The FBI has gotten all of the headlines on its year-plus investigations into Hillary Clinton’s e-mail and the Clinton Foundation, but they’re not the only agency taking a closer look at the Clintons. The Dallas Observer reported yesterday that a local branch of the IRS has spent the last four months looking into the activities of the Clinton Foundation themselves. Investigators there have their lips more tightly pressed than in the FBI and the Department of Justice, but the probe could have some unpleasant complications for the Clintons in the months ahead.

Stop laughing. It’s possible. Via Jeff Dunetz:

The Earle Cabell Federal Building in downtown Dallas is an all purpose office complex, a bastion of federal bureaucracy located at 1100 Commerce St. Most people come for a passport or to get business done in front of a federal judge. But inside, a quiet review is underway that has direct ties to the raging presidential election: The local branch of the IRS’ Tax Exempt and Government Entities Division is reviewing the tax status of the Bill, Hillary and Chelsea Clinton Foundation. This IRS review has not generated similar waves as Department of Justice probes into the foundation, and has largely been forgotten in the campaign’s melee. It’s just not as sexy as private email servers, FBI infighting and charges of political pressure applied to law enforcement. But even though this examination is less scrutinized and is harder to conceptualize, it’s [sic] impact may be important.

Why Dallas? The office there has a specific jurisdiction that should make the Clintons at least a little bit nervous:

But the office does have a mandate to review claims of exemption, including conducting “examinations to identify and address non-compliance” like the one underway with the Clinton Foundation. One IRS document called the “Tax Exempt and Government Entities Fiscal Year 2017 Work Plan” gives a more complete picture. “Filing, organizational and operational and employment tax numbered among the top issues the Exempt Organizations Examinations group uncovered in its 4,984 examinations in 2016,” it says. “The filing issues primarily involved verifying exempt activities and securing delinquent returns.” … “They have a limited budget, which is a problem, so they have to pick their targets wisely,” Stoltz says. “Because this is a high profile case, they can make an example and show that no one is above the law.”

Well, that certainly would be a refreshing change in Obama-administration investigations.

The Clinton Foundation ended up on the radar of this IRS unit for two reasons, Joe Pappalardo writes. First, they paid $26 million in salaries in 2014, which would be enough to flag them for a closer look even with this office’s thin budget. Second, when 64 members of the branch of government that controls your budget ask you to look into something, generally speaking, you’re gonna take a peek.

So far, they haven’t reported back any findings, and no one expects them to do so before the election. They are, however, pursuing a line of inquiry that parallels the FBI probe, which is whether the foundation acted as a pay-to-play operation that traded official action for donations. That’s a crime of corruption, but as it turns out, it’s also a violation of tax law as well. Pappalardo explains with a reference to the IRS rules:

The emails reveal that Chelsea Clinton ordered an audit of the foundation and “some interviewees reported conflicts of those raising funds or donors, some of whom may have an expectation of quid pro quo benefits in return for gifts.” That’s an eye-catcher for the TE/GE folks looking for specific examples of inurement. Instead of money changing hands, the IRS is looking to see if the Clintons traded money for preferential treatment. The IRS rules lay out what qualifies as inurement:

“Any transaction between an organization and a private individual in which the individual appears to receive a disproportionate share of the benefits of the exchange relative to the charity served presents an inurement issue. Such transactions may include assignments of income, compensation arrangements, sales or exchanges of property, commissions, rental arrangements, gifts with retained interests, and contracts to provide goods or services to the organization.”

Given this language, citing “gifts” and “quid pro quo benefits” in emails is a pretty bad move for anyone involved in a nonprofit group. Another bad move: When senior Clinton advisers like Doug Bland call the intersection of the foundation fundraising and the former president’s personal activities “Bill Clinton Inc.”

Jeff envisions some other issues that the IRS might discover:

Then there’s Bubba’s travel. Bubba used the Clinton Foundation to pay for travel that blurred the lines between foundation activities and personal profit. In 2013 the NY Post reported, “According to previously undisclosed data provided by the Clinton Foundation, presidential trips accounted for 13 percent of the 2010 travel budget and 10 percent of the 2011 travel budget. That puts Bill Clinton’s single-year travel tab for 2011 at more than $1 million. A foundation official wouldn’t say how many presidential trips occurred in that time frame.” But when Bubba traveled he liked to multi-task, while on trips paid for by the Foundation he would do foundation business as well as some of those speeches where he made $500K a shot–that’s another example of an inurement, paying Bills travel costs when he was doing more than foundation business. Oh if any of the Board of Directors knew of any of these abuses they could be violating the law. Two present members of the BOD are Chelsea Clinton and former President Bubba Clinton. Oh and Democratic Party presidential candidate Hillary Clinton was on the BOD until she was to announce her campaign for the oval office in 2015. In other words if the IRS found that there was inurement, Bill, Hillary, and Chelsea could all be found liable.

Yes, but … “Liable” is a civil determination, not a criminal indictment. It might create some political headaches for the Clintons (and the fines could put a big dent in the foundation’s operations), but it’s not the kind of personal tax evasion that would force a politician out of office. And that’s if the IRS actually brings some sort of action based on the foundation’s operations. So far, the track record of government entities treating the Clintons based on the rule of law is, shall we say, unimpressive. Don’t expect that to change if Hillary Clinton wins the election next week — and don’t expect to hear any more about this probe if that happens, either.