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Wednesday, April 23, 2014

The IRS Scandal, Day 349

Tuesday, April 22, 2014

The IRS Scandal, Day 348

Monday, April 21, 2014

The IRS Scandal, Day 347

Sunday, April 20, 2014

The IRS Scandal, Day 346

IRS Logo 2Washington Post op-ed:  Regulatory Overkill, by George F. WIll:

This case, which comes from Cincinnati, where the regional IRS office was especially active in suppressing the political speech of conservative groups, involves the intersection of two ominous developments. One is the inevitable, and inevitably abrasive, government intrusions into sensitive moral issues that come with government's comprehensive and minute regulation of health care with taxes, mandates and other coercions. The Supreme Court will soon rule on one such controversy, the ACA requirement that employer-provided health care plans must cover the cost of abortifacients. The other development is government's growing attempts to regulate political speech, as illustrated by the Obama administration's unapologetic politicization of the IRS to target conservative groups.

These developments are not coincidental. Government's increasing reach and pretensions necessarily become increasingly indiscriminate.

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April 20, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, April 19, 2014

The IRS Scandal, Day 345

Friday, April 18, 2014

The IRS Scandal, Day 344

IRS Logo 2Above the Law:  Should ‘Campaign For Liberty’ Have Called Itself ‘Campaign For Progress’ Instead?:

Campaign for Liberty, Ron Paul’s 501(c)(4) organization, announced this week that it’s actually pretty sure that its tax recent filings are incomplete, even if true and correct. (Two out of three ain’t bad?) According to C4L, the organization refused to divulge the names of its donors when it filed its IRS 990 forms. The IRS fined Campaign for Liberty just shy of $13,000, plus growing interest for each day the fine goes unpaid. ...

Megan Stiles, the communications director at Campaign for Liberty, told the Washington Examiner in an email on Tuesday:  There is no legitimate reason for the IRS to know who donates to Campaign for Liberty. The IRS technically requires donor information from 501(c)(4) organizations and is forbidden by law from releasing it to the public, yet despite this they have ‘mistakenly’ released the information repeatedly over the years. Often these leaks have been made to political opponents of the conservative groups whose information was leaked. Leaking the donor information is intended to harass and to intimidate those donors from donating to political causes. Campaign for Liberty has refused to provide donor information to the IRS to protect the privacy of our members. Now the IRS has demanded the information and fined Campaign for Liberty for protecting its members’ privacy. ...

[C]an you blame them for being skeptical of how the IRS will treat them and their donors? It’s been a year since the Treasury Inspector General for Tax Administration conceded that the IRS used “inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based on their names or policy positions instead of indications of potential political campaign intervention.” President Obama himself has in the past used donor lists to publicly chastise private citizens who oppose him politically.

The investigation by the House Oversight and Government Reform Committee crawls along with all the deliberate speed of a patient on Seconal. However, Judicial Watch released yesterday a new batch of internal IRS emails showing that former IRS official Lois Lerner communicated with the Department of Justice on strategies for targeting 501(c)(4) groups. Even as Lerner broke the news of the IRS scandal by blaming “low-level” employees in Cincinnati, Lerner was still consulting with the DOJ about how the targeted organizations could be prosecuted. There’s mounting evidence to support conservative concerns about the political nature of the IRS.

In November, the IRS proposed changes to the rules governing 501(c)(4) organizations. The changes would constrict the political activity of groups claiming this tax-exempt status and require them to disclose their donors. The proposal elicited a record-breaking 169,000 public comments. IRS Commissioner John Koskinen told USA Today on Monday that, given the extraordinary number of comments, “In all likelihood we will re-propose a redefined rule and ask for more public comment.” He predicted that the process would not be complete “until the end of the year and beyond.”

Conservatives like Senate Minority Leader Mitch McConnell (R-Ky.) have opposed these changes, unsurprisingly. However, even the ACLU has criticized the proposed rules as unduly burdensome on First Amendment rights. It’s not only conservatives who should be wary about not only what the IRS has done in the past, but also what it aims to do in the future.

Can you blame Campaign for Liberty for not wanting to expose its private-citizen donors to retribution, even if that means disregarding IRS demands? Perhaps we should just ask former Mozilla CEO Brendan Eichwhat the consequences of disclosure might be.

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April 18, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Thursday, April 17, 2014

The IRS Scandal, Day 343

IRS Logo 2U.S. News & World Report: The IRS Scandal's Smoking Gun?:

The so-called “smoking gun” proving the Internal Revenue Service played politics with conservative groups seeking official non-profit, social welfare status over the last several years may finally have been found.

In a rash of documents provided under the Freedom of Information Act to Judicial Watch, a non-partisan public interest law group, is an April 2013 email written by David Fish, acting manager of IRS Exempt Organizations Technical Guidance and Quality Assurance and sent to, among others, former IRS Director of Exempt Organizations Lois Lerner. It was part of a thread discussing a recent U.S. Senate hearing on the potential for the abuse of the 501(c)(4) tax status by organizations intervening inappropriately or improperly in candidate elections.

Responding to a message “What can I say?” from Lerner, Fish responds, “Tell Ruth she needs to get on the stick and that the next election cycle is around the corner. This is obviously a wonderful idea (that’s why we suggested it). I think you told Greg all you can tell him, unless you want to tell him that we’re taking guidance plan suggestions.”

The email is dated April 15, 2013 – well after initial allegations that the IRS had “slow-walked” the applications of conservative groups had been made and, by the agency, denied.

The “Ruth” mentioned in the message refers to Ruth Madrigal, an official at the U.S. Treasury Department. The “Greg” mentioned in Fish’s message is apparently a San Francisco-based attorney named Gregory Colvin, who started this chain with an e-mail to Lerner and Madrigal letting them know he has just testified before the Senate Judiciary Subcommittee on Crime and Terrorism on the issue of whether officers of (c)(4) organizations who made false statements under penalty of perjury on tax returns “could be criminally prosecuted.”

The Obama administration has insisted from the beginning that conservative groups were not singled out and that electoral considerations did not factor into what clearly went on. They prefer to adhere to the fiction that anything untoward that occurred generated spontaneously in branch offices among low level staff and not at the direction of anyone in Washington.

The particular mention by Fish of the idea that “the next election cycle is around the corner” seems to any reasonable person to confirm or at least suggest higher-ups at the IRS including Lerner knew exactly what they were doing, had used their positions for partisan political purposes, and were continuing to do so even though the word about what they were doing had leaked out....

[C]ongressional investigators need to refocus, to cast a wider net and make sure all the documents they asked for were actually turned over. If they weren’t, then it would seem reasonable to conclude a cover-up had in fact occurred and may be a bigger thing than the underlying crime.

Rather than slow down its efforts and wind them up, congressional committees investigating what the IRS actually did and finding what other federal agencies – if any – it worked with to subvert the constitutionally protected rights to freedom of speech and association need to go into high gear. The upcoming summer recess would be the perfect time to focus on it since there will be nothing else going on in town.

