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FOX NEWS NETWORK
SHOW: THE O'REILLY FACTOR (20:12 ET)
February 2, 2001, Friday
Transcript # 020202cb.256
SECTION: News; Domestic
LENGTH: 1241 words
HEADLINE: Is the IRS Afraid of Jesse Jackson?
GUESTS: Sheldon Cohen
BYLINE: Bill O'Reilly
BODY:
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
O'REILLY: Continuing now with our lead story, the saga of Jesse tax returns. For example, in 19 -- in '98 and '99, he raised $12 million for the Citizenship Education fund but spent only $47,000 on education. Hello! IRS, are you out there?
Joining us now from Washington is Sheldon Cohen, a former commissioner for the Internal Revenue Service.
Mr. Cohen, I mean this is -- to me -- I have looked at these tax returns now, and I can't believe what I'm seeing here, and I can't believe that the IRS hasn't audited Jackson's concerns in 12 years, can you?
SHELDON COHEN, FORMER IRS COMMISSIONER: The Revenue Service for the last 10 years or probably even longer, starting back in the Reagan administration, has been auditing less and less returns. When I was in office, they audited about two, two-and-a-half-million returns. Today, they audit something less than a million, a million and a half, and the -- of course, the population has grown in that 30 years period. So...
O'REILLY: All right, but we're talking -- we're talking the -- a huge, huge tax-exempt concern here.
COHEN: No, no, no. No, no, no. You're talking about...
O'REILLY: We're talking one of the most famous people in the United States...
COHEN: Yeah. Well...
O'REILLY: ... and questions have been raised.
COHEN: Yeah. Put it in perspective. This is not the biggest foundation that is not audited. It ought to be audited, and -- and, in light of the news that's been in the newspapers for the last few days in regard to using the funds of the organization to pay what might be
O'REILLY: His mishandling of that.
COHEN: ... his mishandling of that young woman...
O'REILLY: Right. Right.
COHEN: ... would be -- would be improper, and...
O'REILLY: All right. Let me...
COHEN: ... and I suspect the Revenue Service will take a look at that and will...
O'REILLY: You suspect it would. You would think they would, but there's something wrong at the IRS, and I'll tell you why. This Citizen Educationship -- Citizenship Education Fund in two years raised $12 million, as I said. Forty-seven thousand goes to education. Is that not a red flag for the IRS?
COHEN: I -- you -- you're -- you've got an advantage on me. I haven't seen the returns.
O'REILLY: All right. I'll tell you -- well, just trust me. Trust me that this is true. I've got it right here.
COHEN: Well, you know, I -- I take your word for it.
O'REILLY: Is that not -- is that not a red flag, Mr. Cohen?
COHEN: I don't know what they spent the rest of the money for. I mean, it...
O'REILLY: OK, but wouldn't you as a professional say, "Forty-seven thousand on education. Twelve million raised."
Now let me read you something: "$1,307,393 in '99 on consultants, which is what Mr. Reynolds is going to be, for Rainbow PUSH. Isn't that a lot of money on consultants?
COHEN: You -- you and I both suspect that's not proper, but, on the face of it, that doesn't mean it's not proper. So, for example, suppose those consultants were studying the issue of whether early childhood education for poverty kids helps them when they get to school. If -- if the studies are pursuant to the educational goals of the foundation, that would be all right, but I suspect...
O'REILLY: All right, but I'm saying to you...
COHEN: ... they're not, but I don't know...
O'REILLY: I'm not accusing anybody of anything. I'm just saying that these things are so out of whack -- $12 million raised, $47,000 spent on education -- that a moron, Mr. Cohen, would start...
COHEN: No, no. I -- I...
O'REILLY: ... an audit to find out. There's no itemization here. It's $1,300,000 on consultants. Doesn't say who the consultants are. Why is this man getting away with stuff that the regular American citizen would not get away with at all? Why?
COHEN: Stop making -- if you'd stop making statements and ask me a question, I'd be glad to answer it.
The -- it -- the consultants could or could not be a proper -- you don't know from the face of it, and no tax return shows the detail. It only shows -- for example, when a -- when a large corporation shows salaries, it shows $16 million in salaries. You don't know whether...
O'REILLY: That's not what -- when I fill out my tax return, Mr. Cohen, I -- and I say charitable donations, I list on the tax return each concern and how much they got. I don't list a certain figure, charitable donations, and don't put where the money went. That's what I have to do.
COHEN: I -- I am saying that a -- that it -- that the return, the 990, which is the tax return of an exempt organization, has on the face of it very little detail. There is detail behind it, but they are not required...
O'REILLY: Behind it where?
COHEN: Behind...
COHEN: No.
O'REILLY: All right. Now -- all right. Now, if they're not required
COHEN: They're required -- they're required to make it available to the IRS but...
O'REILLY: Fine. We asked...
O'REILLY: ... for it. We asked for it, Mr. Cohen, and we're supposed to be, because it's tax exempt, able to see it, are we not?
COHEN: No. You are -- you are required -- they are required to give you access to their returns. They are not required to give you access to the books and records. Now...
O'REILLY: All right. So -- but they are required to give you...
COHEN: I am not -- you're putting me in a position where I have to
O'REILLY: That's -- no, that's OK. Look...
COHEN: ... because I don't think they did it appropriately.
O'REILLY: ... I want the -- I want the audience to know what's going on here. You know, I mean -- so he doesn't have to tell me who the consultants are. He just has to say, "I paid $1,307,000 to consultants," but if the IRS goes in and says, "Where are the consultants?" he's got to produce it, correct?
COHEN: Exactly right.
O'REILLY: All right.
COHEN: You would have to produce...
O'REILLY: My last question for you, Mr. Cohen, is...
COHEN: ... a schedule...
O'REILLY: My last question -- he raises, all right, $12 million, $47,000 goes for education. Doesn't that make the IRS say, "Hold it. This doesn't look good." Doesn't it?
COHEN: If the -- if the IRS were properly funded and was auditing the returns it ought to audit, which it's not, it would look at this return amongst many others that require audit.
O'REILLY: All right. You know why -- this is why the bandits are -- and I'm not saying anybody's doing anything, but I'll tell you, Mr. Cohen, this is why the bandits are getting away with it. They know you guys don't care. They know that you're not going to do anything about it.
COHEN: No, no, no. You're saying -- but you're -- look...
O'REILLY: Not you. Not you. Not you.
COHEN: I'm -- exactly right. And, believe me, the people at the IRS care.
O'REILLY: No, I don't believe you.
COHEN: They will...
O'REILLY: I don't believe you for a second, Mr. Cohen, and I don't think anybody watching this broadcast or our investigation for the last year believes you either. But we appreciate your time. And you may be right. I may be way out of line here. But I think this is a disgrace, and I think the IRS is a disgrace.
We'll be right back.
(COMMERCIAL BREAK)
LOAD-DATE: February 3, 2001