IRS inspector general probes whether agency abused Virginia tea partier
The Inspector General of the U.S. Treasury Department is investigating whether an environmental group pressured the Internal Revenue Service into auditing a Virginia farmer and tea partier, according to attorneys, policy analysts and other sources familiar with the case.
But the investigation has not discouraged IRS auditors, who are expanding their audit of Martha Boneta in what has become a high-profile dispute over property rights.
Boneta told The Daily Caller in an interview that she has been asked to submit “reams and reams” of new information in addition to the original audit request.
Boneta said that she and her legal representatives recently met with a special agent of the U.S. Treasury Inspector General for Tax Information (TIGTA) “on two separate days, for almost five hours.”
While Boneta would not comment on the details of the meeting, she did say the “close coordination and collusion” between the Piedmont Environmental Council (PEC) and the Fauquier County government in Virginia could become central to the ongoing investigation. The meetings with the special agent took place earlier this summer and with witnesses as recently as this past week.
“We cannot confirm or deny that there is any investigation,” a spokesman in the TIGTA office told TheDC. “We are legally prohibited from commenting. But if you want to do a story, no one here can object.”
Boneta, who is actively pushing for new property rights legislation in the state, is convinced she is on the receiving end of a “deliberate, persistent, coordinated assault.”
She became the subject of an IRS audit after the PEC sued her over the terms of a conservation easement that sits on her property and after Fauquier County issued her a series of citations based on alleged zoning violations that could amount to thousands of dollars in fines.
Email messages and other written information Boneta obtained through a Freedom of Information Request (FOIA) show PEC and Fauquier County government officials discussed her case at length in a steady chain of emails and other written messages that were exchanged in 2011 over a period of several months.
At one point, Peter Schwartz — a county supervisor who previously served as a PEC board member — discussed having Boneta’s mortgage called in with Phillip Thomas, a real estate mogul who previously owned the land that includes Boneta’s farm.
In his correspondence, Schwartz made it clear that county officials did not approve of how Boneta used her property. In response to Schwartz, Thomas’s law firm then sent a letter to Boneta’s mortgage company requesting Boneta’s mortgage be called in or sold.
Thomas, who is the owner of Talbot Real Estate in Middleburg, Va., sold the property to the PEC back in 2000. The PEC then sold a 64-acre portion of this land to Boneta in 2006.
The PEC is a 501(c)(3) tax-exempt organization based in Warrenton, Va. dedicated to preserving the “rural economy, natural resources, history and beauty” of a 9-county region of Virginia. The PEC wields control over farmland in the region by convincing farmers to sign onto “conservation easements,” which restrict how farmers can develop their own property in exchange for tax benefits. The land the PEC sold to Boneta included a conservation easement.
She doesn’t know what exactly led to the IRS auditing her, but she suspects at least one well-connected PEC official was involved.
Margaret “Peggy” Richardson — who served as President Clinton’s IRS commissioner in the 1990s — is now an executive board member of the PEC.
But in an interview with TheDC, Richardson denied having any knowledge of Boneta’s audit.
“I don’t know Ms. Boneta, and I don’t think I’ve ever seen her in person or on TV,” Richardson said. “I certainly have no interest in orchestrating anything concerning her.”
Richardson said it’s understandable that the Boneta audit would be viewed with suspicion, given “the external climate” surrounding the IRS and the ongoing congressional investigations into the agency’s treatment of tea party groups.
“I’m not aware of any internal IG investigation that involves me or any PEC officials,” she told TheDC.
The audit identifies Fairfax, Va.-based Byron C. Jose as the IRS agent requesting information from Boneta about her Fauquier County farm for the 2010 and 2011 tax periods.
The property in question — called “Liberty Farm” — covers 68 acres in the Paris, Va. section of the county, about an hour’s ride from Washington D.C.
“It has taken months to complete everything the auditor is now asking for,” Boneta said. “They are even asking me for receipts that are less than 50 dollars.”
Boneta’s legal battles have led Virginia Republicans to push for passage of the “Boneta Bill” in the state legislature, which is designed to protect the right of farmers to engage in commercial activities.
Originally, the bill was proposed as an amendment to the existing Right-to-Farm Act, which critics say is loosely worded and ineffectual. A new version will reportedly be introduced sometime after the November elections.
Both the PEC and the county are on record opposing the “Boneta Bill.”