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April 17, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (7)

Wednesday, April 16, 2014

The IRS Scandal, Day 342

Tuesday, April 15, 2014

The IRS Scandal, Day 341

Monday, April 14, 2014

The IRS Scandal, Day 340

IRS Logo 2National Review:  Woodward on IRS Scandal: ‘There’s Obviously Something Here’:

The Washington Post’s Bob Woodward knows a thing or two about investigating Washington scandals, and he believes the Internal Revenue Service’s targeting of conservative groups merits a deeper look.

“We should dig in to it — there should be answers,” he said on Fox News Sunday. “For the president to take that position is very, very unusual and say there’s not a ’smidgen of evidence here.’”

Woodward raised questions about the Republican House committees’ ability to properly and effectively carry out such an investigation. He laid out what his approach would be to dealing with stonewalling from Lois Lerner, as well as the administration, including speaking with others close to the situation rather than just the major players. But Woodward also warned of congressional Republicans’ crossing the line in their accusations of Lerner and others involved.

“There’s obviously something here,” he explained. “The question is, does this committee know how to investigate.”

(Click on YouTube button on bottom right to view video directly on YouTube to avoid interruption caused by blog's refresh rate.)

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April 14, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Sunday, April 13, 2014

The IRS Scandal, Day 339

Saturday, April 12, 2014

The IRS Scandal, Day 338

IRS Logo 2Tax Analysts Blog: The Gift That Is Lois Lerner, by Christopher Bergin:

[W]hen you see all of what the Ways and Means Committee compiled about Lerner, it hardly paints a pretty picture of her. To me, it certainly shows that she did many stupid things and that she probably abused her power as a high-ranking IRS official. Did she break the law? I don’t know, but that is why I agree with Ways and Means Republicans that there should be a Justice Department investigation – although I thought one was already going on. ...

The bad behavior going on at the IRS – whether it is politically motivated or not – does not stop with Lerner. It has to go higher than that. How much higher, I do not know, but that’s yet another reason why we need an investigation – a real one.

And that is why I think the Ways and Means Republicans are doing the IRS – and, perhaps, the Obama administration – a huge favor. Making Lerner the scapegoat changes the conversation. It makes it about her. It’s not about her. It’s about the IRS. Something bad happened here. And however bad her behavior, the problem isn’t Lerner. The problem is a culture that allows what she did to continue and that probably allows behavior that’s much, much worse. That is what new IRS Commissioner John Koskinen must deal with.

And here is where I agree to some degree with Ways and Means Democrats. The GOP committee members have become so obsessed with the political dimensions of this scandal that they are forgetting their job -- a job they actually explain at the top of the letter to the DOJ. Their job is not to fix blame; it’s to fix the problem. Their job is not to destroy the IRS; it is to protect the rights of ALL American taxpayers. This scandal isn’t about Lerner; it’s about our tax system. If all of this goes to the White House, so be it. But it’s about getting to the truth, not getting to the president of the United States. You’d think the GOP would have learned that from Monica Lewinsky. Think what you want about that so-called scandal, but I think this so-called scandal poses a far bigger threat to the country.

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April 12, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, April 11, 2014

The IRS Scandal, Day 337

CNN:  Should Lois Lerner Be Held In Contempt?:

CNN Crossfire

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April 11, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, April 10, 2014

The IRS Scandal, Day 336

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April 10, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, April 9, 2014

The IRS Scandal, Day 335

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April 9, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, April 8, 2014

The IRS Scandal, Day 334

IRS Logo 2House Committee on Oversight and Government Reform, Debunking the Myth that the IRS Targeted Progressives: How the IRS and Congressional Democrats Misled America about Disparate Treatment (Apr. 7, 2014) (141 pages):

The Committee’s investigation demonstrates that the IRS engaged in disparate treatment of conservative-oriented tax-exempt applicants. Documents produced to the Committee show that initial applications transferred from Cincinnati to Washington were filed by Tea Party groups. Other documents and testimony show that the initial criteria used to identify and hold Tea Party applications captured conservative organizations. After the criteria were broadened in July 2012 to be cosmetically neutral, material provided to the Committee indicates that the IRS still intended to target only conservative applications.

The IRS’s independent watchdog, the Treasury Inspector General for Tax Administration (TIGTA), confirms that the IRS treated conservative applicants differently from liberal groups. The inspector general, J. Russell George, wrote that while TIGTA found indications that the IRS had improperly identified Tea Party groups, it “did not find evidence that the criteria [Democrats] identified, labeled ‘Progressives,’ were used by the IRS to select potential political cases during the 2010 to 2012 timeframe we audited.” He concluded that TIGTA “found no indication in any of these other materials that ‘Progressives’ was a term used to refer cases for scrutiny for political campaign intervention.”

An analysis performed by the House Committee on Ways and Means buttresses the Committee’s findings of disparate treatment. The Ways and Means Committee’s review of the confidential tax-exempt applications proves that the IRS systematically targeted conservative organizations. Although a small number of progressive and liberal groups were caught up in the application backlog, the Ways and Means Committee’s review shows that the backlog was 83 percent conservative and only 10 percent were liberal-oriented.9 Moreover, the IRS approved 70 percent of the liberal-leaning groups and only 45 percent of the conservative groups. The IRS approved every group with the word “progressive” in its name.

In addition, other publicly available information supports the analysis of the Ways and Means Committee. In September 2013, USA Today published an independent analysis of a list of about 160 applications in the IRS backlog. This analysis showed that 80 percent of the applications in the backlog were filed by conservative groups while less than seven percent were filed by liberal groups. A separate assessment from USA Today in May 2013 showed that for 27 months beginning in February 2010, the IRS did not approve a single tax-exempt application filed by a Tea Party group. During that same period, the IRS approved “perhaps dozens of applications from similar liberal and progressive groups.” ...

For months, the Administration and congressional Democrats have attempted to downplay the IRS’s misconduct. First, the Administration sought to minimize the fallout by preemptively acknowledging the misconduct in response to a planted question at an obscure Friday morning tax-law conference. When that strategy failed, the Administration shifted to blaming “rogue agents” and “line-level” employees for the targeting. When those assertions proved false, congressional Democrats baselessly attacked the character and integrity of the inspector general. Their attempt to allege bipartisan targeting is just another effort to distract from the fact that the Obama IRS systematically targeted and delayed conservative tax-exempt applicants.

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April 8, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Monday, April 7, 2014

The IRS Scandal, Day 333

Pinocchio_3Washington Post Fact Checker:  IRS Chief: No ‘Targeting’ of Tea Party Groups, Just ‘Inappropriate Criteria’:

The inspector general found inappropriate criteria were used to select organizations for further review — he did not refer to it as targeting.

Yes, inappropriate criteria were used. I don’t think I used the word target, but I do acknowledge that applications were delayed unnecessarily and for too long.”

I have never said there was targeting.

 – IRS Commissioner John Koskinen, congressional testimony before the House Oversight and Government Reform Committee, March 26, 2014

What’s in a phrase?

