The Internal Revenue Service
excerpted from the book
The Lawless State
The crimes of the U.S. Inteligence Agencies
by Morton Halperin, Jerry Berman, Robert Borosage,
Christine Marwick
Penguin Books, 1976
PRESIDENT NIXON: Do you need any IRS (unintelligible) stuff?
JOHN DEAN: Uh-Not at the-. . . Uh, there is no need at this
hour for anything from IRS, and we have a couple of sources over
there that I can go to. I don't have to fool around with Johnnie
Walters [IRS commissioner] or anybody, we can get right in and
get what we need.
(Excerpts from a transcript of a tape recording of a conversation
among President Richard Nixon, John Dean, and H. R. Haldeman,
March 13,1972.)
No agency of the United States federal government retains
more information on American citizens than the Internal Revenue
Service, and no other agency is given more arbitrary powers to
compile this information than the IRS. Tax files are a virtually
endless repository of financial records for all working Americans,
corporations; private associations, and political groups. To determine
that a fair and equitable tax is paid, citizens are required to
entrust a yearly accounting of financial worth to the Internal
Revenue Service detailing the earning and expenses of their daily
lives, charitable and political organizations they support, medical
information and other tangible records covering travel, residence,
and education. Businesses and organizations file similar types
of information with the IRS, including complete lists of employees
and earnings; and tax-exempt organizations are held accountable
for the programs and "political" positions which they
hold.
By law, the IRS maintains far-reaching investigative powers
to enforce tax statutes. Unlike the FBI and other law enforcement
agencies, the Internal Revenue Service may legally investigate
any American without a judicial warrant and without reason to
believe a crime has been committed. Moreover, it can demand the
production of records entirely on its own authority. When marshaled
for purposes above and beyond the collection of revenue taxes,
the Internal Revenue Service is an ominous weapon of the government.
It can endlessly harass all who cross its path, and at the same
time gather information otherwise unobtainable through legal means.
Like the CIA and the FBI, the IRS was used as an instrument
of the government's war against dissent in the 1960s. The IRS
was a valuable component of the overall mechanism: it coordinated
with the FBI and the Justice Department to harass dissidents,
provided information to the FBI and the CIA (which in some cases
was used to disrupt domestic dissent), and was asked to serve
as the president's "hired gun" against various administration
opponents. The IRS divulged its trusted records to the White House
and to the intelligence agencies without following legal procedures
to protect the privacy rights of innocent taxpayers. Yet, unlike
the FBI and the CIA, the IRS acted at the behest of others, like
a programmed robot. There was no J. Edgar Hoover or Richard Helms
to direct the IRS on its campaign against dissent. Instead, it
operated on general orders from congressional subcommittees and
the White House and executed special "hits" against
priority targets.
p198
THE SPECIAL SERVICES STAFF: AN ADMINISTRATIVE COINTELPRO
In 1969, following the inauguration of Richard M. Nixon the
IRS was pressured into playing an even larger role in the secret
government campaign against activist organizations and individuals.
Yielding to the White House and Congress, the IRS created an institutional
strike force against political dissent. Like the attacks on organized
crime in the 1950s and 1960s, the Special Services Staff was designed
to trigger the government's tax-enforcement apparatus on the basis
of political criteria...
On July 2, 1969, officials of the Compliance Division of the
IRS first met to discuss the creation of a group inside the IRS
to examine "ideological organizations" and to collect
intelligence on dissident groups through a "strike force"
approach. Later that month, the Special Service Staff was established
"to coordinate activities in all Compliance Divisions involving
ideological, militant, subversive, radical and similar type organizations;
to collect basic intelligence data, and to insure that the requirements
of the Internal Revenue Code concerning such organizations have
been complied with." The Special Service Staff was a mechanism
to take advantage of the decentralized- character of the IRS.
Its purpose was to gather information on political groups and
individuals throughout the government, and to stimulate audits
by local and district IRS offices based upon this information.
It remains unclear how instrumental White House and congressional
pressure had been in establishing the SSS. Although influenced
by outside pressures, which led IRS officials to believe they
had made a "commitment" to the White House to follow
up on the administration's initial interest, officials within
the IRS assumed responsibility for forming the special unit. As
with the FBI and military intelligence programs, interest from
the higher levels of the White House triggered a bureaucratic
reaction that may have exceeded the expectations of the president
and his aides.
Once in operation, the SSS became a political tool responsive
to the FBI, the Internal Security Division of the Justice Department,
and other government agencies monitoring political dissent. Paul
Wright, who headed the SSS, felt, like J. Edgar Hoover, "that
he was participating in an effort to save the country from dissidents
and extremists," and identified the smaller operations of
SSS with the larger campaign conducted by the FBI. In one instance
where he pressed the Detroit District Office to reopen an audit
case on a group of political activists, he gave as primary reason
that "they are notorious campus and antidraft activists having
records under anti-riot laws. They are the principal officers
in the Radical Education Project, an offshoot of the Students
for a Democratic Society, and have been identified as members
of certain Communist front organizations.... while revenue potential
might not be large in some cases, there are instances where enforcement
against flagrant law violaters would have some salutary effect
in this overall battle against persons bent on destruction of
this government." These were hardly tax-related criteria.
As the July 24, 1969, memorandum creating the SSS had asserted,
"from a strictly revenue standpoint, we may have little reason
for establishing this committee or for expending the time- and
effort which may be necessary." Nevertheless, political considerations
dictate that "We must do it."
Indeed, those in the executive agencies who had initially
pressured the IRS to initiate action against dissident organizations,
saw the Special Service Staff as an important complement to other
methods of harassing political dissidents. The ability to stimulate
an audit of an organization or individual created a legitimate
"administrative" COINTELPRO operation-one which was
particularly effective against those tax-exempt organizations
involved in political activity that had proved difficult to reach.
p201
For the most part, the SSS did not even make the decision about
which groups or individuals were to be watched. Unlike every other
special compliance group within the IRS, in which target selection
is based solely on tax criteria, the SSS initiated investigations
in response to information reports from outside agencies. The
FBI was the single largest source of targets for the Special Service
Staff. In its four years of operation, the SSS received 11,818
separate reports from the FBI, over 6,000 of them classified,
including FBI COINTELPRO reports, and an FBI list of over 2,300
organizations categorized as "Old Left," "New Left,"
and "Right Wing." If the subject of an FBI report had
not already been under examination, the SSS would sometimes begin
a file on that person or group. Information from the FBI comprised
43 percent of the data gathered by the SSS, and in its first year
of operation more than four of every five SSS referrals to the
field for audit noted the FBI as an important source of information.
The Inter-Divisional Information Unit (IDIU) of the Department
of Justice also provided leads for SSS investigations, including
lists of 10,000 and 16,000 persons and organizations that might
potentially engage in civil disturbances, and the Internal Security
Committees of the Congress also provided the SSS with a list of
target groups and individuals. Beyond these sources, the SSS had
access to the army's Counter-lntelligence Compendium which listed
"dissident individuals and organizations, and made contact
with the air force's Counter-lntelligence unit as well.
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