IRS No Stranger to High-Profile Scandals Involving Presidents, Civil Rights Leaders, Religious Groups

May 15, 2013 -- intro: President Obama said he didn't find out about the Internal Revenue Service targeting the tax-exempt status of conservative political groups until media outlets started reporting it on May 10. He demanded accountability and said he wanted to see an internal IRS investigation.

Obama may have had nothing to do with this latest IRS fire storm, but the IRS is no stranger to high-profile scandals involving presidents, civil rights activists and religious organizations.

quicklist:1title: FDR Imposes Audits on Andrew Mellontext:Although many presidents have used the IRS to ease the fulfillment of their political agendas, President Franklin D. Roosevelt may have been the trailblazer of strategic IRS investigations.

FDR focused his efforts on derailing a slew of perceived opponents, including Andrew Mellon, who was the secretary of Treasury under President Hoover. In the Roosevelt administration, Mellon was subjected to intense income tax audits, and endured a two-year civil action lawsuit, which was referred to at the time as the "Mellon Tax Trial."

Mellon claimed a $139,000 refund on his 1931 income tax and insisted that he had properly paid all of the taxes he legally owed the government. The IRS insisted Mellon owed the government $3,089,000 in taxes for the 1931 fiscal year, and called for a detailed overview of Mellon's financial assets.

Mellon was eventually exonerated several months after his death.

quicklist:2title: IRS Audits Martin Luther King Jr.text: Few would peg civil rights leader Martin Luther King Jr. as a felon. But in February 1960, the Alabama grand jury issued an arrest warrant for King on two counts of felony perjury for fraudulent tax returns in 1956 and 1960.

The state of Alabama audited King's tax returns in January, claiming that he owed more than $1,700 in state taxes and had received unreported funds from the Montgomery Improvement Association and the Southern Christian Leadership Conference.

A group of King's supporters rallied together to create the Committee to Defend Martin Luther King and the Struggle for Freedom in the South. This committee issued a press release rebuking the charges, and denying the state's estimation of King's supposed $45,000 income.

"The officials of Alabama reached their fantastic figure by the shoddy device of adding to King's income sums spent on transportation, hotels and other expenses in connection with his extensive travels on behalf of civil rights," the press release stated.

King testified in his own defense when the case went to trial in May 1960, revealing that the tax auditor had told King he was under pressure from higher-ranking officials to find some kind of problem with the tax returns. The all-white jury found King not guilty.

quicklist:3title: John F. Kennedy's Ideological Organizations Projecttext:One of the Kennedy administration's better-kept secrets was the Ideological Organizations Project, which used the IRS to target conservative groups' tax exemption status in order to halt their funding.