House Republicans who have investigated the IRS’s handling of applications of conservative groups’ seeking tax-exempt status have referred to the practice as “targeting.” So have news organizations, including The Washington Post.

This effort at spin control took an odd turn recently when, during a congressional hearing, IRS Commissioner John Koskinen denied that the Treasury inspector general had used the term “targeting.” At another point in the hearing, Koskinen said that he had “never” used the phrase either.

What did the IG say and when did he say it? ...

[W]hat happened when [Inspector General] George actually spoke before Congress about his report?  Here are two examples from his testimony on May 22, 2013:

The three allegations considered during our review were proven true. The IRS targeted specific groups applying for tax-exempt status. It delayed the processing of these groups’ applications, and requested unnecessary information, as well as subjected these groups to special scrutiny.

The inappropriate criteria discussed in this audit were the IRS’s targeting for review Tea Party and other organizations based on their names or policy positions, a practice started in 2012, and which was not fully corrected until May 2012. Actually the practice was started in 2010 and not fully corrected until May of 2012.

Note that George said the three allegations were “proven true.” The allegations all concerned “targeting.” And then he actually used the word. He even said that the “inappropriate criteria” were defined as the “IRS’s targeting.”

Moreover, Koskinen himself uttered “targeting” before he arrived at the IRS, during his confirmation hearings in December, even though he told Congress in March that he had never used the phrase. ...

We understand the public relations concern about acknowledging that the IRS engaged in targeting of conservative groups. But the cat’s out of the bag, given an official IRS report has used the phrase and both George and Koskinen have used it in public testimony.

The IG’s report was carefully written, but at this point, it is silly and counterproductive for Koskinen to fall back on bureaucratese — or even deny that the phrase “targeting” had been used. While perhaps technically correct in terms of the report, this is a slender reed to hide behind. After all, George publicly said that all three allegations of “targeting” were proven, and that using “inappropriate criteria” was the equivalent of “targeting.” That demonstrates that the term “inappropriate criteria” is simply a euphemism. Accept that means “targeting,” and move on.

Three Pinocchios.  Significant factual error and/or obvious contradictions.

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April 7, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Sunday, April 6, 2014

The IRS Scandal, Day 332

Saturday, April 5, 2014

The IRS Scandal, Day 331

IRS Logo 2PJ Media:  The Fascist Thugs Win One: Firefox CEO Steps Down (Update: IRS Role Exposed):

Brendan Eich committed a thoughtcrime. He supports the traditional definition of marriage. For that, he has now joined the ranks of the unemployed. ...

Update: Check this out. The IRS abuse scandal started the process that got Eich ousted.

Why, then, the ruckus? Amazingly enough, it is entirely due to the fact that Eich made a $1,000 donation to the campaign urging a ‘yes’ vote on California’s Proposition 8. When this fact first came to light in 2012, after the Internal Revenue Service leaked a copy of the National Organization for Marriage’s 2008 tax return to a gay-advocacy group, Eich, who was then CTO of Mozilla, published a post on his personal blog stating that his donation was not motivated by any sort of animosity towards gays or lesbians, and challenging those who did not believe this to cite any “incident where I displayed hatred, or ever treated someone less than respectfully because of group affinity or individual identity.”

To whom did the IRS leak NOM’s files? The Human Rights Campaign.

The HRC evidently engineered Eich’s ouster, in the name of equality and tolerance.

The IRS actions create a serious chilling effect. Your donations to any group can be leaked by a hostile operative within the government, to your enemies, for use against you — up to and now including costing you your job.

Reason:  No, the IRS Didn’t Leak Mozilla Ex-CEO’s Donation in Opposition to Gay Marriage:

Dear conservatives: Please don't make me have to write in defense of the Internal Revenue Service (IRS). I certainly don’t enjoy it.

As Nick Gillespie has noted, Brendan Eich stepped down yesterday as chief executive officer of Mozilla in the wake of the scandal that he donated $1,000 in support of California’s Proposition 8, the ballot initiative that forbid state recognition of same-sex marriage.

The outrage has now completely flipped to the opposite direction, with conservatives accusing those who railed against Mozilla of intolerance. Twitter has remained submerged beneath a sea of outrage and generalizations for the duration.

Two days ago, an anonymous tech industry worker wrote a piece about the outrage against Eich at First Things, a journal produced by nonprofit Institute on Religion and Public Life. The anonymous worker stated that Eich's donation came to light in 2012, "after the Internal Revenue Service leaked a copy of the National Organization for Marriage's 2008 tax return to a gay-advocacy group." This information is now being attached and included in coverage on other conservative blogs as well.

But it's not accurate. The names of donors in the Proposition 8 battle, for and against, have always been public information, even before the election. The Los Angeles Times has a searchable database here. Eich's name is on it (as is mine—I gave $100 in opposition and ultimately regretted it after seeing the horrible, useless ads they put together to fight Prop. 8). The information came from the California secretary of state's office, not some IRS leak. This database is not dated, but they were available and were online at some media outlets prior to the 2008 vote.

The possible IRS leak is a real thing, though. First Things didn't invent it, just misunderstood it. The IRS is accused of leaking the National Organization for Marriage's (NOM) tax records from 2008 to the Human Rights Campaign. The IRS has claimed the release of the records was "inadvertent." The records included names of donors to NOM, but while NOM was responsible for organizing and pushing forward Proposition 8, it's not the same list. Eich donated to Prop. 8, not to NOM. Eich's name and donation to Proposition 8 was always a public record and searchable even before the election. People were facing public criticism for their donations at their workplaces even at the time of the vote. Eich is not the first guy to deal with this sort of backlash, and it prompted debate over whether names of donors should be public.

We can blame a multitude of sins on the IRS and President Barack Obama, but the outrage over Eich is not one of them.

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April 5, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Friday, April 4, 2014

The IRS Scandal, Day 330

Thursday, April 3, 2014

The IRS Scandal, Day 329

IRS Logo 2IR-2014-42, Prepared Remarks of Commissioner of Internal Revenue Service John Koskinen Before the National Press Club:

In moving the IRS forward, one of the most important things we have to do is restore public trust in the agency, which was shaken by the management problems that came to light last year with regard to the determination process used for applicants to become tax exempt social welfare organizations under section 501(c)(4) of the IRS code. Organizations that have 501(c)(4) status can be everything from garden clubs to homeowners associations, but the focus for the last year has been on advocacy groups that spend part of their time and money on political campaigns.

As a result of the inappropriate use of an organization’s name alone as the criterion for setting its application aside for special treatment, doubt has been cast by some on the independence of the IRS. This is an important issue that deserves our attention.  But it is also important to put this issue into the proper perspective.  The IRS has about 800 employees in its Exempt Organizations Division, and only a small subset of those folks work on processing applications for tax-exempt status for social welfare organizations. Meanwhile, there about 89,000 other IRS employees in offices all across the country who are also doing critical work for our tax system and for the nation in other areas.

