TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Wednesday, June 29, 2016

The IRS Scandal, Day 1147

IRS Logo 2Politico Morning Tax: What's Next For John Koskinen?, by Bernie Becker:

The good news for Republicans seeking to remove the IRS commissioner: A group of legal scholars all agreed that providing false testimony to Congress rises to the level of impeachable offense. But as our Katy O’Donnell noted, there wasn’t a groundswell of support for the case that Republicans like House Oversight Chairman Jason Chaffetz and Rep. Jim Jordan were pushing — that Koskinen only needed to commit a bad act, not have bad intent, to borrow the phrasing of one of the witnesses. “The House has never impeached anyone for gross negligence or I think anything akin to it, and I think opening the door to that is going to present all sorts of serious problems,” said Michael Gerhardt, a law professor at the University of North Carolina.

In any event, the House Freedom Caucus wants a floor vote on Koskinen’s impeachment for his handling of the investigation into the IRS’s improper scrutiny of tea party groups, as The Hill’s Naomi Jagoda reports.

At the same time, Chaffetz’s measure to censure Koskinen has already passed the Oversight Committee. The last time Congress censured a sub-Cabinet official was back during the Teapot Dome scandal of the Roaring '20s, according to the Congressional Research Service. (Apparently, Teapot Dome was once a plot point on “Downton Abbey.”)

Speaking of the IRS (and the Constitution):  Those GOP efforts to strip Koskinen of his salary via the appropriations process might not be standing on the most solid constitutional footing, according to Richard Rubin of The Wall Street Journal. In fact, it could be a bill of attainder — just like the GOP efforts to take away Koskinen’s pension through the censure process. “This does sound a lot like imposing a punishment without a trial,” said Richard Briffault of Columbia Law School.

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June 29, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, June 28, 2016

The IRS Scandal, Day 1146

IRS Logo 2Politico Morning Tax: How Strong Is That Koskinen Case?, by Bernie Becker:

Koskinen, Round Two: The House Judiciary Committee’s exploration of the potential impeachment of IRS Commissioner John Koskinen plods forward today, with a hearing examining the standards for impeachment.

From the looks of things, the proceedings will turn on the question of bad faith. Michael Gerhardt, a law professor at UNC, is expected to testify that ill intent has always been a prerequisite for impeachment in the United States. But some of Koskinen’s biggest detractors have argued that “gross incompetence” is more than sufficient. Rep. Jim Jordan (R-Ohio), chairman of the House Freedom Caucus — which forced the Judiciary hearings on impeachment — said last month that impeachment should follow “gross negligence, dereliction of duty and breach of public trust.”

Jordan told POLITICO on Tuesday that he “was very pleased to see that the Judiciary Committee asked Andrew McCarthy to serve as a witness" and is looking forward to the hearing. No wonder — McCarthy’s written testimony suggests the 2013 nonprofit scandal is worse than former President Richard Nixon’s “largely unsuccessful” “endeavor” to abuse IRS powers. But even McCarthy, a former assistant U.S. attorney and a contributor at the conservative magazine National Review, notes the framers of the Constitution rejected “maladministration” as an impeachable offense. So it may fall to Republicans to prove Koskinen intended to obstruct Congress’ investigation of the targeting controversy — something they’ve failed to do so far. ...

Rep. Elijah Cummings of Maryland, the top Democrat on the House Oversight Committee, called out GOP efforts to impeach and/or censure Koskinen as “either pointless or unconstitutional.” Cummings cites several legal experts who said that House Oversight Chairman Jason Chaffetz (R-Utah) overstepped his bounds in saying that his censure resolution required that Koskinen forfeit his pension — because that would be an unconstitutional bill of attainder. Katy made a similar point last week and even Chaffetz acknowledged to reporters that the censure resolution can’t actually force Koskinen to lose his pension.

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June 28, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Monday, June 27, 2016

The IRS Scandal, Day 1145

IRS Logo 2Forbes:  IRS Targeting Scandal: Citizens United, Lois Lerner And The $20M Tax Saga That Won't Go Away, by Kelly Phillips Erb:

It was the question heard round the tax world. But it was the answer that made waves. In 2013, then Acting Director of Exempt Organizations at IRS, Lois Lerner, apologized to a room of tax lawyers for the IRS’s inappropriate targeting of conservative political groups. Her comments set off a chain of events that would slash IRS funds, fire officials and consider impeachment proceedings for IRS Commissioner Koskinen’s actions. But the scandal didn’t begin or end there.

July 2008:  In the run-up to the presidential election, Citizens United, a conservative lobbying group, wants to air a series of commercials promoting a film targeting Hillary Clinton, who was seeking the 2008 Democratic presidential nomination. The United States District Court for the District of Columbia ruled that they couldn’t, finding that it was a violation of the Bipartisan Campaign Reform Act of 2002 (also known as the McCain–Feingold Act). The group appealed. ...

June 22, 2016: ”We’re moving into uncharted waters,” Michael J. Gerhardt, a UNC Chapel Hall constitutional law professor, tells the Judiciary House Committee. Testifing about potential impeachment charges against IRS Commissioner Koskinen, Gerhardt said, “The House has never impeached a sub-Cabinet official. I would urge everyone here to look at alternatives.” He testified “the Founders did not want high-ranking officials in the executive or judicial branches to be subject to impeachment for their mistakes in office,” suggesting impeachment be reserved for more serious offenses.

Koskinen did not attend the hearing, and the IRS did not release an official comment on the proceedings.

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June 27, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Sunday, June 26, 2016

The IRS Scandal, Day 1144

IRS Logo 2Huffington Post:  The IRS And The Self-Minimization Of Congressman Jason Chaffetz, by Ralph Nader:

Politicians who limit the effectiveness of government agencies for short-term political advantages cheat taxpayers and short-change the government. ...

[Jason] Chaffetz chairs the House Oversight and Government Reform Committee - a body with powerful tools to investigate government waste, corruption and defiance of the laws. And he has vaulting ambitions, almost running for Speaker of the House last year with only seven years of seniority. ...

[W]hat is self-minimizing Congressman Chaffetz’s principal passion? Trying to impeach, censure or cause the resignation of the head of the IRS, the renowned turnaround specialist John Koskinen. The Utah Roman candle has accused Koskinen of interfering with a congressional investigation, not preserving pertinent records and lying to a congressional committee.

Koskinen repeatedly provided the committee with documentation for his denial of the charges that he was engaged in a cover-up of alleged IRS harassment of Tea Party and other conservative 501(c)(4) organizations applying for tax-exempt status. Ranking minority member Elijah Cummings (D-MD) laid out his own rebuttals, citing the Department of Justice investigation finding that “no evidence that any IRS official acted in a way that would support criminal prosecution” or that any official, including Mr. Koskinen, an Obama appointee, attempted to obstruct justice.

More telling was the exhaustive, multi-year, $2 million investigation by the Republican Inspector General of the IRS, Russell George, who cleared the IRS Commissioner of the Chaffetz Committee’s charges. Mr. George, a Bush appointee, found no politically motivated targeting of these conservative 501(c)(4) applications, no obstruction of justice and no concealing of information from Congress. Some bureaucratic sloppiness, sure, but that was all.

A more cutting judgement came from Law Professor Richard Painter, former Chief Ethics Lawyer for President George W. Bush, who said “this is essentially a dispute between the IRS and Members of Congress about the 501(c)(4) organizations that further the objectives of political campaigns, including campaigns for Members of Congress.”

Legal observers say Chaffetz’s resolution is not legally binding and is going nowhere. So what’s going on here is the Chaffetz caper is part of an overwhelming attack on the IRS by the Congressional Republicans-an attack that has turned them into major aiders and abettors of those who are sitting on $300 billion in annual uncollected taxes.

Washington Post:  Why the GOP Is Targeting the IRS, by Sen. Sheldon Whitehouse (D-WA):

If, as the editorial board suggested in its June 20 editorial, Unfairly Targeting the IRS, the GOP is unfairly targeting the Internal Revenue Service commissioner, what could be its reason for doing so? Follow the money. The IRS controls the “dark money” spigot that fills GOP coffers. If the IRS enforced its rules, or fixed its rules where they could not be enforced, or referred what appear to be self-evident false statements by dark-money groups to the Justice Department for investigation, the river of dark money flowing to the GOP might dry up. Keeping the IRS battered, cowed and on its heels makes strategic sense for the GOP.

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June 26, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Saturday, June 25, 2016

The IRS Scandal, Day 1143

IRS Logo 2Kay Bell (Don't Mess With Taxes), IRS Commissioner Impeachment Effort Inches Along at Second, Largely Ignored Judiciary Committee Hearing:

Internal Revenue Service Commissioner John Koskinen probably was the happiest person in Washington, D.C., today. On a day when the House Judiciary Committee's second hearing on his possible impeachment might otherwise have garnered much attention, the Capitol Hill session was upstaged by two other events. ...

