or enter your zip code in the search bar above the map, click on a pin, then scroll down to see the results.

When the history of the current year in American history is written, the passage of the 2017 tax reform bill will likely take a very large role.
 

by John Carney
breitbart.com

After a decade of economic contraction and listless  growth, Americans demanded a new set of policies that would “make America great again.” And Republicans responded by passing a dramatic overhaul to the tax code that aims to break the hold of what liberal economists call “secular stagnation.”

The passage of the bill was greeted by the unedifying spectacle of the Democratic opposition, many in the mainstream media, and many leading economists joining to mislead the public about the Republican tax proposals. It played out almost as a Shakespearean play-within-a-play. But instead of Hamlet’s production of a play about the assassination of a king, we saw the blue-checkmarks of economics and budgets performing a miniature version of the resistance-without-regard-for-truth that has been performed by America’s orthodox elites ever since Donald Trump’s election.

Many of the reports about the tax plan, however, are demonstrably false. Others are not even wrong. Below are the top seven myths that critics of the tax overhaul have put forward–and the evidence that disproves them.

MYTH #1: They’re cutting taxes on millionaires while raising them for the middle class and the poor.
FACT: Middle-income Americans are the biggest winners under the tax bill.

Despite the ocean of ink and cloud-stuffing pixels spilled out to prove this point–and the more hyperbolic critics have described the tax bill as “class warfare” against the middle class and the poor–it is obviously wrong. The Senate bill, for example, cuts taxes for every income bracket and slashes the tax bill for nearly all taxpayers.  In fact, middle-class Americans would see the largest deductions in their tax bills.

Here are the facts, all according to the nonpartisan Joint Committee on Taxation.

• Middle-income Americans win the most. People earning between $40,000 and $70,000 would see their tax bills falling by 7.1 percent. People with incomes between $20,000 and $30,000 would see a 10.4 percent decline in their tax bills. Millionaires get just a 5.3 percent cut.
• And most middle-income Americans win. Eighty-one percent of taxpayers earning between $50,000 and $75,000 get a tax cut under the Senate bill, according to the JCT. For people earning between $75,000 and $100,000, 84 percent get a tax cut. The same with those earning $100,000 to $200,000. Just 80 percent of those earning a million dollars or more get a tax cut.
• A lot of families will owe no taxes at all. Most married couples with children earning less than $60,000 per year will have no income tax liability at all. That’s because under the Senate bill, the child tax credit rises to $2,000 per child. (Note, this is not from JCT but from the MarketWatch tax calculator.)
• It’s actually the wealthy that disproportionately pay higher taxes under the bill. Very few people would face a tax increase under the Senate bill, and those people are disproportionately wealthy. According to the JCT, just 10 percent of taxpayers earning between $50,000 and $75,0000 will get a tax increase under the Senate bill, largely from the loss of some deductions. That number is actually probably too high, however, because it was done before Senator Susan Collins of Maine proposed an amendment to preserve the deduction for state and local property taxes up to $10,000. For lower levels of income, the numbers are much smaller. In the $20,000 to $30,000 range, for example, just 5.6 percent will see taxes rise. Around 19.2 percent of millionaires, however, will pay more in taxes because of the loss of deductions.

One of the reasons critics of the tax cuts say the bill actually raises taxes on the middle class is that many of the cuts to individual tax cuts are set to expire after 2025 in order to comply with Senate budget rules. And it is true that if those tax cuts were allowed to expire, then taxes would go up for many Americans. But there’s no reason to expect Congress will allow the tax cuts to expire, particularly if Republicans keep control of either the House or the Senate. You don’t have to take our word for it, though. The New York Times explained all this years ago: temporary tax cuts are typically extended or made permanent.

When opponents of the tax bills say the expiration dates mean the Senate bill hikes taxes on the middle class, they’re not telling the truth.