Nonetheless, taxpayers need to be confident that the IRS will treat them fairly. It doesn’t make any difference who they are, what organizations they belong to, or whom they voted for in the last election. None of that matters to us at the IRS. We will do about one million audits of individual taxpayers this year. Some who get audited may be Democrats, some may be Republicans, and others may be something else altogether. But they will all have one thing in common: They’re being contacted by us because there was something on their tax returns that needed follow up. Perhaps we just need a clarification. Maybe there was a mathematical error. Or there could be something seriously wrong with the return. But the return alone is the reason for our inquiry. And anyone else with the same issue would receive the same treatment from the IRS.

To make sure that this problem does not recur, we’ve done a number of things. We have accepted all nine of the recommendations from the Inspector General for Tax Administration. It was his report last May that found applications for 501(c)(4) status were being screened using inappropriate criteria in the determinations process. 

Since then, for the last several months the IRS has been cooperating with the investigations into this matter that were launched last summer. There are six ongoing investigations, four conducted by Congressional committees, one by the Department of Justice and one by the IG.

We were asked by members of Congress to quantify the work we’ve done and how much it has cost. The answer is that more than 250 IRS employees have spent over 100,000 hours working directly on complying with the investigations. This work has cost more than $14 million, which includes adding capacity for our computer systems to make sure we are protecting taxpayer information while processing and producing these materials.

In letters to Congressional Committees two weeks ago and in my testimony before the House Oversight and Government Reform Committee last week, I was pleased to report that we now have provided all the documents we have identified as being related to the determinations process – which was the focus of the IG’s report last May. We have provided the tax writing committees, our primary oversight committees, with almost 700,000 pages of documents.  We are still redacting taxpayer information from the last of those documents before they can be shared with the Committees that do not have authority to see taxpayer information.

As a result, my hope is that at least some of the six pending investigations will be concluded and reports issued in the near future. I have made it clear that we will respond appropriately to the facts and recommendations of those reports and move the agency forward.

Our production of materials has proceeded according to priorities set with all of the investigating committees and, as we have now completed our production of documents related to the determinations process, we are prepared to work with the committees on any new avenues they may want to pursue.

You may have noticed that, during my three-hour hearing last week before the House Oversight and Government Reform Committee, some members of the Committee expressed unhappiness with the rate at which we are producing redacted information for them. As I tried to make clear, we never indicated that we would not respond to the very broad subpoena for documents we received in mid-February. Indeed, we have produced documents responsive to each of the subpoena’s categories. In the private sector, a court would require these requests to be reduced to those relevant to the inquiry. Unfortunately, the subpoena contains no such limitations, so the volume of materials requested means we could be at this for a long time.

Another recommendation by the IG was that the Treasury Department and the IRS should provide clearer guidance on how to assess the permissibility of 501(c)(4) social welfare organizations’ activities. So last November, Treasury and the IRS issued proposed regulations that are designed to clarify the extent to which a 501(c)(4) organization can engage in political activity without endangering its tax-exempt status.

While I was not involved in the issuance of this draft proposal, because it happened before I was confirmed as Commissioner, I believe it is extremely important to make this area of regulation as clear as possible. Not only does that help the IRS properly enforce the law, but clearer regulations will also give a better roadmap to applicants, and will help those that already have 501(c)(4) status properly administer their organizations without unnecessary fears of losing their tax-exempt status.

During the comment period, which ended in February, we received more than 150,000 comments. That’s a record for an IRS rulemaking comment period. In fact, if you take all the comments on all Treasury and IRS draft proposals over the last seven years and double that number, you come close to the number of comments we are now beginning to review and analyze. It’s going to take us a while to sort through all those comments, hold a public hearing, possibly repropose a draft regulation and get more public comments. This means that it is unlikely we will be able to complete this process before the end of the year.

Before leaving this topic, I want to note one other thing. Last month, former IRS Commissioner Randolph Thrower passed away at the age of 100. Commissioner Thrower led the IRS from 1969 to 1971, during the early years of the Nixon Administration, which turned out to be a challenging time for the agency. Commissioner Thrower held firm against attempts being made at that time to politicize the agency. The White House eventually fired him for his principled stance.

I’m sure if Commissioner Thrower were here today, he would say he was only doing his job. But he was doing much more. His refusal to let politics compromise the IRS is an important reminder to all IRS Commissioners now and in the future of what our mission is. I intend to follow his example. I want to reassure everyone listening to me today that the IRS is an agency of career civil servants who are dedicated to serving the American taxpayer in a fair and impartial manner. That’s how it’s always been, and that’s how it will stay on my watch.

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April 3, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Wednesday, April 2, 2014

The IRS Scandal, Day 328

IRS Logo 2 The Heritage Foundation:  IRS Targeting: Is the Obama Administration Conducting a Serious Investigation?, by Hans A. von Spakovsky:

A Jan. 8 letter from the Committee to Attorney General Holder outlined the Justice Department’s refusal to provide any information or updates on the status of the Department’s investigation. The letter notes that the FBI offered to meet with Rep. Jordan to do exactly that but later “rescinded” the offer “after [Justice] Department officials apparently interfered.”

It is certainly true that the FBI cannot disclose sensitive information during an ongoing criminal investigation, but an active investigation does not prevent the FBI and the Justice Department from giving Congress basic information regarding the status of an investigation that does not compromise their work.  ...

Yet lawyers representing dozens of the targeted conservative groups have recently testified before this Committee and have said that their clients have not been contacted or interviewed by any FBI agents. 

I find that simply incredible – that nine months after the Attorney General announced he was opening an investigation, neither the FBI nor the Justice Department has conducted basic interviews with the victims to gather information about their dealings with the IRS officials and employees who may have been involved in wrongdoing.

In addition to the unjustified refusal of the Department to provide this Committee with any information about its investigation, there is the troubling selection of a Civil Rights Division lawyer, Barbara Bosserman, as the lead lawyer in the investigation. This scandal involves the possibility of public corruption – misbehavior by federal employees in the IRS.  It is the Public Integrity Section of the Criminal Division – not the Civil Rights Division – that has long been responsible for investigating and prosecuting this type of public corruption. 

Bosserman works in the most politicized division within the entire Justice Department. ... The Justice Department’s pick of Barbara Bosserman to lead or be involved in making decisions about this investigation raises the appearance of a conflict of interest because of her extensive political donations to President Barack Obama, who recently said there was “not even a smidge of corruption” in the IRS scandal – even though the  investigation is supposedly not complete.

When this first became public, Justice Department spokeswoman Dena Iverson claimed that Bosserman could not be removed from the investigation because “[i]t is contrary to department policy and a prohibited personnel practice under federal law to consider the political affiliation of career employees or other non-merit factors in making personnel decisions." The problem with this claim is that it is not true.