[W]hat did all normal, nontax nerds who took a pass miss on the Koskinen front? Not much.

Same old, same old: The wagons were circled along party lines, with Judiciary Committee Chairman Rep. Bob Goodlatte spelling out the "serious allegations of misconduct" against Koskinen in his opening statement. ...

Giving false testimony to Congress about how the Internal Revenue Service [mis]handled intra-agency emails is an impeachable offense, but House [Republican] action sans Senate support would be a mistake. That was the assessment of Andrew McCarthy, a former assistant U.S. attorney for the Southern District of New York, at part 2 of the House Judiciary Committee's hearing to consider the impeachment of IRS Commissioner John Koskinen. ...

Michael Gerhardt, however, told Judiciary members that, "In my opinion, I think gross negligence doesn't qualify" as one of the constitutional requirements -- treason, bribery or other high crimes and misdemeanors -- for impeachment. Gerhardt, a constitutional law professor at the University of North Carolina Law School, said in his view, impeachable conduct would have to involve "bad intent."

The conflicting opinions of legal experts, which also included George Washington University law professor Jonathan Turley and Todd Garvey, legislative attorney with the Library of Congress, mirrored the disputes among the committee members themselves. ...

So far, Chaffetz has been able to get his GOP colleagues on Government Reform to agree to censure Koskinen. But his chances of impeachment the IRS chief are smaller. Neither House nor Senate Republican leaders have expressed support for the effort.

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June 25, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, June 24, 2016

The IRS Scandal, Day 1142

IRS Logo 2PJ Media, Impeachment and the IRS Scandal: Should John Koskinen Face the Music?:

[T]he instant matter involving Internal Revenue Service Commissioner John Koskinen, pertains to an investigation into not a mere “endeavor” (largely unsuccessful in the Nixon case) to abuse IRS powers but actual, concrete abuse, of those powers, including “income tax audits or other income tax investigations to be initiated or conducted in a discriminatory manner.” I further understand that the instant matter involves the provision of false statements and withholding of evidence from Congress.

I do not purport to have knowledge of the facts of Congress’s investigation. I note however that misconduct that was merely potential and coupled with blatantly obstructive actions was deemed sufficient to impeach (and would clearly have been sufficient to remove) a twice-elected president of the United States who had recently been reelected in one of the largest landslides in American history. It seems patent, then, that if established, actual misconduct in conjunction with blatantly obstructive actions would be sufficient to justify impeaching an unelected subordinate executive official responsible for administering the Internal Revenue Service.

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June 24, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, June 23, 2016

The IRS Scandal, Day 1141

IRS Logo 2Wall Street Journal, House Republicans Seek to Eliminate IRS Chief’s Paycheck:

Republicans have a new idea for attacking IRS Commissioner John Koskinen: Stop paying him.

Mr. Koskinen’s salary of about $165,000 a year would be cut to zero until the next president takes office Jan. 20, under an amendment the House of Representatives is considering this week. ...

The idea is to prevent Mr. Koskinen from coming to work, as federal law generally bars people from working for free, said Kyle Huwa, a spokesman for Mr. Buck. ...

[L]osing a few months of pay near the end of his career wouldn’t permanently damage Mr. Koskinen. According to his most recent financial disclosure, he is a multimillionaire.

Bloomberg, Push to Impeach IRS Chief Koskinen Stirs Scholars’ Disagreement:

Internal Revenue Service Commissioner John A. Koskinen committed an impeachable offense by giving false testimony to Congress about his agency’s preservation of e-mails, a conservative lawyer told the House Judiciary Committee.

Nonetheless, it would be “a mistake” for House Republicans to move forward with a drive to impeach Koskinen unless the Senate is also on board, said Andrew McCarthy, a former assistant U.S. attorney for the Southern District of New York who has written extensively on impeachment. Although the judiciary panel has conducted two hearings related to a possible impeachment of Koskinen, neither House nor Senate leaders have said they support it.

If it succeeded, it would be the first impeachment of an appointed executive-branch official in 140 years.

Koskinen, who took office in December 2013, was almost immediately mired in the agency’s response to a scandal that predated his tenure; IRS officials acknowledged that they had given extra scrutiny to conservative groups that sought tax-exempt status beginning in 2010. He didn’t attend Wednesday’s hearing, but he has said the allegations against him -- that he misled Congress and failed to ensure that the agency preserved all relevant e-mails -- are meritless.

“Every time I testified, I testified truthfully on what I knew,” Koskinen told reporters last month.

During the hearing, which was marked by partisan exchanges from both Republicans and Democrats, legal scholars disagreed on whether Koskinen’s conduct would constitute grounds for impeachment under constitutional language that specifies “treason, bribery or other high crimes and misdemeanors.”

“In my opinion, I think gross negligence doesn’t qualify,” said Michael Gerhardt, a professor of constitutional law at the University of North Carolina Law School. In his view, impeachable conduct would have to involve “bad intent,” he said.

Yet other witnesses, including Jonathan Turley, a law professor at George Washington University, said the standard is broader. “It doesn’t have to be an indictable offense,” he said. The constitution’s framers also discussed citing “maladministration” as grounds for impeachment, he said. “This is a standard that has room at the elbows,” he said.

Despite pending congressional subpoenas for “all communications sent or received by Lois Lerner,” in March 2014, IRS employees in West Virginia magnetically erased 422 backup tapes, which eliminated as many as 24,000 of her e-mails. Subsequent investigations by the Justice Department and the Treasury Department’s inspector general found that the destruction was accidental.

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June 23, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Wednesday, June 22, 2016

The IRS Scandal, Day 1140

IRS Logo 2The House Judiciary Committee holds a hearing today on Examining the Allegations of Misconduct Against IRS Commissioner John Koskinen, Part II:

  • Todd Garvey (Legislative Attorney, Library of Congress) (testimony)
  • Michael Gerhardt (Professor, North Carolina) (testimony)
  • Andrew McCarthy (Former Assistant U.S. Attorney, Southern District of New York) (testimony)
  • Jonathan Turley (Professor, George Washington) (testimony)

Bloomberg, IRS Chief Koskinen Fights First Appointee Impeachment Since 1876, by Lynnley Browning:

Impeachment is “the wrong symbol, the wrong act,” said Fred Goldberg, who served as IRS commissioner under Republican President George H.W. Bush. “‘It is both destructive and counterproductive.”

On Wednesday, the House Judiciary Committee is scheduled to hear from legal scholars and a former prosecutor on whether impeachment-drive leaders can meet legal standards for impeaching Koskinen. The panel is not expected to vote on an actual impeachment resolution, and neither House nor Senate leaders have endorsed the impeachment push. ...

If it succeeded, Koskinen would be the first appointed executive-branch official impeached since 1876, the year Alexander Graham Bell patented the telephone. And he’d be the only such official below the level of cabinet secretary to receive that dubious distinction. ...

The U.S. constitution says the president, vice president “and all civil officers of the United States shall be removed from office on impeachment for, and conviction of, treason, bribery or other high crimes and misdemeanors.” Witnesses set to testify at Wednesday’s hearing disagree on how that might apply to Koskinen’s case.

Jonathan Turley, a professor at George Washington University Law School, said impeachment is possible even without a finding of criminal conduct -- though he said he takes “a broader view on impeachment than some of my colleagues.”

Michael Gerhardt, a constitutional law professor at the University of North Carolina School of Law, said he doesn’t believe “gross negligence” constitutes grounds for impeachment. “My concern is that the impeachment resolution would be lowering the constitutional standard,” Gerhardt said. “It’s lower than what the framers of the constitution had in mind.”

A series of federal investigations into the IRS scandal faulted the agency for ineptness, but cleared it of criminal wrongdoing. In January 2014, the Federal Bureau of Investigation said it had found no evidence of bias that would warrant criminal charges. The Justice Department in October ended its own probe, which found “substantial evidence of mismanagement, poor judgment and institutional inertia,” but resulted in no charges.

“There wasn’t control of the document retention process,” said Mark Everson, who served as IRS commissioner from 2003 to 2007 under President George W. Bush. Complying with the congressional subpoenas “wasn’t handled correctly, and you can’t get out of that,” said Everson, who said he does not think impeachment is warranted.

IRS commissioners weren’t always the most disliked bureaucrats at the most-hated agency. There used to be “greater mutual respect between the IRS and congressional committees,” said Mortimer Caplin, 99, who headed the agency during President John F. Kennedy’s administration.

Now, the rancor evident in the impeachment push makes it difficult for the administration and Congress to work together on important legislation -- including efforts to overhaul and streamline the federal tax code, said Sheldon Cohen, a former IRS commissioner under President Lyndon Johnson. “The adversarial relationship makes tax reform almost impossible,” he said.

