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Tuesday, July 15, 2014

The IRS Scandal, Day 432

IRS Logo 2The Weekly Standard:  More Than a Smidgen, by Stephen F. Hayes:

The facts are simple. The IRS systematically targeted conservative and Tea Party groups after their activism proved decisive in the 2010 midterm elections—Obama’s famous “shellacking.” The effects of this targeting were widespread. Some Tea Party groups were neutered in the months before the 2012 presidential election.

Few of the explanations or justifications of this targeting provided by IRS leaders and Obama administration officials have held up. IRS officials at first denied that any targeting had taken place. That was false. They later claimed that the targeting had involved only low-level employees in the Cincinnati office. That was false. They argued that conservative groups weren’t singled out, that progressive groups were subject to the same level of scrutiny. That was false. They argued that the IRS has complied with all requests for information from Congress. That was false.

Three years ago, on June 3, 2011, Representative Dave Camp, chairman of the House Ways and Means Committee, wrote to the IRS requesting all information—including emails and other communication—related to the alleged targeting of conservative groups. Ten days later, Lois Lerner, the woman at the center of the targeting, reported to the IT team at the IRSthat her hard drive had crashed. IRS leaders, questioned repeatedly about Lerner’s emails in subsequent congressional hearings, made no mention of the hard drive crash. Earlier this summer, IRS director John Koskinen disclosed that thousands of Lerner emails—including many of those sent to executive branch agencies—were missing because of the alleged computer problems. From her first appearance before a congressional committee, back in May 2013,Lerner has exercised her right against self-incrimination and refused to testify.

Last week brought a significant new revelation: an email in which Lerner seeks advice about keeping information from Congress. ... She knew that the IRS scandal was about to explode.

At the time Lerner sent the email, IRS officials had recently learned that the Treasury inspector general would be issuing a report the following month criticizing the agency for its targeting of conservative groups. And Lerner’s email came just before she planted a question in the audience at an American Bar Association conference on May 10 in an effort to get out in front of the controversy.

These facts lead to one conclusion: Lois Lerner and other top IRS officials were desperate to keep information on the targeting of conservative groups from Congress. 

It’s crucial to understand why. And that will require a special prosecutor.

Town Hall:  Reality of the IRS Scandal, by Bruce Bialosky (Founder, Republican Jewish Coalition):

People who are not distraught about Lois Lerner and the IRS must have never actually dealt with the organization. As someone who has for 36 years, it is clear that at best we are dealing with fabrications and at worst outright lies and criminal actions. The fact that any American --let alone the national press, Congressional Democrats, and the White House – might not be agitated is dangerous for our society.

First, let us be clear: despite billions of dollars of taxpayer money being spent on improving their computer system, it is still rank. Second, the Internal Revenue has gradually over my career asserted more and more control at higher levels leaving agents and revenue officers less flexibility. That means there is less opportunity for an agent in the field to make their own decisions about any matter.

If you ever sat in an IRS office or waited endlessly on the telephone, you would know that this entire scenario of lost emails is not remotely plausible.

Las Vegas Review-Journal editorial:  Lerner Must Testify Without Immunity in IRS Scandal:

Last week, an Arizona Republic editorial stated that the only way to move this investigation forward is to get Ms. Lerner to talk — via immunity from prosecution. Ms. Lerner needs to talk, all right, but in light of the past week’s news, she cannot possibly be given immunity. The IRS regularly operates with absolute ruthlessness and no mercy in its dealings with the public, and in this case, we’ve seen nothing but complete contempt from the highest-ranking agency officials, all as the administration looks the other way and President Barack Obama himself says there’s “not even a smidgen of corruption” within the IRS.

Remember, this isn’t about partisan sniping. This is about an executive branch agency working to influence the outcome of the 2012 election in favor of the party — and the president — in power.