Taking a lawyer off a particular case because of a possible conflict of interest or the appearance of such a conflict is not a “prohibited personnel practice” like firing, terminating, or changing the pay of someone for political reasons. Indeed, Justice Department regulations clearly state that DOJ lawyers must avoid even “an appearance of a conflict of interest likely to affect the public perception of the integrity” of an investigation or prosecution.

No one questions the right of career employees to make political donations. This is allowed under the Hatch Act and applicable DOJ regulations, as explained by the Justice Department’s Ethics Office. But Bosserman’s considerable campaign contributions certainly raises the appearance of a possible conflict of interest in terms of the public’s perception of her ability to make unbiased, objective decisions in an investigation that could prove very embarrassing to the president she supports – a president who has already signaled through his public statements what he thinks the outcome of the investigation ought to be. ...

Given the allegations in the IRS case, especially the suspicion that conservative organizations were specifically targeted by IRS officials to help dampen public opposition to President Obama’s reelection, the Justice Department should make every effort to conduct a thorough investigation and avoid any questions about the objectivity of the attorneys and investigators involved in the investigation. ...

The involvement of the Civil Rights Division and the appearance of possible bias by one of the supervising, if not lead, lawyers in this investigation is a very serious issue. When combined with the refusal of the Justice Department and the FBI to provide even basic information about the status of the investigation, as well as the seemingly unjustifiable delays in talking to key witnesses in the conservative organizations targeted by the IRS, it raises substantial questions about whether or not a serious, objective, unbiased investigation is being conducted.

This Committee should continue to attempt to get more information about the integrity of the government’s investigation and should pursue its oversight function vigorously.  Otherwise, what happened at the IRS will happen again, and federal employees will believe that they can engage in wrongdoing by targeting the political opposition of the administration without fear of any consequences.

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April 2, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, April 1, 2014

The IRS Scandal, Day 327

IRS Logo 2In a stunning bipartisan agreement, President Barack Obama, Attorney General Eric Holder, IRS Commissioner John Koskinen, House Committee on Oversight and Government Reform Chair Darrell Issa and Ranking Member Elijah Cummings committed to aggressively pursue investigations into the IRS's targeting of conservative groups in advance of the 2012 presidential election.

President Obama

I have now had the opportunity to review the Treasury Department watchdog’s report on its investigation of IRS personnel who improperly targeted conservative groups applying for tax-exempt status.  And the report’s findings are intolerable and inexcusable.  The federal government must conduct itself in a way that’s worthy of the public’s trust, and that’s especially true for the IRS.  The IRS must apply the law in a fair and impartial way, and its employees must act with utmost integrity.  This report shows that some of its employees failed that test. 

I’ve directed Secretary Lew to hold those responsible for these failures accountable, and to make sure that each of the Inspector General’s recommendations are implemented quickly, so that such conduct never happens again.  But regardless of how this conduct was allowed to take place, the bottom line is, it was wrong.  Public service is a solemn privilege.  I expect everyone who serves in the federal government to hold themselves to the highest ethical and moral standards.  So do the American people.  And as President, I intend to make sure our public servants live up to those standards every day.

Attorney General HolderI understand why the American public might question the impartiality of the DOJ's investigation headed by Barbara Bosserman in light of her political contributions to both of President Obama's campaigns.  I have thus rescinded her appointment and appointed one of the few DOJ attorneys who did not donate to President Obama's campaigns to lead the investigation.

IRS Commissioner KoskinenInspired by the example of my predecessor Randolph Thrower who died on March 8, I commit to complying fully and completely with the investigation by the House Committee on Oversight and Government Reform.  As the first step, the IRS will not take "years" to supply Lois Lerner's emails to the committee but instead will turn them over by April 15.

Chairman IssaI deeply regret cutting off the microphone of my dear friend Elijah Cummings at our last hearing and I promise to include him as a full and equal partner in all future committee actions in this matter.

Ranking Member Cummings:   This is one of the most alarming abuses of government power that I have ever seen.  I’m very concerned about it, we gotta get to the bottom of it, and by the way … we gotta do it in a bipartisan way.

For details of the agreement, see here.

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April 1, 2014 in IRS Scandal, Tax | Permalink | Comments (2)

Monday, March 31, 2014

The IRS Scandal, Day 326

IRS Logo 2Wall Street Daily:  Renegade Government Agency Silences Political Opponents, by Floyd Brown (President, Western Center for Journalism):

Congressman Darrell Issa, the Chairman of the House Oversight & Government Reform Committee, is hopping mad.

After months of waiting, the IRS still hasn’t provided his committee with the emails and documents that are necessary for Congress’ ongoing investigation.

Instead, the man Obama hired to clean up the IRS, John Koskinen, continues to stonewall the Committee. He answered questions during testimony and even had the chutzpah to say that providing the IRS documents and emails could take years. Several members were visibly angry.

The flash point was the issue of accessing Lois Lerner’s email. ... [T]he standoff continues. Lerner won’t testify, and the IRS won’t give Congress Lerner’s emails, which would reveal what she was doing and what she was telling the frontline IRS workers. It’s a shameful debacle.

Even more disheartening is that the man tasked with cleaning up the IRS has now turned into a cover-up artist. We expect the IRS to treat everyone the same, regardless of political views. The notion that certain people, like Catherine Engelbrecht, were targeted because of their political views is a frightening prospect.

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March 31, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Sunday, March 30, 2014

The IRS Scandal, Day 325

IRS Logo 2Washington Examiner editorial:  Lois Lerner Could Go to Jail in Contempt Clash:

This may come as a shock to Lois Lerner, but the House of Representatives has the authority to jail her unless she changes her mind about refusing to answer questions about her role in the IRS scandal. Essentially, what is required for that to happen is for a House majority to vote for a motion holding her in contempt and House Speaker John Boehner to then direct the House sergeant at arms to arrest and confine her. Under the Constitution, the House can do that under its “inherent contempt” authority, which was initially exercised in 1795 during the First Congress and on multiple occasions thereafter. Lerner could be held until January 2015 when a new Congress is seated, which could issue another subpoena and throw her in the clink again if she still balks at testifying. 

According to a 2012 Congressional Research Service report, inherent contempt has the unique advantage that it doesn’t require “the cooperation or assistance of either the executive or judicial branches. The House or Senate can, on its own, conduct summary proceedings and cite the offender for contempt.” The prospect of an eight or nine month stretch in the congressional slammer might have a sobering effect on Lerner. On the other hand, neither the House nor the Senate has used this authority since 1935, according to the CRS report, because the process can be “unseemly” and time-consuming.

Plus, Lerner may be on solid ground in thinking Boehner and other House Republicans don't have the political spine to jail her. But just as the South's “massive resistance” in the 1950s to racial integration was doomed to fail because it could not be sustained over time, the Obama administration's comprehensive refusal since November 2010 to cooperate with legitimate congressional oversight by House committees may be sowing seeds of frustration that eventually undercut Lerner's calculation of how long she can keep silent. Chairman Darrell Issa of the House Committee on Oversight and Government Reform, and Rep. Jim Jordan, who heads that panel's oversight subcommittee, are patient individuals but perhaps not that patient.