USA Today editorial, IRS Impeachment Overkill:

Commissioner Koskinen doesn't deserve this.

With their customary lack of subtlety, House Republicans are trying to unleash a nuclear bomb to swat the proverbial fly. The fly is IRS Commissioner John Koskinen. The bomb is impeachment, which has been used against an executive-branch official only three times in the nation’s history.

The allegations against Koskinen, while serious, do not rise anywhere near the level of becoming a fourth historic case. An impeachment resolution — which the House Judiciary Committee is scheduled to hear testimony on Wednesday — would diminish what's supposed to be a last-resort option for removing a corrupt official for alleged “high crimes and misdemeanors.” The IRS scandal does not qualify; for one thing, Koskinen, 76, wasn't even at the IRS when the underlying scandal occurred.

By overplaying their hand, the Republicans are obscuring serious questions about IRS misuse of its immense power. Koskinen was brought in to clean up the agency after revelations in 2013 that its tax-exempt division had targeted conservative organizations, including Tea Party groups, because of their political beliefs. The IRS sent the groups burdensome inquiries and delayed their applications for tax exemption, stopped some from participating in the 2012 presidential election.

While the IRS has a legitimate role in preventing blatantly political groups from exploiting tax-exempt status, targeting groups based on their politics is reminiscent of Richard Nixon using the IRS to harass his "enemies." Even President Obama acknowledged that such actions were “intolerable and inexcusable.” The scandal spurred congressional hearings, high-level resignations from the IRS and an FBI investigation, which found no criminal wrongdoing.

When Koskinen took over the agency, there was a need for openness and disclosure to get to the bottom of what happened. Instead, Koskinen presided over a “clean-up” marked by disappearing emails, bungled searches for backups, and a penchant for secrecy so strong that the IRS has resisted federal court orders to disclose documents to the groups targeted. ...

Republicans have good reason to press for release of relevant IRS documents, such as lists of the 426 targeted groups and emails by retired IRS official Lois Lerner, who was at the center of the controversy. But an official censure of Koskinen last week on a party-line vote of the House Oversight and Government Reform Committee, and the looming impeachment threat, are as misplaced as Republicans’ draconian cuts to the IRS budget. As the agency has struggled to do more with less, customer service has withered, identity theft has run rampant and reduced enforcement has allowed tax cheats to get away with more cheating.

If Congress wants to be helpful, it should simplify the absurdly complex tax code and give the IRS enough money to do its job, not waste time on overblown impeachment threats.

Fox News op-ed: Congress, Impeach IRS Chief and Hold Him Accountable for Targeting Scandal Coverup, by Jenny Beth Martin (Co-founder, Tea Party Patriots):

Three years after President Obama said wrongdoers involved in the IRS political persecution scandal should be held "fully accountable," no one has been held accountable.  Aside from Lois Lerner -- whom Obama's Department of Justice refuses to prosecute -- no one exemplifies the wrongdoing at the IRS more than its current commissioner, John Koskinen.

The House Judiciary Committee will vote this week on whether or not to impeach Koskinen; they should do so and the full House should follow and then the Senate should convict him, if there's any rule of law left in America. ...

Far from being chastened after getting caught red-handed in the first targeting scandal, the IRS seems almost emboldened to continue the targeting after getting away with flouting the law. During the initial phase of targeting, the IRS went to great lengths to cover its tracks. Records were purged, files were deleted, emails were mysteriously lost, and, incredibly, computer servers allegedly vanished into thin air. ...

Impeachment is, of course, an extraordinary measure and should be reserved only for the most egregious misconduct. In Federalist No. 65, Alexander Hamilton explained that impeachment is appropriate to address “those offenses which proceed from the misconduct of public men, or, in other words, from the abuse or violation of some public trust.”

Mr. Koskinen’s disregard for the rule of law meets Hamilton’s exacting requirements for impeachment. In fact, Koskinen’s misconduct demandsimpeachment if we are to restore the public trust and move past the IRS’s wholesale disregard for the Constitution.

The Hill, Bush Lawyer Rips GOP for Trying to 'Intimidate' IRS:

George W. Bush's former chief ethics lawyer is slamming congressional Republicans for trying to “intimidate” the Internal Revenue Service (IRS).

Richard Painter, who is now a professor at the University of Minnesota Law School, said the House should not pass a resolution to censure IRS Commissioner John Koskinen. The House Oversight and Government Reform Committee approved the measure last week on a party-line vote.

“This is essentially a dispute between the IRS and Members of Congress about the 501c4 organizations that further the objectives of political campaigns, including campaigns of Members of Congress,” Painter said in a letter to Oversight Committee members.

“The IRS is charged with determining whether the activities of these organizations comply with the Internal Revenue Code and it is not proper for Congress to seek to intimidate the IRS in the discharge of its duties,” he added.

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June 22, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, June 21, 2016

The IRS Scandal, Day 1139

IRS Logo 2The Surly Subgroup:  IRS Scrutinized Mostly Conservative Nonprofits: Evidence of Targeting?, by Philip Hackney (LSU):

Documents recently released in a court case demonstrate that 282 of 426 organizations caught in the IRS political advocacy, “Tea Party,” nonprofit organization net that caused such a hullabaloo three years ago, were in fact conservative. This comes three years after Lois Lerner apologized to Tea Party groups on behalf of the the IRS because, she said, it “inappropriate(ly)” selected these conservative groups’ applications for tax exemption for scrutiny based on name alone rather than legal cause.

An NPR report by Peter Overby concludes about the new information: “Whatever the IRS meant to do, this hodgepodge of a list illustrates how the agency bollixed the nonprofit application process.” In this post, I examine this seemingly “common-sense” claim and find it wanting. Additionally, because I have written publicly about this matter both at the time and more recently. I re-examine my conclusions in those writings in light of this new information.

Early on, I assumed that only about 1/3rd of the organizations caught in the IRS net were conservative. I made this assumption based on the TIGTA report because it noted that 96 of 298 applications, or 1/3rd of the organizations, were Tea Party, Patriot or 9/11 groups. I left wiggle room in my writing, but in the back of my mind, this was my assumption. I assumed TIGTA would have reported every conservative group that was in the lot. But, it turns out that about 2/3rds of the organizations  were conservative. Thus, my assumption was wrong. The vast majority of the organizations caught in the net were conservative. Nevertheless, I don’t think this new information demonstrates some additional level of bungling by the IRS that was hitherto unknown. And, frankly, a list like this with little context does nothing to tell us about whether the IRS was fair or not.

The most significant indictment of the IRS in this Tea Party matter has always been that the IRS “targeted” conservative organizations. No one has ever quite given any content to what this exactly means. Presumably it means that the IRS intentionally scrutinized conservative organizations in the application process in order to harm those conservative organizations and did not do the same to liberal organizations. The Inspector General reviewed whether the IRS “targeted” conservative organizations and found that the IRS used “inappropriate criteria” in selecting the Tea Party cases and that this could lead to impartial results. He found no evidence of some animus on the part of the IRS to support a targeting claim.

The targeting assertion, and the Inspector General’s assessment, give us a couple claims that new information could go towards proving: 1) the IRS scrutinized conservative nonprofits more than liberal nonprofits in its application process, and (2) either (a) the IRS did this intentionally, or (b) the IRS did this negligently.  ...

What does this information say about my prior conclusions? In my first quick analysis after the TIGTA report came out I argued that the IRS failed to adopt a careful selection process, asked too many intrusive questions, and subjected them to too great of delays. However, I suggested the IRS was set up for this failure because it had too many complex applications and not enough staff to review all applications with care.

It has to pick and choose organizations to focus upon and it is likely to miss applying appropriate scrutiny to many applications that should have received greater scrutiny while applying that scrutiny to a few organizations in a similar position, and to apply too much scrutiny to applications that should have received little or none. I argued that because of application volume and IRS staffing, the IRS was set up for the type of failure identified in the Tea Party affair.  I still think this is about right, and the new information says nothing new about that conclusion.

Later in Should the IRS Never Target Taxpayers I argued that  TIGTA wrongly took a position that the IRS is prohibited from using names as a means for selecting organizations for audit or for scrutiny of particular applications. It had no firm legal basis for making this claim. TIGTA based it on the principal that the IRS should be unbiased in its work. While certainly true, it seemed to be asserting that there was a duty of consistency as to every application that comes before the IRS. With the quantity of applications and staff, this is not even close to possible. And yet, TIGTA’s claim of “no using names” has become the measuring stick with which the public and commentators review this matter. ...

