Citing a "gap" in its records, a U.S. Tax Court judge has ordered the Internal Revenue Service (IRS) to reveal whether it criminally investigated the Clinton Foundation.
In an April 22 hearing, U.S. Tax Court Judge David Gustafson remanded the case back to the IRS Whistleblower Officer, saying the tax agency’s claim that there was no criminal investigation against the Clinton Foundation was “not supported by the administrative record and thus constituted an abuse of discretion.”
Gustafson suggested that the IRS whistleblower office was withholding important information for the case.
He wrote: “There are facts and information, uniquely within the knowledge of the Whistleblower Office that need to be considered in connection with the resolution of the petitioner’s claim.”
Most of the proceedings in the case, which has been ongoing for some five years, involving the Clinton Foundation and whistleblowers Lawrence Doyle and John Moynihan have been sealed.
While testifying before the House Oversight and Government Reform Committee in December 2018, Doyle and Moynihan alleged that the Clinton Foundation owes between $400 million and $2.5 billion in taxes.
Doyle and Moynihan testified that they had collected approximately 100 exhibits in excess of 6,000 pages, and came to the conclusion that the Clinton Foundation:
• Did not operate as a tax-exempt 501(c)(3) organization;
• Made material misrepresentations to the IRS about its operations and entities;
• Acted as nothing short of a foreign agent thus making its charitable tax-exempt protection void.
Moynihan testified: “The foundation began acting as an agent of foreign governments early in its life and throughout its existence. As such, the foundation should’ve registered under FARA (Foreign Agents Registration Act). Ultimately, the Foundation and its auditors conceded in formal submissions that it did operate as a (foreign) agent, therefore the foundation is not entitled to its 501c3 tax-exempt privileges as outlined in IRS 170 (c)2.”
Doyle and Moynihan filed whistleblower submissions with the IRS over the foundation's suspected misdeeds as early as August 2017. However, the government body appeared to be unwilling to consider their claim despite the IRS website site encouraging everyone to immediately report tax scams.
Having received the final denial from the IRS in February 2019, the two independent expert forensic investigators filed a lawsuit with the U.S. Tax Court.
In October 2020, Doyle and Moynihan scored their first victory in court against the IRS. Judge Gustafson ruled at the time that the IRS's Whistleblower Office had "abused its discretion" in trying to dismiss "specific credible documentation" put forward by Doyle and Moynihan and allowed the case to proceed.
In 2018, the Clinton Foundation declared that it “was one of the most heavily scrutinized charitable organizations in the world and had demonstrably improved the lives of millions of people across American and around the world, while earning top ratings from charity watchdog groups in the process.”
In 2016, the Obama Department of Justice rejected the FBI’s request to investigate the Clinton Foundation’s relationship with the State Department.
"The FBI asked the DOJ to open an investigation into a potential pay-for-play relationship between the State Department and the Clinton Foundation, which spends a very small fraction of its funds on actual charity work, but the DOJ wasn’t interested," The Federalist reported at the time.
The Federalist noted that the organization’s own tax filings contradict the claim that it spends nearly 90 percent of its annual budget on charitable grants. That number, according to the foundation's own data, is more like 10 percent, the report said.
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