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March 30, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (9)

Saturday, March 29, 2014

The IRS Scandal, Day 324

Friday, March 28, 2014

The IRS Scandal, Day 323

Thursday, March 27, 2014

The IRS Scandal, Day 322

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March 27, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Wednesday, March 26, 2014

The IRS Scandal, Day 321

Tuesday, March 25, 2014

The IRS Scandal, Day 320

Monday, March 24, 2014

The IRS Scandal, Day 319

Sunday, March 23, 2014

The IRS Scandal, Day 318

Saturday, March 22, 2014

The IRS Scandal, Day 317

IRS Logo 2Legal Times:  House Republicans Press A.G. Holder About IRS Official:

Republican lawmakers on the House Oversight and Government Reform Committee are pressing Attorney General Eric Holder Jr. for details about whether former IRS official Lois Lerner waived her right against self-incrimination when she spoke to investigators.

Rep. Darrell Issa, R-Calif., the committee chairman, and Rep. Jim Jordan, R-Ohio, sent a letter to Holder on Thursday asking for information about Lerner, the former Internal Revenue Service director of exempt organizations who has refused to testify on Capitol Hill.

Issa is considering contempt proceedings against Lerner as part of the committee's investigation into accusations that the IRS unfairly targeted certain political groups that applied for tax-exempt status. The Justice Department is also investigating the accusations.

Citing a March 6 article in The Wall Street Journal, Issa said Lerner "gave a lengthy interview" with Justice Department lawyers without a grant of immunity. She has twice refused to testify before Congress under the advice of her attorney, William Taylor III of Zuckerman Spaeder.

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March 22, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, March 21, 2014

The IRS Scandal, Day 316

Thursday, March 20, 2014

The IRS Scandal, Day 315

Wednesday, March 19, 2014

The IRS Scandal, Day 314

Tuesday, March 18, 2014

The IRS Scandal, Day 313

Monday, March 17, 2014

The IRS Scandal, Day 312

IRS Logo 2Lily Kahng (Seattle), The IRS Tea Party Controversy and Administrative Discretion, 99 Cornell L. Rev. Online 41 (2013):

The IRS Tea Party controversy erupted when the Treasury Inspector General issued a report finding that IRS employees in the Cincinnati office had targeted certain organizations’ applications for tax exempt status for heightened scrutiny, in particular singling out groups with “Tea Party” or “Patriot” in their names. A media firestorm ensued, with fevered speculation about a hidden political agenda extending all the way to the White House. A complete picture of the controversy has yet to emerge, but as of the writing of this Essay, it appears that the worst suspicions about political bias are unfounded. Nonetheless, the IRS has suffered reputational damage that undermines its legitimacy and impairs its ability to perform its central function.

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March 17, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Sunday, March 16, 2014

The IRS Scandal, Day 311

IRS Logo 2Tax Analysts Blog:  It’s Not Just About Lois Lerner, by Christopher Bergin:

I have written a lot here about the IRS and the issues surrounding the way it treated certain groups applying for tax-exempt status as social welfare organizations. It’s certainly a hot issue – it even made its way into The Economist this week. And wherever you stand on Lois Lerner, I think we can all agree that she is a classic lightning rod. The whole debate about what happened is charged with political intrigue, abuse of power, and Washington melodrama. It’s juicy stuff. I’ve enjoyed the discussion that’s been generated here.

But we need to remind ourselves that there is a lot more potential abuse going on at the IRS than what’s been associated with Lois Lerner. Here are a few examples. I talk to many practitioners who (a) don’t want to be identified, probably for fear of retaliation, and (b) question the independence of the IRS Appeals Office. That is a big problem.

In 2012 a high-ranking IRS executive said in a speech that she believes the government has a higher duty than that of a private litigant. “The government,” the executive said, “represented by the tax administrator, should not pursue a particular outcome and then look for interpretations in the law that support it. The tax administrator should do nothing more or less than find the law and follow it, regardless of outcome. The separation of powers, a bedrock principle of our Constitution, demands it.”

I have a few questions. How many private tax litigators believe that’s actually how the IRS operates? If this noble statement is taken seriously by others in the IRS, why did Tax Analysts have to go to court to get training materials? And why is the IRS being questioned so strongly by Congress on its belief – or, more accurately, the lack thereof -- in the bedrock principle of the separation of powers?

Taxpayer service at the IRS has become a non-priority, if it’s even considered anymore. National Taxpayer Advocate Nina Olson, who is called the taxpayers’ voice at the IRS, has said that the agency is becoming dehumanized, caring more about numbers than taxpayers. In her annual report to Congress in January, she urged the IRS to implement a comprehensive, principle-based taxpayer bill of rights. ...

I’m sorry to say that there is more to worry about regarding what’s going on at the IRS – one of the most powerful agencies and one that affects all of us – than Lois Lerner. ...

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March 16, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, March 15, 2014

The IRS Scandal, Day 310

Friday, March 14, 2014

The IRS Scandal, Day 309

IRS Logo 2Leslie Book (Villanova), Congressional Testimony Highlights IRS Challenges:

One note on the [IRS] scandal. It has been covered (some might say smothered) elsewhere. We have decided to avoid most coverage of the issue, in part because others are hitting it hard and it does not directly impact many aspects of tax procedure. I highlight it here because it is the major issue of the day when it comes to how Congress and the public view the IRS, and as I discuss later, it does also dovetail with some earlier posts we have on IRS rulemaking. As the scandal plays out, it will continue to have a major impact on tax administration.

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March 14, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, March 13, 2014

The IRS Scandal, Day 308

IRS Logo 2Wall Street Journal:  Lois Lerner's IRS 'Immunity Deal':

Rep. Jim Jordan, chairman of a House Oversight subcommittee that has been investigating the Internal Revenue Service's targeting of conservative groups, says that "we need a special prosecutor." And he has a candidate in mind. ...

Mr. Jordan says that Ms. Lerner should tell the American people what she knows about IRS harassment of the President's philosophical opponents because, thanks to explicit signals from the administration, she must already know she is "not going to jail."

The Ohio Republican adds that Ms. Lerner can take further comfort from the fact that Justice assigned the case to government attorney Barbara Bosserman, who has donated more than $5,000 to Barack Obama's campaigns. ... Mr. Jordan has asked Department of Justice Inspector General Michael Horowitz to determine how this case landed with Ms. Bosserman, a civil-rights attorney, instead of a prosecutor in the department's public integrity section.

Mr. Jordan says he'd like to get a transcript of Justice's Lerner interview but doubts the department will turn it over since the executive branch still hasn't complied with a Congressional subpoena to turn over all of Ms. Lerner's emails.

While Mr. Jordan is not endorsing a revival of the flawed and expired independent counsel statute, he says "we need a special prosecutor." And he believes that Mr. Horowitz, an Obama appointee, could conduct a serious inquiry. "I would trust Horowitz," he adds.

