TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

A Member of the Law Professor Blogs Network

Saturday, June 28, 2014

The IRS Scandal, Day 415

IRS Logo 2Tax Update Blog:  Why Did Lois Lerner Work at the IRS?:

This question came to mind in discussing the Lerner emails with a reader, who noted how a Politico piece about the Grassley email chain revealed this week pointed out this high-level IRS leader’s evident lack of tax skills:

Former ex-IRS tax exempt division chief Marcus Owens said the email chain shows Lerner knew very little about tax law, as there would have been nothing wrong with Grassley and his wife attending such an event, so long as the income was reported. It is nothing that rises to the level of referral for examination,” Owens said.

It is a mystery.  Her Wikipedia biography shows that she was a cum laude graduate of Northeastern University and the Western New England College of Law.  She worked as a high-level attorney at the Federal Election Commission, but moved to IRS as “Director Rulings and Agreements” in the exempt organizations branch of the IRS.  She rose to Director of Exempt Organizations in 2006.

Her resume, then, is that of a bureaucrat, rather than a tax practitioner or specialist.  She apparently never practiced tax law before moving into her important policy position — important in the tax world, anyway.

This sort of thing may be common in the federal bureaucracy.  It’s likely that she got a raise for the move, or something.  But it seems that while you could take the girl out of the FEC, you couldn’t take the FEC out of the girl.  She took it upon herself to monitor the electoral process with the tools of the tax law.

Megan McArdle explains why that was a bad idea:

This exchange suggests that Lois Lerner not only didn’t have a good, basic grasp of the tax law she was supposed to be administering, but also viewed her job as an extension of her work at the Federal Election Commission.

That’s not what the IRS is for. The IRS is not given power over nonprofit status in order to root out electoral corruption or the appearance of it. It is given power over nonprofit status in order to make sure that the Treasury gets all the revenue to which it’s entitled

Unfortunately, politicians see the tax law as the Swiss Army Knife of public policy, and it’s unsurprising that an IRS bureaucrat would see it the same way.

Moreover, Lerner’s overbroad instincts also seemed to kick into high gear when Republican politicians were involved. Of course, such reports might well be survivor bias — Republicans are complaining about Lerner, while Democrats who also had run-ins with her may be keeping quiet for fear of fueling the fire. At this point, however, the fire is burning merrily on its own. If Democrats who encountered Lerner’s overzealous use of her powers are out there, they’d do well to come forward and tell their stories to reassure Americans that even if her actions were overbroad, they weren’t broadly partisan.

They would have emerged by now.  The stats, as we noted yesterday, demonstrate one-sided enforcement.

Chart

It’s unlikely that Ms. Lerner came to the IRS with the idea of using her position to harass the opposition.  She just happened to be in a position to do so when applications from groups she didn’t like — perhaps that she even saw as dangerous and wrong — came across her desk.  It’s possible that she did it entirely on her own.  And that’s the scariest thing — a bureaucracy that moves on its own to squash ungoodthinkers is much more dangerous than a top-down conspiracy.  It may be hard to replace an administration, but it’s almost impossible to replace a bureaucracy.

New York Times:  Is The Times Ignoring a Scandal at the I.R.S.?:

Has The Times been interested enough in the politically charged events involving the Internal Revenue Service? Many readers don’t think so. ...

I asked David Joachim, the Washington-based reporter and editor who has written several of the I.R.S. stories, to respond to this reader and others who believe The Times has not pursued the story aggressively enough.

Mr. Joachim responded by email. He noted that reader comments on the stories show how polarized the feelings are:

One side sees a Nixonian abuse of power and cover-up; the other sees an effort to smear the White House for electoral gain in the midterms. That stuff brings out passions. ... We think we’ve paid copious attention to this story, and we will continue to do so. It’s an important story.>/em>

My take: The Times was somewhat late in beginning to cover the latest development about the lost emails. My office had begun to field several days’ worth of reader protests on the lack of attention when the first story finally went online. Despite that slow start and the quiet display of the subsequent stories (an analytical piece might have been a good choice for the front page), The Times has given its readers insightful coverage of a situation heavily clouded by partisan politics.

http://taxprof.typepad.com/taxprof_blog/2014/06/strong-5.html

IRS News, IRS Scandal | Permalink

Comments

Professor, aside from the fact she had as much real-world experience as many law professors, and aside from the fact that you are citing Megan McArdle, an MBA infamous for not being able to do high-school math, these years included a major right-wing political organizational wave. It's not surprising that there'd be far, far more suspicious names on the right.

How many organizations were being formed using 'Tea Party' before their side lost the White House?

Posted by: Barry | Jun 28, 2014 8:45:06 AM

Lerner's story doesn't pass the smell test from the first sentance, that the invitations were "accidentally" swapped.

Posted by: apetra | Jun 28, 2014 10:29:56 AM

I can't find the source for your stats graphic. Could you post a link or a steer (I checked yesterday's roundup and couldn't find it).

Posted by: Cecil Turner | Jun 28, 2014 11:04:22 AM

Meanwhile, in news about the former Chairman of the House Ways and Means Committee: Charlie Rangel (Democrat - NY) Failed to Report All-Expenses-Paid Trip to China ...by leaving it off his annual financial disclosure, Rangel is set to never acknowledge he went abroad on the all-expenses-paid trip.

Posted by: Woody | Jun 28, 2014 9:39:29 PM

Lerner is another example of the failure of government. She should not have been in the IRS. Being an attorney does not make able to perform every job. I was in the IRS and saw many people who had no tax experience in high level positions including the last Commissioner and the current one. There are plenty of qualified tax attorneys and tax CPA who could do the job but apparently the executives at the IRS do no want to confuse anyone with actual knowledge or experience in tax.

Posted by: Sid | Jun 28, 2014 9:40:14 PM