In the Tea Party cases the IRS had many reasons to believe these organizations might be violating the law by engaging in too much political activity for a section 501(c)(4) social welfare organization. In fact their names alone were evidence of such a potential intent. Additionally, given the substantial numbers of these cookie-cutter-like organizations, the IRS had good reasons to review all of the Tea Party and Patriot groups to ensure uniformity of treatment and a proper understanding of all of the relevant facts. However, because the IRS was enforcing a legal provision that impacted political speech it should have exercised greater care in its selection process. This new information tells us nothing about these basic conclusions.

Overby seems to suggest that this new information further damns the IRS’s behavior in the Tea Party matter. I find the evidence does not support this conclusion.

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June 21, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Monday, June 20, 2016

The IRS Scandal, Day 1138

IRS Logo 2Washington Post editorial, The GOP Congress Is Unfairly Targeting the IRS:

Most of the country has moved on from the Internal Revenue Service targeting controversy, which turned out to be not much of a scandal. Although initial reports seemed highly suspicious, it’s been clear for some time that administrative incompetence was the likely culprit, not the Obama administration vindictively singling out conservative groups for IRS scrutiny. But Rep. Jason Chaffetz (R-Utah) and the other Republicans on the House Oversight and Government Reform Committee are still outraged. Having turned what could have been a wholly reasonable investigation of IRS carelessness into a partisan scandal hunt, the most concrete result from their inquiries may end up being a gratuitous attack on a longtime public servant.

The committee voted on party lines Wednesday to censure IRS Commissioner John Koskinen, the man President Obama tapped to lead the agency after reports that IRS employees had disproportionately scrutinized conservative nonprofits. Nonprofits that may engage in political activity deserve IRS attention, because the government should not be subsidizing political groups through the tax code. The problem was the thoughtless way IRS employees went about determining which groups to examine. Mr. Koskinen, an old bureaucratic hand, was not at the IRS when this happened. He was just supposed to clean things up afterward.

As their inquiry failed to turn up evidence of malign political motives, House Republican investigators turned their sights on Mr. Koskinen personally, claiming that he badly — perhaps purposely — bungled his assignment. IRS employees destroyed a trove of emails the committee wanted to see — after the agency was supposed to be saving them. The IRS’s inspector general found that the erasure was an honest, if frustrating, mistake. Still, Mr. Koskinen’s congressional inquisitors charge, he did not confess to Congress when he should have. Some statements he made to Congress turned out to be untrue. The IRS director has a reasonable response to that, too: He did not immediately know the nature or extent of the gap in emails, and once he did, he ordered his staff to attempt to recover what they could.

The GOP Congress has already harassed and weakened the IRS through counterproductive budget cuts. Now Republican lawmakers appear to be doing their best to deter anyone of competence from ever agreeing to lead the agency. The result of a congressional investigation into IRS dysfunction would end up being more IRS dysfunction.

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June 20, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (8)

Sunday, June 19, 2016

The IRS Scandal, Day 1137

IRS Logo 2Real Clear Politics, Strassel Nails the Left's "Intimidation" Crusade, by Peter Berkowitz (Hoover Institution, Stanford University):

The most notorious instance of the left’s efforts to use government power to intimidate political opponents during Obama’s presidency was the Internal Revenue Service’s targeting, beginning in 2010, of some 300 small, often Tea Party-affiliated conservative organizations that had applied for tax-exempt status. The IRS’s job was to ensure that applications had been filled out correctly. But at the behest of longtime Democratic Party partisan and then-director of the IRS’ Exempt Organizations Unit Lois Lerner, the agency delayed action on applications for months, which in many cases stretched into years.

Sometimes the IRS directed targeted organizations to answer extensive questionnaires that were “a mix of boring officialdom and sinister intrusiveness.” In the case of the San Fernando Valley Patriots—a small organization established to oppose what they deemed an arrogant, overspending, out-of-touch Washington establishment—the IRS requested, Strassel reveals, “the names and Social Security numbers of every person who had ever donated their money or time to SFVP.”

The IRS conspiracy to drive conservatives from the political arena, the impact of which on the 2012 presidential election may have been decisive, was part of a multi-front offensive. Strassel recounts harrowing tale after tale of private citizens, nonprofits, corporations, and elected officials caught in the maws of a “vast and orchestrated” campaign to close down speech.

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June 19, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (12)

Saturday, June 18, 2016

The IRS Scandal, Day 1136

IRS Logo 2NPR, Court Documents Show The IRS Focused Scrutiny On Conservative Groups:

Three-year-old allegations of political influence at the Internal Revenue Service are being revived as two House committees move toward punishing the IRS commissioner, John Koskinen.

The House Oversight Committee this week voted on party lines to censure Koskinen. The House Judiciary Committee holds its second hearing next week on whether to impeach him.

"This all started with the IRS using its authorities to target certain conservative groups for their beliefs," Oversight Committee Chairman Jason Chaffetz, R-Utah, said in prepared testimony to the Judiciary panel.

This has been the accusation against the IRS since 2013, when Lois Lerner — head of the office that reviewed applications for tax-exempt status — admitted that the agency put additional scrutiny into the applications for nonprofit tax status of conservative and Tea Party groups.

Since the Supreme Court's 2010 Citizens United decision, politically active nonprofit groups have proliferated. The nonprofit tax status shields such groups from having to disclose donors, but it also requires that at least half of the group's activities focus on nonpolitical, "social welfare" causes.

Republicans allege an organized effort, possibly run by the White House, to aggressively probe and then stall the applications in order to handicap its political opposition. The Treasury Department's inspector general overseeing the IRS found that progressive groups were treated the same way. Democrats blame it all on bureaucratic mistakes, misjudgments and understaffing and say the GOP is on a witch hunt.

Until now, what's been missing is a list of the nonprofit groups that got special scrutiny — a list that presumably would show whether the agency had a political agenda or not.

Now, thanks to filings in a federal lawsuit in Ohio, there is such a list, with 426 names on it. And yes, it's top-heavy with conservative groups. ...

In all, 282 conservative groups were on the IRS list, about two-thirds of the total number of groups that got additional scrutiny. ... Whatever the IRS meant to do, this hodgepodge of a list illustrates how the agency bollixed the nonprofit application process. Now the partisan controversy seems to have knocked the agency out of its enforcer's role as nonprofit groups move deeper into politics.

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June 18, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, June 17, 2016

The IRS Scandal, Day 1135

IRS Logo 2Politico Morning Tax, What’s Next for Koskinen:

The House Oversight Committee cleared its measure to censure IRS Commissioner John Koskinen on Wednesday in a predictably partisan vote. But that action also raised a couple of questions: What’s next? And what’s going on with Koskinen’s pension?

The House Judiciary Committee will hold its hearing next week on standards for impeachment, Oversight Chairman Jason Chaffetz’s preferred avenue for punishing Koskinen over the loss of documents from Lois Lerner — the central figure in the IRS’s improper scrutiny of tea party groups. But Chaffetz also told Morning Tax that he’s not sure whether GOP leaders, who haven’t exactly embraced his efforts to remove Koskinen, will bring up the censure resolution. “I hope they do it sooner rather than later,” Chaffetz said. “Nothing negative, but nothing certain either on dates.”

On the other issue, our Katy O’Donnell notes that the censure resolution says Koskinen “should” lose his pension, while an Oversight release said the vote “requires” that step. And as Katy also notes, the Congressional Research Service has been skeptical that Congress can use a censure to impose a financial penalty on officials outside the legislative branch without it being an unconstitutional bill of attainder. For his part, Chaffetz acknowledged the censure couldn’t on its own claw back Koskinen’s pension. “We’re stating what we believe is the right course of action, that there ought to be some repercussions for losing the trust of the American people,” he told Morning Tax.

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June 17, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Thursday, June 16, 2016

The IRS Scandal, Day 1134

IRS Logo 2New York Times, House Panel Recommends Censure of I.R.S. Commissioner:

A polarized House committee on Wednesday recommended that the House censure the commissioner of the Internal Revenue Service, John A. Koskinen, and seek to strip him of his office and his federal pension for “a pattern of conduct” that betrayed the trust of Congress and the public.

Following the House Republicans’ vote in 2012 to hold the attorney general at the time, Eric H. Holder Jr., in contempt of Congress, the action against Mr. Koskinen appeared to show the lengths they would go to pursue Obama administration officials they oppose. Separately they are considering the more severe action of impeaching Mr. Koskinen, a move that has not been taken against a federal executive other than two presidents in 140 years.

Censure by the House would be the first step, supporters say, yet its impact will probably be limited to political symbolism. The Senate, also run by Republicans, is not expected to follow suit, or to support impeachment. It is unclear when the full House might act on the censure resolution, said aides to House Republican leaders, who are unenthusiastic about the effort against the commissioner.

The House Oversight and Government Reform Committee voted 23 to 15 for his censure, with Republicans in support and Democrats opposed, after hours of exchanging condemnation and praise for Mr. Koskinen.