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March 13, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Wednesday, March 12, 2014

The IRS Scandal, Day 307

IRS Logo 2Providence Journal:  Can Congress Compel IRS Chief to Testify?, by Robert Romano (Citizens for Limited Government):

A lot has happened since former Internal Revenue Service Exempt Organizations head Lois Lerner refused to testify in May 2013 about the agency’s targeting of the Tea Party and other 501(c)4 organizations, asserting her Fifth Amendment right against self-incrimination.

For starters, it turns out the scandal goes much higher than was originally stated.

Holly Paz, managing director at the D.C.-based IRS technical office, has testified that, in February 2010, “a case was identified where there was potential for political campaign activity, and that was when they reached out to Washington and the case was transferred to Washington.”

Paz said she then forwarded it to agency tax specialist and lawyer Carter Hull, who developed many of the invasive follow-up questions that attempted to probe just how political groups intended to be.

Michael Seto, the head of Hull’s unit, said it was Lerner who ordered that the Tea Party applications be subjected to special scrutiny.

In addition, Hull said that when he met with Lerner’s senior adviser, he was told that his recommendations on the Tea Party applications would be first reviewed by the IRS general counsel William Wilkins, only one of two political appointments in the agency besides the commissioner.

Hull’s supervisor Ronald Shoemaker told investigators that the counsel’s office wanted information about the applicants’ political activities leading up to the 2010 election.

So, what began as a scandal with supposedly “low-level” employees in Cincinnati actually goes all the way to Washington, with the then-head of Exempt Organizations and the agency’s general counsel not only aware of the targeting but coordinating its decision-making process.

And yet, the targeting might not have been criminal after all, or so says the Department of Justice, which according to The Wall Street Journal is not planning on filing charges.

Giving the benefit of the doubt — that there is nothing in the U.S. Code that prohibits the sort of targeting that took place, even though one of the articles of impeachment against Richard Nixon was “to cause, in violation of the constitutional rights of citizens, income tax audits or other income tax investigation to be initiated or conducted in a discriminatory manner” — then why did Lois Lerner even bother pleading the Fifth back in May and again this week?

If there was no criminal activity, in principle, then Lerner cannot incriminate herself. Lerner said it herself before the House Oversight Committee: “I have not broken any laws.” ...

Lerner is running out of excuses. So maybe she just needs to come clean, fess up and be done with it. Or be found in contempt of Congress and face even more consequences.

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March 12, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Tuesday, March 11, 2014

House Releases Report on Lois Lerner's Role in the IRS Scandal

Lerner-ReportThe House Committee on Oversight and Government Reform this morning released a 141-page staff report, Lois Lerner's Involement in the IRS Targeting of Tax-Exempt Organizations:

  • Tea Party “itching for a Constitutional challenge:” Lerner and her colleagues, after being under public pressure from President Obama and other Democrats, engaged in an e-mail exchange about how they could showcase their scrutiny of a Tea Party applicant for public disclosure, despite rules protecting the secrecy of unapproved applications.  The conversation turned to the possibility of a court case – if a Tea Party applicant would challenge the IRS ruling.  On this, Ms. Lerner opined, Tea Party groups would litigate because they are “itching for a Constitutional challenge.” – p. 41
  • Lerner discusses political scrutiny that isn’t “per se political:” In one e-mail exchange that began with a discussion of an article noting, “organizations woven by the fabulously rich and hugely influential Koch brothers,” Lerner told colleagues, “we do need a c4 project next year.”  While she initially says, “my object is not to look for political activity,” later in the exchange she acknowledges that it will examine political activity. “We need to be cautious so it isn’t a per se political project.  More a c4 project that will look at levels of lobbying and pol. Activity along with exempt activity.” – p. 17
  • Lerner broke IRS rules by mishandling taxpayer information:  While Lerner told Congress under oath, “I have not violated any IRS rules or regulations,” e-mails show Lerner handled protected 6103 taxpayer information in her nonofficial e-mail account. In a November 2013 letter from Daniel Werfel, Werfel notes, “We do not permit IRS officials to send taxpayer information to their personal email addresses. An IRS employee should not send taxpayer information to his or her personal email address in any form, including redacted.” – p. 33
  • Lerner planned to retire in October all along: While House Democrats have pushed that Lerner was forced out by the IRS as a result of the TIGTA report; new e-mails indicate that Lerner had planned an October retirement long before TIGTA released its report.  Her paid leave amounted to a paid vacation preceding her retirement – it does not appear that the IRS penalized her in any way for her conduct. – p.  40-41
  • Despite knowing about improper scrutiny, Lerner had IRS blame victims: An IRS document bearing Lerner’s signature shows that in March 2012, despite knowing about improper scrutiny at that time, Lerner reviewed and signed off on a response to Congress that blamed applicants for heightened scrutiny.  “[T]he IRS contacts the organization and solicits additional information when the organization does not provide sufficient information in response to the questions on the Form 1024 or if issues are raised by the application …. The revenue agent uses sound reasoning based on tax law training and his or her experience to review the application and identify the additional information needed to make a proper determination of the organization’s exempt status.” – p. 36
  • Concern Citizens United hurting Democrats:  Lerner believed the Executive Branch needed to take steps to undermine the Supreme Court’s Citizens United decision.  A senior advisor to Lerner e-mailed her an article about allegations that unknown conservative donors were influencing U.S. Senate races.  The article explained how outside money was making it increasingly difficult for Democrats to remain in the majority in the Senate.  Lerner replied:  “Perhaps the FEC will save the day.” – p. 21
  • Citizens United created pressure for IRS to “fix the problem”:  According to Lerner: “The Supreme Court dealt a huge blow, overturning a 100-year old precedent that basically corporations couldn’t give directly to political campaigns.  And everyone is up in arms because they don’t like it.  The Federal Election Commission can’t do anything about it. They want the IRS to fix the problem.” – p. 20
  • “Multi-Tier Review”:  Lerner personally directed that Tea Party cases go through a “multi-tier review.” An IRS employee testified that Lerner “sent [him an] e-mail saying that when these cases need to go through multi-tier review and they will eventually have to go to [Judy Kindell, Lerner’s senior technical advisor] and the Chief Counsel’s office.”  A D.C. IRS employee said this level of scrutiny had no precedent. – p. 24-25
  • Head of the IRS Cincinnati office’s testimony refutes Lois Lerner and President Obama’s O’Reilly interview assertion that this was all about a “local office”: “[Y]es, there were mistakes made by folks in Cincinnati as well [as] D.C. but the D.C. office is the one who delayed the processing of the cases.” – p. 44

Press and blogosphere coverage:

March 11, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (7)

The IRS Scandal, Day 306

SilenceSan Francisco Chronicle:  The Silence of the Tax Lamb, by Debra Saunders:

Former IRS official Lois Lerner invoked her Fifth Amendment right on Wednesday not to incriminate herself when she testified before the House Oversight and Government Reform Committee hearing on the IRS targeting of Tea Party groups.