It’s one thing to offer reduced sentences or penalties for cooperating, but full immunity must be off the table. Ms. Lerner and the IRS are long overdue for a heavy dose of karma.

http://taxprof.typepad.com/taxprof_blog/2014/07/the-irs-1.html

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Comments

"Some Tea Party groups were neutered in the months before the 2012 presidential election." Really? How? By not receiving timely IRS approval of their (c)(4) status? How did that neuter them? Did they set aside reserves--that they otherwise would have used to campaign--to pay possible federal income tax liabilities? Wouldn't that have disqualified them and resulted in revocation? Which ones actually set aside tax reserves? How much?

Posted by: Publius Novus | Jul 15, 2014 6:42:52 AM

PN, they couldn't raise money. Anyway, why the partisan IRS selectively choose tea party organizations and drag them out for months unless its leadership believed that it was crippling them.

Posted by: Woody | Jul 15, 2014 11:37:56 AM

I think we call that begging the question, Woody.

Posted by: Daniel | Jul 15, 2014 12:21:07 PM

Woody, what is the connection between (c)(4) status and the ability to raise money? Donations to (c)(4)s are NOT deductible to the donors. What is the connection?

Posted by: Publius Novus | Jul 16, 2014 8:58:35 AM

Anon, the issue was about getting non-profit status – not charitable status, like the status of the many black churches which openly campaign for Democrats. But, I guess that’s okay with you.

Do you think there is no crime just because you can’t see the effect that IRS lawlessness had – just because you look at it from the narrow standpoint of only getting 501 (c)(4) approval? Well there were effects and there were victims and it did go beyond mere approval.

There are a host of concerns, for which I cannot recall all and am not completely qualified to address them all, but here are a few that I see.

In general, the IRS stifled momentum of the Tea Party and its ability to grow and raise funds. The Tea Party organizations couldn’t get anyone to write them checks because of fears installed into donors by the IRS, and the organizers were tied up with IRS abuse. The IRS started making examples of what can happen to people involved.

Just try getting any entity off the ground when the IRS refuses to cooperate with your application. On top of that, the IRS started audits of many individuals applying and audits on their unrelated businesses, making it more time-consuming and more expensive to proceed.

Also, part of the IRS inquiries prior to approval was for donor lists, which illegally made their way into hands of tea party opponents, who used that information for personal and financial attacks. In addition, the IRS was red-flagging donors for tax audits. Other government agencies, such as the EPA, OSHA, and the ATF, got notice from the IRS and started investigations on businesses of donors. That put some people in difficult situations and muffled their free speech donation rights, because of fear of retaliation.

As you mentioned, the targeted organizations would have to pay taxes without its not-for-profit status, which made pursuing donations impossible, when donors knew that less of their money would go to issues since a portion would be siphoned off by the IRS.

Next, the IRS was trying to assess gift taxes against donors, which it did with great enthusiasm.

The organizations could not move ahead with their business plans, planned marketing, and print materials without the IRS letter.

Without IRS approval, donors had no way to determine which organizations were legitimate and deserved their support or which ones were phony and would not use and report the money properly. In fact, the delay in receiving IRS approval may have initially tainted organizations with an image that something was not right.

More recently, the IRS has attempted to redefine “political activism” for 501 (c)(4) status in an effort to shut down Tea Party organizations. Note that labor unions and the Democratic Party have no such issue with the IRS for their political activities.

I don’t have any more time on this, and someone can probably add to it or do better, but there’s enough there to answer your question.

Posted by: Woody | Jul 16, 2014 11:13:45 AM

Excuse me Publius Novus, that was for you -- not Anon. I get confused as to whom is badgering me at the moment.

Posted by: Woody | Jul 16, 2014 11:27:56 AM

Woody: If any of what you wrote were even half true, I would have some concerns. But everything you wrote is complete speculation.

Posted by: Publius Novus | Jul 17, 2014 11:56:14 AM

PB, If any was even half-true? Well, start having concerns, because the IRS has admitted and investigations have uncovered that the targeting of conservative groups and the unauthorized release of confidential information to outside attack parties did take place. What is on the destroyed hard drives is anyone's guess, but it would be reasonable to assume a coverup of more intimidating actions. As far as additonal audits and govenrment investigations, they simply go far beyond statistical odds.

Posted by: Woody | Jul 18, 2014 8:42:17 AM