New York Times, Head of I.R.S., Facing Censure, Relishes a Job Few Could Love:

By John A. Koskinen’s reckoning, at nearly 77 years of age he might finally have his best job ever: commissioner of the Internal Revenue Service.

“If it’s a job where the first thing people say is, ‘Why would you do that?’ then it’s got to be a good job,” he said in an interview.

Little could Mr. Koskinen have imagined how “good” the job would get.

[S]ome Republicans say [censure] will just be a prelude to his impeachment. Besides two presidents, no federal executive has been impeached since William W. Belknap, the secretary of war, in 1876.

Meantime, though, thank you for your service. ...

Mr. Koskinen became the nation’s top tax collector in December 2013 to steady an agency rattled by political upheaval, the latest in a string of knotty assignments he has gotten from presidents of both parties. Since then, things have not gone so smoothly. Critics say Mr. Koskinen obstructed justice and misled Congress as House Republicans continued their inquiries into allegations that I.R.S. employees discriminated against conservative groups seeking tax-exempt status in 2010 and beyond — scrutiny that began before Mr. Koskinen’s arrival.

He has denied the allegations and said his testimony about missing agency emails that turned out to be wrong was based on what he believed to be true at the time. Other investigators — including the Treasury’s inspector general, a Republican, and a bipartisan Senate Finance Committee — criticized Mr. Koskinen’s lapses but found no evidence politics played a role. ...

The genial septuagenarian has long enjoyed a sort of behind-the-scenes prominence, well known to Washington insiders and business leaders. He is also well known to fans of soccer and Duke University — his dual passions — and the soccer stadium there, Koskinen Stadium, is named after him. Mr. Koskinen won the prestigious Elliot L. Richardson Prize this year “for excellence and integrity in government service,” timing that suggested the selection panel’s indifference to the well-publicized complaints of congressional Republicans. ...

In Mr. Koskinen’s telling, he does not get hired; he is “dragooned” — he used the word more than once during an interview in a spacious, if drab, office with few personal touches besides family photos and mementos from previous jobs.

“I never apply for jobs — I just keep getting them,” Mr. Koskinen said. “I say I’m going to go into the witness protection program, and they’ll never find me again.”

He has a physics degree from Duke and a law degree from Yale.

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June 16, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Wednesday, June 15, 2016

The IRS Scandal, Day 1133

IRS Logo 2Nonprofit Quarterly: After a 3-Year Wait, IRS Releases List of Groups Targeted in Scandal, by Michael Wyland:

In response to a class action lawsuit, the IRS released a list of 426 organizations it says were singled out for special scrutiny beginning in 2010 in what became known as the IRS scandal. The list is larger than the 298 overwhelmingly conservative groups identified by U.S. Treasury Inspector J. Russell George in his May 2013 report that first brought the scandal to public attention. ...

Most people have lost track of the IRS scandal, and some even deny to this day that there ever was a scandal. Paul Caron, a law Professor at Pepperdine University, is continuing to keep count of the days. (June 7, 2016 is Day 1125.) The House Judiciary Committee is considering the impeachment of IRS Commissioner John Koskinen, but this is widely seen as a partisan exercise by Republicans—even by those who believe others, especially former Exempt Organizations Director Lois Lerner, should be held accountable for their actions in the IRS targeting scandal.

One observation NPQ has made in the past bears restating as the political and judicial processes continue: The public disclosure of much of what we have learned over the past year or more has come as the result of nonprofit advocacy and the access of nonprofit advocates to support from federal courts. Groups such as Judicial Watch and Cause of Action have peppered executive agencies with Freedom of Information Act (FOIA) requests and sued in court when their requests were refused or ignored.  The class action lawsuit is led by the NorCal Tea Party Patriots, a 501(c)(4) social welfare nonprofit and one of the groups targeted by the IRS. Judicial Watch and Cause of Action are also aggressively pursuing other issues associated with political conservatives, including Hillary Clinton’s State Department emails and the Obama administration’s enforcement of immigration laws. There is a developing appearance that nonprofit advocacy groups, with judicial support, are having better success than Congress in investigating the executive branch of the federal government and securing the release of documentary evidence.

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June 15, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, June 14, 2016

The IRS Scandal, Day 1132

IRS Logo 2The Hill, Oversight Panel to Vote on Resolution to Censure IRS Chief:

The House Oversight and Government Reform Committee is set to vote Wednesday on a resolution to censure Internal Revenue Service Commissioner John Koskinen.

The vote is part of a larger effort by House Republicans against Koskinen. Many GOP lawmakers have accused him of engaging in misconduct while Congress was investigating findings that the IRS subjected conservative groups' applications for tax-exempt status to extra scrutiny. 

The House Judiciary Committee is also weighing whether Koskinen should be impeached and is holding its second hearing on the matter next week.

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June 14, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, June 13, 2016

The IRS Scandal, Day 1131

House LogoH.R. Rep. No. 612, 114th Cong., 2d Sess.:

I. SUMMARY AND BACKGROUND

A. PURPOSE AND SUMMARY

H.R. 5053, as reported by the Committee on Ways and Means, would prohibit the Internal Revenue Service (IRS) from collecting the identity of donors who contribute to tax-exempt organizations. Under this legislation, a tax-exempt organization would be required to report only information on donors who contribute $5,000 or more during a single tax year and who are either an officer or director of the organization or one of its five highest paid employees. This information would be excluded from public disclosure.

B. BACKGROUND AND NEED FOR LEGISLATION

Current law requires section 501(c)(3) tax-exempt organizations to report information on substantial donors. The IRS defines a substantial donor as a contributor who gives $5,000 or more to an organization in a calendar year. This information is reported on the Schedule B of the Form 990. The requirement to file a Form 990 applies to tax-exempt organizations generally, not just to section 501(c)(3) tax-exempt organizations. Thus, the IRS has expanded the substantial donor reporting requirements to more than section 501(c)(3) tax-exempt organizations. While the IRS does not make this information public, there have been instances where IRS employees have improperly accessed and released the Schedule B donor list. A notable example is the National Organization for Marriage, which had information from its Schedule B leaked in 2012 and the IRS subsequently paid $50,000 to settle a lawsuit with the organization claiming that the IRS improperly accessed the information. Certain states, including California, have moved to make Schedule B information public. The move to publicize Schedule B information was the subject of a recent lawsuit, Americans for Prosperity Foundation v. Kamala Harris, Attorney General for California. The Attorney General of California wanted to require that the Americans for Prosperity Foundation disclose its Schedule B to the California State Registry. In April 2016, the U.S. District Court ruled that requiring the organization to disclose its Schedule B was unconstitutional.

In recent years it was also revealed that the IRS used inappropriate criteria to target organizations applying for tax-exempt status. Additionally, the IRS is considering eliminating Schedule B entirely. H.R. 5053 would protect taxpayers from improper disclosure of Schedule B information, as well as limit the IRS’s ability to target organizations improperly. The legislation also eliminates a burdensome reporting requirement for tax-exempt organizations. ...

II. EXPLANATION OF THE BILL

A. PROHIBITION ON REQUIRING THAT IDENTITY OF CERTAIN CONTRIBUTORS TO SECTION 501(c) ORGANIZATIONS BE INCLUDED ON ANNUAL RETURNS (SEC. 32 OF THE BILL AND SEC. 6033 OF THE CODE)

PRESENT LAW

In general, organizations exempt from taxation under section 501(a) are required to file an annual return (Form 990 series), stating specifically the items of gross income, receipts, disbursements, and such other information as the Secretary may prescribe. An organization that is required to file an information return, but that has gross receipts of less than $200,000 during its taxable year, and total assets of less than $500,000 at the end of its taxable year, may file Form 990–EZ. Section 501(c)(3) private foundations are required to file Form 990–PF rather than Form 990. An organization that has not received a determination of its tax-exempt status, but that claims tax-exempt status under section 501(a), is subject to the same annual reporting requirements and exceptions as organizations that have received a tax-exemption determination.

On the applicable annual information return, organizations are required to report their gross income, information on their finances, functional expenses, compensation, activities, and other information required by the IRS in order to review the organization’s activities and operations during the previous taxable year and to review whether the organization continues to meet the statutory requirements for exemption. Examples of the information required by Form 990 include: (1) a statement of program accomplishments; (2) a description of the relationship of the organization’s activities to the accomplishment of the organization’s exempt purposes; (3) a description of payments to individuals, including compensation to officers and directors, highly paid employees and contractors, grants, and certain insider transactions and loans; and (4) disclosure of certain activities, such as expenses of conferences and conventions, political expenditures, compliance with public inspection requirements, and lobbying activities.