Oddly, the news media and Democratic leaders don't think it's a big deal when a federal official - Lerner was the head of the IRS tax-exempt unit when she first invoked the Fifth last May - won't answer questions about her actions as a federal official. ...

Just what was Lerner doing on the taxpayer dime that she doesn't want to share?

Lerner's silence is especially unsettling given that her attorney, William Taylor III, told reporters that Lerner had given a full interview to the Department of Justice with no grant of immunity. Lerner's lawyers, he said, have confidence that prosecutors, unlike Issa, are open-minded. ...

"It does strike me as a little odd," Rutgers law Professor George Thomas III told the Wall Street Journal. "One explanation is the one given by her lawyer. The other, darker explanation is that she and her lawyer think that DOJ is not interested in a serious investigation of the IRS treatment of these tax-exempt groups."

Could it be that Lerner's lawyers do not fear the often-terrifying Justice Department precisely because President Obama already signaled there is no cause for concern because the IRS story is a "phony scandal"?

Similarly, the president signaled his disdain for conservative nonprofits during the 2010 and 2012 election seasons. Lo and behold, the IRS started to put conservative tax-exempt organizations on the slow track and under a microscope.

Last year, Lerner admitted that after the IRS saw an uptick in applications for social-welfare organizations in 2010, staff began screening for groups that used words like "Tea Party" or "Patriots." She even apologized. "That was wrong, that was absolutely incorrect, insensitive and inappropriate - that's not how we go about selecting cases for further review," Lerner said.

She also claimed that IRS staffers did not target Tea Party patriot types "because of any political bias. They did it because they were working together. This was a streamlined way for them to refer to the cases."

That is, it was convenient.

I do not believe that claim. I don't know many liberals who actually believe it either. I do believe that if the Bush administration IRS targeted social-welfare groups that used terms like "antiwar" and "torture," the left would want to investigate. They'd want to know if the IRS policy came from the White House. And they wouldn't give a pass to officials who took the Fifth.

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March 11, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Monday, March 10, 2014

The IRS Scandal, Day 305

Sunday, March 9, 2014

The IRS Scandal, Day 304

IRS Logo 2Washington Post op-ed:  The IRS’s Behavior Taxes Credulity, by George F. Will:

What’s been said of confession — that it is good for one’s soul but bad for one’s reputation — can also be true of testifying to Congress, so Lois Lerner has chosen to stay silent. Hers, however, is an eloquent silence.

The most intrusive and potentially most punitive federal agency has been politicized; the IRS has become an appendage of Barack Obama’s party. Furthermore, congruent with exhortations from some congressional Democrats, it is intensifying its efforts to suffocate groups critical of progressives, by delaying what once was the swift, routine granting of tax-exempt status.

So, the IRS, far from repenting of its abusive behavior, is trying to codify the abuses. It hopes to nullify with new rules the existing legal right of 501(c)(4) groups, many of which are conservative, to participate in politics. The proposed rules have drawn more than 140,000 comments, most of them complaints, some from liberals wary of IRS attempts to broadly define “candidate-related political activity” and to narrow the permissible amount of this.

Lerner is, so far, the face of this use of government to punish political adversaries. She knows what her IRS unit did and how it intersects with the law, and for a second time she has exercised her constitutional right to remain silent rather than risk self-incrimination. The public has a right to make reasonable inferences from her behavior.

And from Obama’s. After calling the IRS behavior “outrageous,” he now says there is not a “smidgen” of evidence of anything to be outraged about. He knows this even though the supposed investigation of the IRS behavior has not been completed, or perhaps even begun. The person he chose to investigate his administration is an administration employee and a generous donor to his campaigns.

Obama breezily says there was nothing more sinister than “boneheaded decisions” by wayward and anonymous IRS underlings. Certainly boneheadedness explains much about this administration. Still, does he consider it interesting that the consequences of IRS boneheadedness were not randomly distributed but thwarted conservatives? ...

There almost certainly are people, above her and beyond the IRS, who initiated or approved the IRS’s punitive targeting of conservative groups and who hope Lerner’s history of aggressive partisanship will cause investigators to conclude that she is as high as responsibility for the targeting rises. Those people should hire criminal defense attorneys.

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March 9, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, March 8, 2014

The IRS Scandal, Day 303

IRS Logo 2Tax Analysts Blog:  More Arrogance and Secrecy From the IRS, by Christopher Bergin:

A couple of days ago, the House Oversight and Government Reform Committee tried to hold a hearing on the IRS exemption scandal. I say try because it turned into a circus. Most of the press focused on the unprofessional and immature behavior of the committee’s top two members: Chair Darrell E. Issa, R-Calif., and ranking minority member Elijah E. Cummings, D-Md. The most significant part was largely ignored. ...

Lois Lerner, who is at the center of the controversy and the one who started all this by announcing at a meeting of the ABA Section of Taxation last May that the IRS had mistreated some conservative organizations, refused once again to testify. Somehow this thing has to come to a head.

I am not an IRS basher or hater. As I have said countless times, taking the heat for it every time (and that’s fair game, by the way), I know many fine people who have worked or work for that agency. But we are in litigation with the IRS in an attempt to get information on how it trained people to handle applications from groups seeking to be recognized as social welfare organizations. That litigation has been an incredibly frustrating process.

I don’t know if these apparent political decisions were made by Lerner or others either inside or outside the IRS, because trying to get information out of that agency is like trying to get sweat out of a rock. Over the years, it has fought the silliest things. I’m only half kidding when I say that if you asked the IRS to see the kind of staplers it’s using, it would tell you it doesn’t have staplers.

The IRS will go to great lengths not to be scrutinized. And that breeds an atmosphere of no accountability -- which leads to arrogance. We have seen that arrogance consistently throughout the congressional investigations of several IRS officials. And where will it lead us? Not to a good place, especially for those of us getting ready to file our yearly income tax returns. A tax collector that treats its “customers” as guilty until proven innocent is a tax collector out of control. That is precisely what the national taxpayer advocate has been warning about. If IRS officials don’t believe they are accountable to Congress, the rest of us don’t stand a chance. ...

Maybe it’s time to lay siege to Fortress Secrecy.

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March 8, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, March 7, 2014

The IRS Scandal, Day 302

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March 7, 2014 in IRS News, IRS Scandal, News, Tax | Permalink | Comments (3)

Thursday, March 6, 2014

The IRS Scandal, Day 301

New York Post editorial:  What is Lois Hiding?:

Where Lois Lerner goes, drama follows.

On Wednesday, the former IRS officer again invoked the Fifth before the House Oversight Committee. That precipitated a heated exchange between the committee’s Republican chairman, Darrell Issa, and Democratic ranking member Elijah Cummings, who called the hearings “un-American.” And that spat has become the story.

No doubt that is exactly what Cummings had in mind. Because it distracts attention from the substance of the hearings — and from the questions raised by e-mails and public remarks Lois Lerner wrote, received or made when she was IRS Director of Tax Exempt Organizations

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March 6, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)