GOP Wants Hillary Audited

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What’s the worst threat you can think of? The answer to this question probably depends on who you ask. My teenage daughter might say taking away her phone or the threat of somebody unfollowing her on Instagram. If you ask any normal adult person, it might be the threat of physical harm. But if you ask somebody in my circle of friends, it would definitely be the threat of an IRS audit.  There are few things more agonizing than the dreaded audit.

The Republican Party is threatening Hillary Clinton and her family’s charity, the Clinton Health Access Initiative (CHAI), not with legal action, but with an IRS audit. Of course, they can’t audit her themselves; they filed a formal complaint asking the IRS to audit the charity. CHAI staved off an investigation back in May by agreeing to file amended returns and fix the problem. But now they are taking the position that the income was correctly stated and amendments are not necessary. As the Democratic front runner, Hillary will undoubtedly attract plenty of scrutiny, and the Republicans will do their best to portray her as a tax cheat.

Clinton Foundation Under Fire for Tax Errors

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Filing an amended tax return is normally not that big of a deal.  It is not uncommon for folks to make mistakes or leave out information on their Form 1040 personal income tax filing.  To amend a previously filed Form 1040, you need to complete a “1040x.”  If you want to make corrections on multiple tax years, you need a separate 1040x for each year and you need to mail them in separate envelopes to ensure they are processed correctly.  The basic structure of a 1040x is pretty straightforward: Column A shows the figures as reported on your original 1040, Column B shows the corrected figures, and Column C shows the difference between the two.  Furthermore, barring other relevant facts, the filing of a 1040x does not automatically put you into a high audit risk group.

The problem with Hillary Clinton and her foundation is there are a few “other relevant factors” that have placed their actions in the spotlight (catch up on the story here).  For one, we’re talking about million dollar mistakes, meaning they put “zero,” when the correct number was something in the tens of millions of dollars range.  Kind of hard to swallow, right?  And similar “mistakes” were made three years in a row.  In the words of charity law experts:

It [is] not remarkable for a charity to refile an erroneous return once in a while, but for a large, global charity to refile three or four years in a row [is] highly unusual.

Now House republicans are calling for an IRS investigation.  Most letters to Commissioner John Koskinen would probably be ignored or referred out to a different IRS department in typical IRS style, but I’m guessing this one will get adequate attention.