Form 990–PF requires, among other things, reporting of: the foundation’s gross income for the year; expenses attributable to such income; disbursements for exempt purposes; total contributions and gifts received and the names of all substantial contributors; names, addresses, and compensation of officers and directors; an itemized statement of securities and other assets held at the close of the year; an itemized statement of all grants made or approved; and information about whether the organization has complied with the restrictions applicable to private foundations (secs. 4941 through 4945).

An organization that files Form 990, Form 990–EZ, or Form 990– PF and receives during the year $5,000 or more (in money or property) from any one contributor generally must report such contributions on Schedule B (‘‘Schedule of Contributors’’). The Schedule B is open to public inspection for an organization that files Form 990–PF (private foundations) or a section 527 political organization that files Form 990 or Form 990–EZ. For all other Form 990 and Form 990–EZ filers, the names and addresses of contributors are not required to be made available for public inspection. All other information, including the amount of contributions, the description of noncash contributions, and any other information, is required to be made available for public inspection unless it clearly identifies the contributor. As a matter of practice, the IRS does not include Schedule B on the CD sets or any other form of media made available to the public. Instead, on a case-by-case basis, when an individual makes a request for a specific organization’s Schedule B, the IRS reviews and redacts the schedule in an effort to avoid divulging information that would identify any contributor. 

The requirement that an exempt organization file an annual information return (Form 990 or Form 990–EZ) does not apply to certain exempt organizations, including organizations (other than private foundations) the gross receipts of which in each taxable year normally are not more than $50,000. Organizations that are excused from filing an information return by reason of normally having gross receipts below such amount must furnish to the Secretary an annual notice (Form 990–N), in electronic form, containing certain basic information about the organization.

Other organizations exempt from the annual information return requirement include: churches, their integrated auxiliaries, and conventions or associations of churches; the exclusively religious activities of any religious order; certain State institutions whose income is excluded from gross income under section 115; an interchurch organization of local units of a church; certain mission societies; certain church-affiliated elementary and high schools; and certain other organizations, including some that the IRS has relieved from the filing requirement pursuant to its statutory discretionary authority.6

REASONS FOR CHANGE

The Committee is concerned that the IRS is collecting sensitive information about donors who contribute to tax-exempt organizations. Although the IRS is required by law to maintain the confidentiality this information, the Committee is aware of instances in which the information was released to third parties. Furthermore, the Committee is concerned that the IRS might use donor information to penalize tax-exempt organizations or donors based on their political beliefs. By limiting the contribution information taxexempt organizations report to the IRS, the provision will protect taxpayers’ identities and help prevent inappropriate political targeting by the IRS. In addition, the Committee believes the Schedule B provides little administrative benefit to the IRS. In fact, senior leadership of the IRS’s Exempt Organizations Division has stated recently that the IRS is considering eliminating the Schedule B filing requirement.

EXPLANATION OF PROVISION

The provision limits the contributor information that must be reported by an organization described in section 501(c) on its annual information return. Under the provision, except as described below, the Secretary may not require an organization to report the name, address, or other identifying information of any contributor to the organization with respect to any contribution, grant, bequest, devise, or gift of money or property, regardless of amount.

The provision provides two exceptions to this prohibition. First, the Secretary is not prohibited from requiring the information described in section 6033(a)(2) relating to prohibited tax shelter transactions. Second, the Secretary is not prohibited from continuing to require reporting of contributions, grants, bequests, devises, or gifts of money or property in excess of $5,000 made by an officer or director of the organization (or an individual having powers to responsibilities similar to those of officers or directors) or by a covered employee. Covered employee means any employee (including any former employee) of the organization if the employee is one of the five highest compensated employees of the organization for the taxable year. For this purpose, an employee’s compensation includes compensation from the organization as well as any compensation paid with respect to the employment of such employee by any related person or governmental entity. A person or governmental entity is treated as related to the organization if it: (1) controls or is controlled by the organization; (2) is controlled by one or more persons that control the organization; (3) is a supported organization (as defined in section 509(f)(3)) during the taxable year with respect to the organization; (4) is a supporting organization described in section 509(a)(3) with respect to the organization; or (5) in the case of an organization that is a voluntary employees’ beneficiary association described in section 501(c)(9), establishes, maintains, or makes contributions to such voluntary employees’ beneficiary association.

The provision makes a conforming amendment to section 6033(b), which describes certain information that a section 501(c)(3) organization must include on its annual information return. ...

VII. DISSENTING VIEWS

We oppose H.R. 5053, which would prohibit the Secretary of the Treasury from collecting the name, address, or other identifying information of contributors to any tax-exempt, 501(c) organization except in limited circumstances. This bill would open the floodgates for unlimited, anonymous, unaccountable money to pour into U.S. elections—including possibly from foreign sources.

Under present law, certain 501(c) organizations must attach to their annual information returns (IRS Forms 990) a list (Schedule B) of donors who contribute $5,000 or more during the year (‘‘substantial contributors’’). The Schedule B is kept confidential by the Internal Revenue Service (IRS) and is not made public.

Certain 501(c) organizations, such as social welfare organizations, are permitted to engage in political activity. These politically active 501(c)(4) organizations are required to disclose their substantial contributors to the IRS but are not required to disclose them to the public.

There has been a sharp rise in undisclosed money being spent by tax-exempt groups in federal elections since the Supreme Court issued its 2010 Citizens United decision. This bill would make it even easier for donors to anonymously funnel money in support of political candidates. Already in this election cycle, according to the Center for Responsive Politics, political spending by tax-exempt groups is five times the amount spent at this point during the 2012 election cycle.

It is no secret as to why Republicans are working to keep donors a secret: the three largest spenders from 2012—representing fully 51% of the total—include Karl Rove’s Crossroads GPS (that spent $71 million); the Koch Brothers’ Americans for Prosperity (that spent $36 million); and the Koch Brothers’ American Future Fund (that spent $25 million). It is no surprise the Koch Companies Public Sector, LLC sent a letter to Republican Members on the day of the markup urging them to support the bill. Simply put, H.R. 5053 does nothing more than solidify the secrecy around the Republicans’ big campaign efforts.

The bill also potentially opens the door for unlimited, secret money from foreign governments or individuals to be funneled into our elections. Currently, foreign money cannot be given or spent in our elections. The only real protection we have against the use of foreign money by politically active social welfare organizations is that they must disclose their substantial contributors to the IRS. This requirement means that tax-exempt, 501(c)(4) groups know they can be held accountable if they illegally spend foreign money in federal elections. Campaign finance reform groups opposing this bill warned that, if donor disclosure to the IRS is eliminated, no one will know whether a social welfare organization has received foreign funds and is illegally spending them in our elections.

We should not support efforts to reduce transparency and make it easier for donors to pour unlimited funds into political campaigns. For these reasons, we oppose this bill.

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June 13, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Sunday, June 12, 2016

The IRS Scandal, Day 1130

IRS ChurchThe Surly Subgroup:  Tying the IRS’s Hands. Even Tighter, by Sam Brunson (Loyola-Chicago):

Yesterday, the House Committee on Appropriations reported H.R. 2995 to the House of Representatives. H.R. 2995, the Financial Services and General Government Oversight Appropriations Bill  for FY 2017, if passed, would continue the trend of reducing the IRS’s budget, this time by $236 million. ...

I’m interested in an amendment added yesterday by Rep. John Culberson (R-TX). Section 135 of the bill would make it even harder than it already is for the IRS to audit churches. 

The IRS already faces significant limitations on its ability to audit churches. ... The result? Churches are rarely audited, and even more rarely lose their exemptions. While the IRS doesn’t disclose the number of church audits it performs, the ECFA suggests that there may be 100 church audits a year. And how many churches are there in the U.S.? Again, hard to say, but the U.S. Religion Census finds about 345,000 congregations in the U.S. That would be a 0.03% audit rate; even assuming the number of churches is off by a factor of 10, we’re talking a 0.3% audit rate. And I can only find one report of a church losing its exemption for violating the campaigning prohibition (even though thousands of churches have deliberately and explicitly violated it).

That, though, is apparently insufficient for Rep. Culberson, who claims he added his amendment to “protect churches from being bullied by the Internal Revenue Service (IRS) and left-wing activists whenever a church engages in educational political activity.”

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June 12, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Saturday, June 11, 2016

The IRS Scandal, Day 1129

IRS Logo 2Omaha World-Herald editorial, IRS Stonewalling:

The Internal Revenue Service has, at long last, made public a list of 426 politically conservative organizations targeted by its tax-exempt division.

It took a lawsuit and three long years to pry all of the information into public view. That’s outrageous. But then, foot-dragging and obfuscation have been the agency’s tactics from the start of this sorry affair.

The official at its center, Lois Lerner, took refuge behind the Fifth Amendment when called to answer questions from Congress. Then the IRS claimed that a crash of Lerner’s computer made it “impossible” to produce her emails — until 30,000 were recovered by a Treasury Department inspector general.

