Lois Lerner, IRS Sued for Alleged Illegal Disclosures

Citing “unconstitutional scrutiny” and “illegal release” of its application for tax-exempt status under section 501(c)(4) of the tax code, Texas-based nonprofit organization Freedom Path has sued Lois Lerner, unknown IRS officials, and the IRS. The 56-page complaint filed April 28 in the U.S. District Court for the Northern District of Texas claims that the IRS hatched an “illegal scheme” by which “officials acting under color of federal authority” pulled and delayed applications, “and then made probing and unconstitutional requests for additional information.”

This portion of the complaint forms a basis for a Bivens action under which plaintiffs may seek damages against federal officials for violations of constitutional rights. Freedom Path also seeks statutory damages including attorney fees under section 7431 of the tax code, which provides remedies for the intentional disclosure of confidential tax information. Freedom Path’s complaint alleges that its application for tax-exempt status was released in 2012 to ProPublica, the George Soros-funded leftwing nonprofit organization that acts as a news feeder to for-profit media outlets. ProPublica published an article in January 2013 entitled “Controversial Dark Money Group Among Five That Told IRS They Would Stay Out of Politics, Then Didn’t,” which was reposted by The Washington Post and The Salt Lake Tribune. Curiously, the civil penalties under section 7431 are weaker for federal officials than state officials who unlawfully leak confidential tax information. Section 7413 also includes criminal penalties for the willful disclosure of, or access to, confidential tax information. Eric Holder’s Justice Department, however, has refused to prosecute any IRS officials despite a report by J. Russell George, the Internal Revenue Service’s inspector general, citing grounds for prosecution.



Not missing a beat in its narrative, The Salt Lake Tribune reported the Freedom Path lawsuit beginning this way: “A secretive conservative group that helped Sen. Orrin Hatch win re-election in 2012 is suing the Internal Revenue Service, claiming government bureaucrats targeted it based on its political views.” Meanwhile, the Obama administration keeps on breaking the law, and the Holder Justice Department keeps on failing to prosecute lawbreaking by government. We need more and stronger private remedies statutes.