Chaka Fattah Jr.: Why I’m Fighting the IRS

My civil suit is not about the criminal investigation into my finances. It's about the government following the rules.

Guest Commentary: Chaka Fattah Jr. is suing the IRS for $10 million. He is the President of 259 Strategies, LLC, and the son of Rep. Chaka Fattah (D-Pa.).

Thanks to the federal government ruining my life, I have had 30 months to spend time determining what will ultimately be the story of my life. After much reflection, I have come to a simple conclusion: My life story will be a good one.

In the past two weeks, a federal judge issued a ruling allowing my $10 million dollar lawsuit against the IRS to continue to trial. The lawsuit, Fattah v. United States, was filed in the U.S. District Court for the Eastern District of Pennsylvania in February 2014.

This coming after much hard work by both myself and an experienced lawyer, Christopher D. Belen, a tax division attorney who is representing the government in the civil action. Mr. Belen works at what political insiders refer to as Main Justice, the Washington D.C. office of the U.S. Department of Justice. While I can’t speak to the time Mr. Belen dedicated to this matter, I have personally reviewed over 2,000 pages of research using resources such as the Public Access to Court Electronic Records (PACER).

As a taxpayer, it’s ironic that some of my tax dollars are going to pay to defend cases such as this, where the government has clearly violated the fundamental principles espoused in the U.S. Constitution.

The court ruling reinforces the fact that a layperson — a non-lawyer with no formal legal training — can take his argument against the most powerful institution in this country, the United States government, to the courts for a public trial. If a citizen does their research on the law and civil procedure, they can have a trial even against an adversary with unlimited resources. While this ruling affects my life in a very personal way, this is a good reminder of our American values of equal protection and due process.

The government’s court filings called my claim of a media leak of a tax investigation to The Philadelphia Inquirer and The Washington Times a “logical fallacy.” This, despite the fact that I had no prior knowledge of their actions that day, and therefore could not have tipped off the media myself. Due to grand jury secrecy and their need for an element of surprise to preserve supposed evidence, it is not plausible that I would have been given prior notice.

Hence, I conclude that the source of the media leak must have been government employees who have an obligation to uphold grand jury secrecy. Not to mention: I had no incentive, financial or otherwise, to damage my own reputation. No one would, on purpose, cause themselves to lose upward of $1 million in income.

Most people think of grand jury secrecy as something that only protects the jurors and witnesses who — out of fear for their safety or other concerns — need privacy in order to preserve the integrity of our justice system. However, grand jury secrecy also protects the rights of a citizen under investigation.

Grand jury secrecy is a well-settled issue of federal law and statutory interpretation.

The U.S. Supreme Court, in United States v. Sells Engineering, Inc. (1983), has said “[g]rand jury secrecy is as important for the protection of the innocent as for the pursuit of the guilty.”

In Lucas v. Turner (1984), the Seventh Circuit Court of Appeals said “[o]ne of the principle reasons for preserving the secrecy of grand jury proceedings is to protect the reputation of both witnesses and those under investigation.”

Also, the Federal Rules of Criminal Procedure, specifically 6(e), protect individuals from government abuses concerning the release of investigatory information to the public.

The court decision in Fattah v. United States, filed last week, stated “the allegations that an IRS official confirmed to news reporters that criminal investigators were at Fattah’s residence are sufficient to raise an inference that his information was disclosed. Section 6103 does not limit ‘disclosure’ to information which is an ‘on the record’ comment published in a news article. ‘Disclosure’ [under section 6103] is defined as ‘the making known to any person in any manner whatever a return or return information.”

Further, the court said, “One could reasonably infer that the media showing up at Fattah’s residence before 7 a.m. was not fortuitous and was instead the result of advance notice. These allegations, if proven, together with the IRS spokesperson’s acknowledgment that IRS criminal investigators had been at Fattah’s residence ‘on official business,’ could support a finding that there was a violation of section 6103. Therefore, Fattah has stated a claim … against the IRS.” (p.22)

The ruling allows my claim under section 6103 of the tax code to move forward to trial.

Section 6103 protects confidential taxpayer information from public release. This includes the taxpayer’s identity, home address, the nature and source of his (or her) income, the amount of that income, and the existence of an investigation.

The protections under section 6103 afforded to all taxpayers have been the subject of several hearings this year as part of the never-ending scandal at the IRS regarding former official Lois Lerner and her alleged targeting of conservative groups.

On June 10, 2014, House Oversight Committee Chairman Darrell Issa (R-Ca.) and Rep. Jim Jordan (R-Oh.), Chairman of the Subcommittee on Economic Growth, Job Creation and Regulatory Affairs, sent a letter to Attorney General Eric Holder regarding the FBI’s receipt of a 1.1 million-page database on 501(c)(4) tax exempt organizations, accusing the IRS of breaking federal law, namely section 6103 of the tax code.

Chairman Issa and Rep. Jordan are on to something with their repeated statements that the IRS has broken the law, including laws regarding 6103 as it relates to million of taxpayers. Clearly, while the House Oversight Committee has not held hearings in my case, they have addressed the same section of the tax code in many hearings, letters, and press releases.

My civil suit is not about the criminal investigation into my finances; it is about the government following the rules as they pursue Americans who have, at the time, not been charged with any crime. To be sure, absent a conviction, the government has no right under the U.S. constitution to deny any citizen the equal protection of our laws.

In other words, everyone is treated the same.

The IRS is one of the most feared agencies of the federal government and perhaps the agency which most Americans deal with the most on a fairly consistent basis.

I will be satisfied with the employees of the IRS and other individuals coming into federal court and explaining their actions leading up to what I contend was a media leak and the viral impact afterward. While I am seeking actual and punitive damages, I undertake this action primarily to deter what I consider to be egregious conduct and hold the government accountable.

I contend that the federal government leaked my name and address, among other things, to two media outlets on February 29, 2012, and it is fair to say they destroyed my business in doing so. My management consulting firm, 259 Strategies, LLC, which I founded in 2005, had in the two full calendar years prior to the raid in February 2012 earned $636,000 in sales, and $334,000 in profits. For those dollars, paid by clients of my firm, I worked extremely hard. It is also safe to say that if my work product was not much better than cheaper and, in some cases, more expensive, options available to my clientele in the market for professional services in Philadelphia, that those figures would be unlikely. That is why my focus in the civil suit is on proving liability, because damages are easy to prove based on my past history of financial success. There is no single event in my life or in the past two and a half years that has impacted my business or personal life in a comparable way. That much I can easily prove.

I recently made a commitment to help a worthy charity increase their revenue, execute better on their strategies, and to develop creative marketing ideas that increase loyalty and event sponsorships. It is the same type of work that made me successful previously, only in this instance for a non-profit. Good ideas remain valuable, despite everything the government has done to me.

If the court ends up awarding me $10 million, or anything close to it, I am confident that in the future federal prosecutors and agents at the FBI and IRS, will be much more careful. Perhaps preventing media leaks will actually assist them in going after actual criminals, and thereby, help the U.S. Department of Justice in their pursuit of the fair administration of justice under our laws.

The question of how much I recover will be left up to the finders of fact, which in these types of cases is either the judge or the jury. If there is any doubt remaining, I am not afraid of the federal government, and I remain confident in my future success.

Until then, I will continue to work on taking actions to shape my life story.

I promise, it will be a good one.

Follow @Cfattahjr on Twitter.