All of this does nothing to reassure taxpayers of the agency’s needed fairness. ...

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June 11, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, June 10, 2016

The IRS Scandal, Day 1128

IRS Logo 2The Hill, House Panel Votes to Cut IRS Funding:

The House Appropriations Committee on Thursday approved a spending bill that would reduce funding for the Internal Revenue Service (IRS).

The bill would give the IRS $10.9 billion for fiscal 2017, which is $236 million less than the enacted level for this year.

The IRS budget under the bill would be lower than its 2008 level and $1.3 billion less than President Obama requested in his budget. The bill also includes provisions to stop the IRS from further implementing ObamaCare and to increase oversight of the IRS in the wake of its political-targeting scandal.

Republicans supported the bill’s treatment of the IRS.

Rep. Ander Crenshaw (R-Fla.), chairman of the subcommittee with jurisdiction over the bill, said that instead of turning over a new leaf after the targeting scandal came to light, “the IRS made a series of embarrassing management mistakes at the expense of customer service.”

But Democrats expressed concerns about the cuts to the IRS. Rep. José Serrano (D-N.Y.), the top Democrat on the subcommittee, said that “by continually cutting the IRS, we are simply empowering tax cheats and confusing honest taxpayers.”

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June 10, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, June 9, 2016

The IRS Scandal, Day 1127

Wednesday, June 8, 2016

The IRS Scandal, Day 1126

IRS Logo 2Wall Street Journal:  The IRS’s Ugly Business as Usual, by Kimberly A. Strassel:

‘How much has really changed?’ a judge asks. Answer: not much. The scandal goes on.

Amid the drama that is today’s presidential race, serious subjects are getting short shrift. No one is happier about this than Barack Obama. And no agency within that president’s administration is more ecstatic than the Internal Revenue Service.

That tax authority’s targeting of conservative nonprofits ranks as one of the worst federal scandals in modern history. It is topped only by the outrage that no one has been held to account. Or perhaps by the news that the targeting continues to this day.

That detail became clear in an extraordinary recent court hearing, in front of a panel of judges for the D.C. Circuit Court of Appeals. The paired cases in the hearing were Linchpins of Liberty, et al. v. United States of America, et al. and True the Vote Inc. v. Internal Revenue Service, et al. They involve several conservative nonprofits—there are 41 in Linchpin—that were, as they said, rounded up and “branded” by the IRS. The groups are still suffering harm, and they want justice. 

A lower-court judge had blithely accepted the IRS’s claim that the targeting had stopped, that applications for nonprofit status had been approved, and that the matter was therefore moot.

The federal judges hearing the appeal, among them David B. Sentelle and Douglas H. Ginsburg, weren’t so easily rolled. In a series of probing questions the judges ascertained that at least two of the groups that are party to the lawsuit have still not received their nonprofit approvals. The judges determined that those two groups are 501(c)(4) social-welfare groups, which are subject to far less scrutiny than 501(c)(3) charities, yet are still being harassed by the IRS five years later. The judges were told that not only are the groups still on ice, but that their actions are still being “monitored” by the federal government.

The hearing also showed the degree to which the IRS has doubled down on its outrageous revisionist history, and its excuses. IRS lawyers again claimed that the whole targeting affair came down to bad “training” and bad “guidance.” They blew off a Government Accountability Office report that last year found the IRS still had procedures that would allow it to unfairly select organizations for examinations based on religious or political viewpoint. The lawyers’ argument: We wouldn’t do such a thing. Again. Trust us.

More incredibly, the IRS team claimed that the fault for some of the scandal rests with the conservative groups, for not pushing back hard enough during the targeting. ...

At one point, an incredulous Judge Sentelle noted that the IRS might be more believable if it had ever shown “a bit more contrition.” He said: “The Court would have to be awfully ignorant not to recognize that there has likely been an egregious violation of the First Amendment rights of American citizens by the IRS, and the IRS to this day seems very resistant to acknowledgment of that.”

An IRS lawyer rolled out the defense used by former agency official Lois Lerner that the targeting was just the unfortunate use of “inappropriate” criteria, but Judge Sentelle reminded the lawyer of the IRS’s vindictiveness. He noted that on one occasion the IRS simply shelved the application of an organization that had sued it. The agency “came to Court not having done anything to eliminate” the problem, he said, so “It’s just hard to find the IRS to be an agency we can trust, isn’t it?”

Judge Sentelle said there is a “pretty good case” that “egregious violations of the Constitution” had been committed, and he dared an IRS lawyer to “stand there with a straight face” and say otherwise. Judge Ginsburg, who spent the hearing catching out the IRS’s conflicting statements, at one point simply asked: “How much has really changed?”

Answer: not much. It was good news, then, that the House Judiciary Committee recently announced it will hold two hearings to examine the conduct of IRS Commissioner John Koskinen in this matter. Donald Trump, as the presumptive GOP nominee, could do worse than to use his megaphone to draw attention to the hearings. The IRS scandal needs to remain a story.

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June 8, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, June 7, 2016

The IRS Scandal, Day 1125

IRS Logo 2Wall Street Journal editorial, The IRS Hit List: The Agency Finally Discloses the Groups It Politically Targeted:

Three years on, the Internal Revenue Service has finally handed over its list of the organizations the agency’s tax-exempt division targeted for their political views. All it took to shake the disclosure from the agency were dozens of lawsuits and a federal appeals-court order.

In a court filing last month, the IRS produced a list of 426 groups that were singled out for special scrutiny and in some cases had approval of their application for tax-exempt status delayed. ... The list doesn’t include 40 groups that have already opted out of the suit, so the actual number targeted is 466. The lawsuit’s goal is to find out how the targeting occurred and to seek damages for “viewpoint discrimination,” among other legal violations.

The IRS hasn’t explained why its number is so much higher than the 298 groups that Treasury Inspector General Russell George identified in his 2013 audit that disclosed the targeting. The latest list also contains more liberal groups than Mr. George’s original report mentioned.

Mark Meckler, president of Citizens for Self Governance, which is financing the NorCal lawsuit, suspects this is more proof of IRS misbehavior: “I think what more discovery will show is that once the IRS came under fire, it started adding [liberal] names to obfuscate what it was doing.”

The agency wouldn’t have turned over even these names if not for the Sixth Circuit Court of Appeals, which in March excoriated the IRS for stonewalling on NorCal’s discovery request and ordered the list’s release. The Senate voted to confirm IRS Commissioner John Koskinen in 2013 only after he promised to clean up the agency, yet on his watch the bureaucracy has resisted efforts by Congress and the courts to investigate the scandal. In this case, and others, the tax agency has earned all of the public enmity that comes its way.

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June 7, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, June 6, 2016

The IRS Scandal, Day 1124

IRS Logo 2Washington Times, IRS Finally Reveals List of Tea Party Groups Targeted for Extra Scrutiny:

More than three years after it admitted to targeting tea party groups for intrusive scrutiny, the IRS has finally released a near-complete list of the organizations it snagged in a political dragnet.

The tax agency filed the list last month as part of a court case after a series of federal judges, fed up with what they said was the agency’s stonewalling, ordered it to get a move on. The case is a class-action lawsuit, so the list of names is critical to knowing the scope of those who would have a claim against the IRS.

But even as it answers some questions, the list raises others, including exactly when the targeting stopped, and how broadly the tax agency drew its net when it went after nonprofits for unusual scrutiny.

The government released names of 426 organizations. Another 40 were not released as part of the list because they had already opted out of being part of the class-action suit. ...

Edward D. Greim, the lawyer who’s pursuing the case on behalf of NorCal Tea Party Patriots and other members of the class, said the list also could have ballooned toward the end of the targeting as the IRS, once it knew it was being investigated, snagged more liberal groups in its operations to try to soften perceptions of political bias.

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June 6, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Sunday, June 5, 2016

The IRS Scandal, Day 1123

IRS Logo 2Fox News op-ed:  The Case for Impeaching the IRS Commissioner, by Jim Jordan (R-OH) & Ron DeSantis (R-FL):

Civil servants like Mr. Koskinen have historically been held to a higher standard than private citizens because they have fiduciary obligations to the public. Under Mr. Koskinen’s leadership, the IRS has breached these basic fiduciary responsibilities.

Alexander Hamilton wrote in Federalist No. 65 that the power to impeach a civil servant would protect the public against “the abuse or violation of some public trust.” At nearly every turn, Koskinen both abused his power and violated the public’s trust in the IRS.

For years, the IRS abused its far-reaching power to systematically target groups based on their political views—a fundamental violation of American citizens’ First Amendment rights. 

In response to mass public outcry over this abuse of power, Congress called Lois Lerner, then-director of the IRS’s exempt-organizations unit, to explain her agency’s actions. Instead, she pled the Fifth Amendment.