Zoning Board administrator Kim Johnson claims that Boneta sold fresh fruit, vegetables, beverages and homemade handicrafts out of her on-site farm store, in violation of the amended zoning laws, despite the fact that Boneta had a retail farm store business license.
But Mark Fitzgibbons, a Northern Virginia attorney who specializes in constitutional law, said in an interview that the zoning amendments were “conspicuously used only against Boneta” and that “county officials concocted false information to support charges, which resulted in the violation of traditional farm commerce and constitutional rights.”
The Boneta Bill is designed to “reverse unlawful acts by the county, and to give farmers remedies for when counties violate their rights,” he added. Fitzgibbons had a hand in crafting the legislation.
Fitzgibbons said he learned of the IRS audit from Schwartz, the county supervisor with close ties to the PEC who sought to have Boneta’s mortgage called in.
Fitzgibbons told TheDC that Schwartz informed him of the audit at the county supervisor’s private residence on Saturday, July 21, 2012 — several days before Boneta received official notice.
It is a felony offense for any government official to knowingly reveal that an audit is in motion.
“Peter did not reveal to me who told him, but that’s probable cause that someone at the IRS, and maybe elsewhere, intentionally broke the law by disclosing the audit,” Fitzgibbons said. “It fits into a larger, ugly pattern of the feds breaking the law to intimidate and malign everyday Americans.”
Fitzgibbons says he met with the inspector general agent who met with Boneta in Falls Church, Va. to discuss the audit.
The official IRS notice of the audit arrived in the mail to Boneta just a few weeks before the Fauquier County Zoning Board of Appeals (ZBA) ruled in August to uphold a series of $5,000 per day fines based on the citations that were initially issued in April 2012.
Boneta has been forced to close her farm store. She is now suing the Fauquier County Board of Supervisors, the county’s Board of Zoning and Johnson, and the zoning administrator for $2 million in damages in Fauquier County Circuit Court.
Boneta points out that she has a “retail business license” and should have been grandfathered into any zoning changes that were made.
If special groups and government officials succeed in silencing individual Americans, Boneta says, First Amendment rights will lose their meaning.
“That’s why the internal investigation of my audit and others across the country is so necessary,” she told TheDC. “This is about all Americans. If it could happen to me, it could happen to anyone regardless of political beliefs. As an organic farmer, I believe property rights and economic freedom are issues for all Americans. Once our small family farms are gone, they are lost forever.”
Boneta’s FOIA documents show that Heather Richards — vice president of conservation and rural programs with the PEC — sent several letters and email messages addressed to county supervisors and zoning board officials that discussed the easement.
Email messages also show that Richards met with county officials to discuss the zoning issues impacting the Boneta farm. County officials wrote back to Richards confirming a meeting between her and Schwartz, to discuss the easement and the zoning changes.
Schwartz did not respond to multiple requests for comment. But Richards told TheDC that the PEC’s influence has been greatly overstated.
“To my knowledge the only letter on the zoning issue offers clarification about the easement and the litigation we have over it,” she said. “We were concerned at the time that the issue of our conservation easement and what we are enforcing over the terms of our easement were being conflated and confused with the zoning issue. I had a conversation with a variety of people at the time to clarify the difference between the easement and the zoning issues. And PEC’s concern is with the easement itself. We didn’t take a position on the zoning. ”
Since Boneta’s audit did not come from the national IRS office, it is more likely a “computer kicked it out” for innocent reasons based on what was in or omitted from her tax return that is not related to any kind of coordinated effort, Richardson, the Clinton IRS official, said.
But she did express concern that county officials were aware of the audit before it officially arrived in the mail.
“Sometimes coincidences happen and people don’t believe it, but they do,” she said. “But I don’t know why Peter Schwarz or anyone else in the county would be talking to the IRS.”
Bonner Cohen, senior fellow with the National Center for Public Policy Research, does not buy into the idea that Boneta’s audit was the result of happenstance.
“The cozy relationship between power-hungry Fauquier County officials and the well-funded PEC — both intent on bullying Martha Boneta — is symptomatic for the stacked deck so many Americans are facing,” he said. “No sooner had she stood up to their intimidation, then she was slapped with an IRS audit. Pure coincidence, of course.”
The Boneta Bill passed the Virginia House of Delegates in a 77-22 vote in February. The legislation was later blocked in the state’s Senate Agriculture Committee in an 11-4 vote, but Republican Delegate Scott Lingamfelter has vowed to reintroduce the bill next year.