IRS Approved Clinton Foundation And Scientology, But Targeted Tea Party

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Will there be an IRS investigation of the Clinton Foundation? Even suggesting it sounds laughable, for few can stand up to the Clintons, let alone to a Democratic administration. Besides, the IRS Exempt Organizations Division used to be run by Lois Lerner, and it isn’t clear how much has changed. In fact, we may never get to the bottom of the Tea Party targeting scandal. It almost looks as though the IRS will attack conservative groups but is silent on the Clinton Foundation. Heck, even Scientology got its IRS church status.

When it was revealed in 2013 that the IRS targeted conservative groups, the IRS Commissioner had to resign, but that was about it. Lois Lerner was at the center of the scandal but didn’t suffer any consequences. In fact, she got $129,000 in cash bonuses and retired with a full government pension. She evidently did a good job targeting at the Federal Election Commission, and then she moved over seamlessly to the IRS to do the same. Ms. Lerner is now out of the prosecutor’s eye with no criminal charges, nice bonuses, and a nice retirement. When she broke her silence to Politico, she said she did nothing wrong, claiming that she was the victim.

Given Mrs. Clinton’s email proclivities, Mrs. Clinton’s emails are even harder to find than Lois Lerner’s. And the Treasury Inspector General has just found 6,400 missing Lois Lerner emails. We surely will not see the IRS looking at the enormously wealthy Clinton Foundation, even though several watchdog groups suggest there’s something fishy there. First is the politics, since the tracking of who gives money and who needs something from Hillary’s State Department tracks closely.

 In fact, a whopping 181 donors lobbied the State Department while Mrs. Clinton was there. Coincidence? Even apart from the political pay-for-play fears we may have, just look at the numbers. Charity Navigator says that the Clinton Foundation took in nearly $140 million in donations from individuals and groups. Boy, that must do a lot of good works, right?

Not so fast. It turns out that only approximately $9 million was paid out in direct aid. More than $130 million went to so-called ‘administrative and other expenses.’ Even if that is entirely on the up and up, it sure looks bad. If Clinton family members or friends end up with much of it, there could be a private inurement problem. Charities are supposed to benefit charitable goals, not line private pockets.

Even thinking the best of all of this, the Clinton Foundation’s administrative costs seem awfully high. Of course, we now know that the Bill, Hillary and Chelsea Clinton Foundation will be amending multiple years of tax returns. Upon becoming Secretary of State, Mrs. Clinton promised that the Foundation would stop accepting donations from foreign governments. It turns out there were exceptions, and that the Foundation’s tax filings with the IRS were less than transparent.

Acting CEO Maura Pally posted a statement acknowledging that the Foundation failed to separate government grants from other donations on its tax filings. Ms. Pally wrote that the Foundation intends to refile tax returns. Extensive donations by foreign governments while Mrs. Clinton was Secretary of State violated her promise. Starting in 2010, the Foundation reported for three consecutive years that it received no donations from foreign government sources. It wasn’t as if they didn’t know how to report them.

In prior years, the Foundation reported tens of millions of dollars in such donations. The Foundation is now worrying over the accuracy of the IRS returns from 2010, 2011 and 2012, and later years too. Most taxpayers can’t amend that far back, generally being limited to the last three years. Yet the Foundation says it will “re-file when the review is completed.” Does amending fix everything? It is clear that the Foundation did accept millions in donations from foreign governments, overlapping with the time Mrs. Clinton served as Secretary of State.

Perhaps there are undeleted emails about this on that private email server. The Foundation downplays the errors, noting that the money was included in the overall revenue figures reported to the IRS. Maybe, but the amendments are awkward, highlighting the Foundation’s continued receipt of foreign money while Hillary Clinton was Secretary of State. Besides, sometimes the IRS views amended tax returns as too little, too late. Lucky for Mrs. Clinton, as President Obama told Fox News, there is ’not even a smidgen of corruption’ at the IRS.

For alerts to future tax articles, follow me at Forbes.com. Email me at Wood@WoodLLP.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified profe