Snooping on Taxes

So tangled is Washington's subterranean world of spying, intelligence gathering and undercover investigation that any abuse found in one agency seems destined to expose related illegalities in others. After pursuing the CIA for more than nine months, Democratic Senator Frank Church's Select Committee on Intelligence Activities last week shifted to the Internal Revenue Service and its harassment of citizens for political purposes. En route, the committee took potshots at the FBI as well.

Phony Letters. The trail from CIA to IRS was marked by a once secret CIA memo unearthed by Church. It related how in 1967 a CIA official had warned IRS that the radical magazine Ramparts was planning to publish articles critical of the CIA and the whole Lyndon Johnson Administration. The CIA memo urged that "the corporate tax returns of Ramparts, Inc., be examined [by IRS] and that any leads to possible financial supporters be followed up by an examination of their individual tax returns."

IRS did indeed audit Ramparts' taxes, though that did not stop the magazine from disclosing that the CIA had financed and infiltrated activities of the National Students Association.

The FBI came under fire from the Church committee's scrutiny because it also had made a highly improper request of IRS. In 1964, the committee revealed at a public hearing last week, the FBI asked IRS for the names of donors to Martin Luther King's Southern Christian Leadership Conference. According to Church, the FBI got the names from IRS and planned to send out phony letters, using the stationery of the target civil rights group, to all donors. The letters, which were to have included King's copied signature, would have warned that IRS was launching an investigation of all donations to the group. The committee is still uncertain whether the plan actually was carried out and is investigating further.

The two incidents led the Church committee to interrogate IRS Commissioner Donald Alexander about such abuses, even though he was not in charge at the time they occurred. To the committee's apparent surprise, Alexander readily admitted that IRS last year routinely received--and meekly fulfilled--requests from other agencies for information on no fewer than 29,529 income tax returns. The inquiring agencies included the Justice Department, Department of Agriculture, Department of Commerce, Customs Bureau and Government Accounting Office. Moreover, Alexander said, IRS continues to comply with all such requests, without inquiring as to whether they are entirely proper or not.

"Just about anyone in Government can acquire personal tax information," protested Minnesota Senator Walter Mondale. "The returns can be requested and used for illegal purposes." The mild-mannered Alexander agreed, although he claimed that the Internal Revenue Code makes IRS acquiescence in such requests almost mandatory. In actual fact, the code says only that IRS "may" supply such information; it need not do so. With some sympathy, Mondale asked: "How do you say no to a President?" Replied Alexander: "With extreme difficulty and some trepidation."

Alexander was praised for abolishing a special IRS unit (the Special Services Staff), which had been set up during the Nixon Administration to examine the tax status of controversial, but wholly legal, political and charitable groups. The IRS between 1969 and 1973 had also fulfilled an FBI request to check the taxes of some 8,000 American citizens and 3,000 organizations, including Columnist Joseph Alsop, then New York Mayor John Lindsay, Entertainer Sammy Davis Jr., Author Norman Mailer, B'nai B'rith, Associated Catholic Charities, Americans for Democratic Action, the John Birch Society, Common Cause, the New York Review of

Books and sponsors of rock festivals. Alexander asked the committee to propose legislation that would specifically shield IRS from such improper pressures from other agencies of Government.

Wrongly Accused. The committee did not ask the IRS Commissioner about charges, brought by disgruntled members of his own investigative staff, that he had improperly halted an IRS probe of wealthy U.S. citizens who may have filed false tax claims based on income-losing ventures in the Bahamas. Church doubted if this fell under the committee's scope. Privately, committee members seemed satisfied that Alexander had been wrongly accused; he had prudently interrupted the investigation because some of the IRS evidence might have been "tainted" by the way it was acquired. An IRS undercover agent apparently had supplied a Bahamian banker with a girl friend, then removed from the banker's briefcase and copied lists of American depositors while he was busy with her. The Justice Department is looking into Alexander's handling of the matter but is expected to clear him.

This file is automatically generated by a robot program, so viewer discretion is required.