Caught in the act

A couple of days ago, I commented on the IRS findings regarding political activity in tax exempt organizations and worried about whether the IRS is misusing its power to intimidate. Today, this article appears in the Washington Post:

The Internal Revenue Service recently audited the books of a Texas nonprofit group that was critical of campaign spending by former House majority leader Tom DeLay (R-Tex.) after receiving a request for the audit from one of DeLay's political allies in the House.

The lawmaker, House Ways and Means Committee member Sam Johnson (R-Tex.), was in turn responding to a complaint about the group, Texans for Public Justice, from Barnaby W. Zall, a Washington lawyer close to DeLay and his fundraising apparatus, according to IRS documents.

Johnson, a member of the subcommittee responsible for oversight of the tax agency, sparked the IRS's interest by telling IRS Commissioner Mark W. Everson in a letter dated Aug. 3, 2004, that he had "uncovered some disturbing information" and received complaints of possible tax violations.

Johnson said he was sure the IRS would follow up. "I ask you to report back your findings of each of these investigations directly to me," he told Everson in the letter, according to a copy obtained by The Washington Post.

The IRS sent two auditors last year to comb the 2003 books of Texans for Public Justice and an affiliated foundation that collected donations for the organization. No tax violations were found, according to a letter the IRS sent the group.

But the circumstances behind the effort -- which were uncovered by the group's director and founder, Craig L. McDonald, using the Freedom of Information Act -- prompted him to allege that the audit was an abuse of the IRS's mandate. He said there was no evidence of wrongdoing in the complaints.

"This audit was political retaliation by Tom DeLay's cronies to intimidate us for blowing the whistle on DeLay's abuses," McDonald said.

[A hat tip to Josh Marshall at TPM]