On Thursday’s edition of The Kelly File, host Megyn Kelly invited on attorney Cleta Mitchell, who represents groups targeted by the IRS, to talk about a new House Republican report that found 10 percent of tea party donors were audited by the IRS. So far ABC, CBS and NBC have failed to cover the new report.
After Kelly played a clip of Republican Congressman Charles Boutsany revealing the findings that “after groups provided the information to the IRS, nearly one in ten donors were subject to audit,” she let Mitchell offer a specific example of abuse. [Video after the jump]
CLETA MITCHELL: People have contacted me from all over the country and talking about how they had never been audited before, but they either donated money to a conservative organization or they donated -- in one case, a gentleman is a songwriter and he donated a song. He wrote a song about the Tea Party and it was played at a number of different Tea Party rallies around the country and the IRS not only audited him, but because he didn't charge for the use of the song, they have now said that he doesn't really have a music writing business and are trying to disqualify all of his business deductions. And I have heard story after story after story like this.
The following is the entire segment as it was aired on the May 8 edition of FNC’s The Kelly File:
MEGYN KELLY: Breaking tonight, new allegations the IRS has not only been targeting nonprofit groups but has also been auditing donors. Here is a top lawmaker at a House Ways & Means hearing yesterday.
(BEGIN VIDEO CLIP)
REP. CHARLES BOUSTANY (R), LOUISIANA: Recently, the committee uncovered information indicating that, after groups provided the information to the IRS, nearly one in ten donors were subject to audit. Any abuse of discretion and in audit selection must be identified and stopped.
(END VIDEO CLIP)
KELLY: Cleta Mitchell is an attorney who represents some of these groups targeted by the IRS. Cleta, let's get this clear, your odds of being audited as a regular American citizen are 1 percent, 1 percent get audited. What he is saying is if you happen to be a donor to a conservative group seeking nonprofit status, your odds suddenly go up to 10 percent. And he says that's no accident. This is something the IRS had been denying; he basically says those denials are not true.
CLETA MITCHELL, ATTORNEY: Well, I have to tell you, Megyn, that this is an area I’ve been very concerned about for, and increasingly concerned about, for the last year since this story broke. Because people have contacted me from all over the country and talking about how they had never been audited before, but they either donated money to a conservative organization or they donated -- in one case, a gentleman is a songwriter and he donated a song. He wrote a song about the Tea Party and it was played at a number of different Tea Party rallies around the country and the IRS not only audited him, but because he didn’t charge for the use of the song, they have now said that he doesn’t really have a music writing business and are trying to disqualify all of his business deductions.
KELLY: This --
MITCHELL: And I have heard story after story after story like this.
KELLY: They got the list. I mean, they inappropriately asked these conservative groups seeking tax exempt status for the list of their donors -- inappropriate. The conservative groups provided them, not knowing that this was not legal, not appropriate -- and then the IRS claimed oh, well, we destroyed all the lists, oh except for a few that had many names of donors on them. And now if you happen to be one of those lists, your odds of getting audited go up from 1 percent to 10 percent.
The question is, Cleta, how does this happen? Because the IRS -- the groups that were targeting the conservatives were not supposed to have been coordinating at all with the groups that do the auditing, correct?
MITCHELL: Well, that’s right and one of the things to remember, Megyn, is this is a Rubik’s cube. It has a lot of different sides. The Exempt Organizations unit that Lois Lerner headed is not entitled to the donor information. And when they asked my clients for that, I resisted and said you can’t have that. But remember, that there is another division of the IRS -- and every non- profit, even though they didn’t have their tax exempt status, you are still, as a tax exempt organization, required by statute to turnover to the IRS on a confidential schedule all donors of $5,000 or more. I think the IRS has been taking those donor lists, has been taking the donor lists of the Exempt Organizations unit got improperly, and I believe that those have been -- formed a basis for audit. And I turned that over to the Treasury Inspector General for Tax Administration and I have talked to them about this. And they are trying to figure out how to get their arms around investigating this.
KELLY: How that happened. Yes, the tax chief -
MITCHELL: I think it’s very serious.
KELLY: Is saying every taxpayer deserves the right to assume that they will be treated fairly no matter what their political beliefs, and now that Congressman Boustany is requesting is government accountability office thorough review of the policies behind audit selection. Cleta, thanks for being here.