The IRS audited a conservative women’s group in 2011, and ultimately found no wrongdoing, in what appears to be another example of the scandal plaguing the tax agency.
In January 2011, Clare Boothe Luce Policy Institute founder and president Michelle Easton told Breitbart News, an IRS agent called “to say our Form 990 from the year 2008 had been selected for examination.” Easton said that means, in “government lingo,” her group was getting an IRS audit.
“The IRS agent who called would not tell me how or why we were selected,” Easton said in an email. “She said the IRS just wanted to insure we were doing proper activities under our tax exempt 501(c)(3) status.” The year for the institute the IRS wanted to audit was 2008.
Easton founded the Clare Boothe Luce Policy Institute in 1993, and it had never received an audit before this. But 2008 was a different year for the institute and for Easton. Because Sarah Palin was selected as the vice presidential candidate, Easton stepped down as the president of institute temporarily to help volunteer for Palin’s campaign. “I was so excited a conservative woman was running,” Easton said. “As president of [a tax exempt organization] I couldn’t do a thing. And I never have. I’m an attorney and I follow all the rules but I just wanted to do something.”
“My work for the Palin campaign was done with our attorney’s advice, everything done by the book every step of the way,” she added.
It was not long after that first phone call from an IRS agent that two more agents appeared at Easton’s organization’s headquarters in Herndon, Virginia, to conduct an in-person interview and demand a tour of the building. “Soon two IRS agents marched into our office and conducted an interview of me here in our Herndon Headquarters with our attorney present, and the IRS agents asked a series of questions like – what does the Clare Boothe Luce Policy Institute do?” Easton said. “After the interview they asked for a tour of our headquarters which our attorney gave them. When they came to my office door the male agent looked at a large photograph on my office wall of me with President Reagan (who I worked for during the 8 years of his Administration) and his eyes widened and his jaw dropped in dismay.”
Then, Easton said the IRS made seven separate requests for “massive amounts of documents,” the first request being for a “List of contributors and Amounts.”
Easton said she and her attorneys fought against giving that information up, and ultimately did not give it up. “We vigorously defended the names of our supporters from the intrusive IRS,” she said. “But our supporters are such tremendous Americans and were worth the effort to preserve their privacy.”
The IRS demanded 2009 documents after the 2008 ones, she noted too. Ultimately, the entire process took away from their ability to be effective in their core role: promoting conservative women.
“To comply with the seven massive document requests from the IRS, the Institute had to provide boxes and boxes, reams of documents (for example they made us provide copies of bank statements, broker statement, check registers, schedule of accounts payable, schedule of accounts receivable, credit card statements and on and on),” Easton said. “This took the greater part of 2011 and cost tens of thousands of dollars to comply with the IRS demands. And naturally, greatly decreased the time we could spend promoting conservative ideas.”
Easton said her organization was finally fully cleared by the IRS, but not after a few more hiccups.
“At the end of all this harassment, the IRS concluded that while the Institute ‘continues to qualify for exemption from Federal income tax’ that the Institute owed taxes from past years and in future years because the IRS claimed we were operating a list rental business,” she said. “It was a truly insane finding as we have a small staff, we use a mailing company to make all list rental decisions for our mailings and have nothing at all to do with list rentals. After additional thousands more in legal costs in the appeal of this ridiculous finding that we ran a list rental business, we were finally totally cleared by the IRS.”