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Monday, September 24, 2012

New York Attorney General Rebuffs Congressional Republicans


Attorney General Eric T. Schneiderman of New York on Monday rebuffed demands from Congressional Republicans to refrain from requesting tax returns and other information from tax-exempt groups that have spent heavily on campaign ads.

In a letter to Senator Orrin G. Hatch of Utah, the ranking member of the Senate Finance Committee, and Representative Dave Camp of Michigan, the chairman of the House Ways and Means Committee, Mr. Schneiderman asserted the right to request federal tax documents from such groups and subpoena them if necessary. Mr. Hatch and Mr. Camp had written to Mr. Schneiderman last week insisting he route such requests through the Internal Revenue Service.

Mr. Schneiderman sai d that the two lawmakers had misrepresented federal rules on the matter and that law enforcement officials routinely seek such documents on their own.

“While you correctly identify procedures for obtaining tax returns and tax return information from the I.R.S., those procedures do not prohibit state authorities from requesting such documents or information directly from taxpayers,” Mr. Schneiderman said. “The Internal Revenue Code in no way precludes a nonprofit or business from sharing its own tax returns or tax return information with law enforcement officials voluntarily, in response to a subpoena, or as required by state laws requiring disclosure. Indeed, state and local law enforcement agencies frequently seek such information when investigating criminal activities, including organized crime, narcotics trafficking, financial fraud and money laundering.”

Mr. Schneiderman has been investigating the election spending of ta x-exempt groups and whether they have properly registered with his office when soliciting money in New York, as required by state law. Separately, his office is examining strategies used by private equity managers to reduce their taxes, potentially in violation of federal or state law.