TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, April 12, 2017

The IRS Scandal, Day 1434:  How To Prevent The Next IRS Targeting Scandal

IRS Logo 2Tax Revolution Institute, How to Prevent the Next IRS Targeting Scandal:

We now know beyond a doubt that the Internal Revenue Service targeted and denied the nonprofit status of hundreds of organizations — mostly Tea Party and constitutionalist groups, but also those across the spectrum like Coffee Party USA — just in time for the 2012 presidential election. What we don’t know is whether anyone will be punished for this grand-scale corruption. ...

The 695-page release (PDF) of documents on April 4 — acquired thanks to a Freedom of Information Act request from Judicial Watch — is the final nail in the coffin, if there were any doubters still around. The fact that these documents remained under wraps during congressional hearings is itself worthy of condemnation.

Judicial Watch President Tom Fitton says there is no wonder why the IRS was reluctant to release these files: “The new smoking-gun documents contain admissions by the Obama IRS that it inappropriately targeted conservative groups.” Further, even when coming under scrutiny, “the abuse continued — as the Obama IRS tried to force conservative applicants to give up their First Amendment rights in order to finally get their applications granted.” ...

Not only will going after a few visible individuals not root out the bad faith, “American taxpayers are at risk for similar treatment in the future” — as noted by the Cause of Action Institute, another DC-based watchdog. CAI asserts that the targeting of politically relevant nonprofits with Special Case Reports (PDF) was and remains standard procedure. Their case rests on the little-known nonprofit red flags from Part Seven of the Internal Revenue Manual for IRS employees, which include whether the group might “generate significant publicity or controversy.” ... [W]e have to change incentives for the IRS and find solutions that go beyond the normal partisan brinkmanship. ...

What is politically plausible remains to be seen, be that a reworking of IRS procedures by the Congress or a more fundamental tax reform that places revenue collection in the hands of state governments. Perhaps the former can be an intermediate step before the latter.

http://taxprof.typepad.com/taxprof_blog/2017/04/the-irs-scandal-day-1434how-to-prevent-the-next-irs-targeting-scandal.html

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Comments

How about keeping the IRS under strict sequester cuts? Necessity may be the mother of invention in the private sector, but in the public sector it's all about the annual budget increases. Removing that incentive for anything other than the core mission of collecting taxes is the best disincentive for this kind of behavior...

Posted by: MM | Apr 12, 2017 10:38:31 PM