Since the revelation that the IRS systematically targeted conservatives for years based on their beliefs, the agency—under Koskinen’s watch—has done virtually nothing to reform internal protocol to ensure that every Americans’ First Amendment rights are protected.

A Government Accountability Office report found that no significant measures have been implemented to ensure that civil servants at the IRS don’t unlawfully target Americans based on their political or religious views.

Congress has the duty to hold Commissioner Koskinen accountable for failing to live up to his obligations of service to the American people. As even President Obama has said, we must help restore confidence going forward.

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June 5, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, June 4, 2016

The IRS Scandal, Day 1122

IRS Logo 2Washington Examiner, IRS: White House Never Asked for Secret Information on Taxpayers:

The White House never requested any secret taxpayer information from the IRS, the tax agency said in a sworn statement filed with a federal court on Friday, hoping to put to rest lingering questions about whether political operatives tried to peek at confidential records.

IRS lawyer Sarah Tate said she searched all of the likely places where such requests would have been catalogued and concluded that the White House “has never requested or received return information of any taxpayer.” ...

[C]onservative groups had suspected a release had happened after a top White House economic official seemed to discuss the tax status of Koch Industries in 2010. They demanded the IRS disclose whether the White House had ever requested information about Koch or any other taxpayer.

The IRS’s inspector general conducted an investigation but refused to say what it found, so Cause of Action, a pressure group, filed an open-records request and eventually sued the IG and the IRS itself in 2012, demanding they release records.

A federal judge ruled that the IRS did have to search for any records, and the tax agency finally complied earlier this year, leading to Friday’s court filing.

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June 4, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Friday, June 3, 2016

The IRS Scandal, Day 1121

IRS Logo 2U.S. News & World Report:  The IRS Impeachment Farce: Republicans Are Just Scoring Political Points, Not Actually Trying to Improve the Tax Collecting Agency, by Pat Garofalo (Assistant Managing Editor, U.S. News & World Report):

For years now, House Republicans have been waging a seemingly endless crusade to bring the IRS to heel for, well, something or other.

Once upon a time, the foundation of the case against America's tax collecting agency was that it had allegedly singled out for undue scrutiny conservative groups that were applying for tax-exempt status. Any actual principles at stake, though, have long since been lost among a haze of accusations, subpoenas, faux hearings, contempt votes and, currently, an attempt to impeach IRS chief John Koskinen, who was not even an IRS employee at the time of the misdeeds Republicans are apparently so irate about.

There were assuredly some bad decisions made by the IRS back before the "targeting" issue broke, though the context at the time – a flood of applications from tea party-type organizations supposedly incensed at Obama-era policy, alongside more and more money pouring into the political system following the Supreme Court's Citizens United ruling – lends credence to the theory that the "targeting" was more about clunky attempts at efficiency than partisan politicking. If that episode had ended in something productive, though, then fair enough. The whole brouhaha might have done a bit of good.

But the GOP's current actions leave little doubt that, if there was ever an actual issue worth highlighting here, it has long since been eclipsed by electoral point-scoring at the expense of an arm of the government that's very easy to turn into a political punching bag.

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June 3, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (13)

Thursday, June 2, 2016

The IRS Scandal, Day 1120

IRS Logo 2Politico, How the GOP Effort to Oust IRS Chief Could Backfire, by Rachel Bade & Katy O'Donnell:

For over a year, House conservatives have been clamoring to remove IRS Commissioner John Koskinen. But now that the impeachment process is moving forward, they face a delicate decision: Are they willing to toss 200-plus years of precedent to bring him down?

If House conservatives press ahead with an impeachment of the embattled tax chief, they’d be voting to remove a relatively low-level executive-branch leader for one of the most minor offenses in American history, several impeachment experts told Politico. That decision could, effectively, lower the threshold for congressional punishment of an executive-branch authority from here on out — and ensure a wave of new proceedings against government officials who have tangled with Congress in the past.

Impeachment has typically been used to punish treason, bribery and other “high crimes” in the top echelons of government. But Koskinen’s impeachment — based on an argument that he failed to comply with a congressional subpoena — would effectively expand that definition to include gross incompetence.

It’s never been done before.

“Nobody has ever been impeached for what we’ll call ‘gross negligence.’ … It has never, in our entire history, despite all the partisan difference, been the basis for impeachment in the past,” said North Carolina School of Law professor Michael Gerhardt, an impeachment expert who has testified before Congress on the matter.

And that, experts say, could touch off a rash of impeachment proceedings, as Hill investigators line up to take on other agency heads who have crossed them. ...

[A]n impeachment of Koskinen, even just in the House, would be rare. Almost all the officials the House has acted against were judges. And two — Andrew Johnson and Bill Clinton — were presidents. Only once, 140 years ago, in 1876, did the House move to impeach an agency chief, Secretary of War William Belknap, on charges of corruption.

Even then, Belknap was an official Cabinet member, unlike Koskinen, and Congress’ historical-research arm suggests that there’s still an open question about whether Congress can impeach someone below the Cabinet level.

“A question which precedent has not thus far addressed is whether Congress may impeach and remove subordinate, non-Cabinet level executive branch officials,” reads a Congressional Research Service study on impeachment from last October. “Historical precedent provides no examples of the impeachment power being used against lower-level executive officials.”

Experts think the House can easily get around that argument to make the case that Koskinen may be impeached, even though impeaching an executive below the presidential level is unusual.

But outside experts say the actual case against Koskinen is relatively weak — and troubling as a precedent. The House Judiciary Committee is slated to debate the case in the coming days.

Republicans have two key arguments against Koskinen: that he failed to comply with a subpoena and misled Congress. On Koskinen’s watch, lower-level IRS employees deleted backup tapes that were central to a congressional investigation about the way conservative groups were treated at the IRS — well after Congress asked for them.

While some conservatives suspect a coverup, the best case they can argue against him is that Koskinen did not do the responsible thing in ensuring all his people understood top-level instructions that they were supposed to preserve those files.

He also failed to notify Congress about the issue for more than four months, something Oversight Chairman Jason Chaffetz (R-Utah) has argued amounts to lying. ...

[E]xperts still aren’t sure that gross mismanagement constitutes a “high crime.” Gerhardt said it could, but only if the House can prove some sort of ill will or bad intent on Koskinen’s part.

“If someone were acting in good faith and made a mistake … we don’t use impeachment for that. But if someone was deliberately trying to obstruct justice like, say [President] Richard Nixon, then we say, OK, that’s bad intent and bad misconduct, providing the right level for impeachment,” he said.

The problem, he continued, is that Congress has to prove ill will, and he’s not sure it can do that in Koskinen’s case.

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June 2, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Wednesday, June 1, 2016

The IRS Scandal, Day 1119

IRS Logo 2Des Moines Register editorial, Facts Fail to Support IRS Impeachment Effort:

The aphorism known as Hanlon’s razor dictates that one should never attribute to malice that which is adequately explained by stupidity.

Where some people see evil intent and conspiracies behind every misdeed, the more likely explanation is good old-fashioned incompetence. That's particularly true in Washington, D.C., where, despite the political machinations that seem to drive every decision, bureaucratic bungling is responsible for most of the federal government's sins.

Even so, some Republican leaders in the House believe IRS Commissioner John Koskinen has engaged in a long-running effort to deceive Congress and the public. As they see it, Koskinen should be impeached for his response to claims that the agency targeted conservative organizations that sought tax-exempt status. ...

The Justice Department investigated the matter for two years and ultimately concluded that there was no evidence that IRS officials had acted out of political bias in focusing on any organizations, conservative or otherwise.

Given all of that, the effort to impeach Koskinen appears to be a face-saving move by Chaffetz to justify his fruitless, six-year campaign to demonize the IRS for political bias.

Even Fred Goldberg, who served as IRS commissioner under the first President George Bush, says Chaffetz’s allegations are “preposterous” and calls the impeachment effort “way over the line.”

When it comes to abuse of power, Chaffetz has more to answer for than Koskinen.

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June 1, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (9)

Tuesday, May 31, 2016

NY Times:  In Secret Meeting At White House, IRS Officials Pressed On ObamaCare Subsidies

New York Times, In a Secret Meeting, Revelations on the Battle Over Health Care:

On Jan. 13, 2014, a team of Internal Revenue Service financial managers piled into government vans and headed to the Old Executive Office Building for what would turn out to be a very unusual meeting.

Upon arrival, the I.R.S. officials, some of whom had expressed doubts that the Obama administration had the proper authority to spend billions of dollars on a crucial element of its health care law, were ushered into a conference room.

There, they were presented with an Office of Management and Budget memo laying out the administration’s justification for spending $3.9 billion on consumer health insurance subsidies. They were told they could read it but could not take notes or make copies. The O.M.B. officials left the room to allow their visitors a moment to absorb the document, and then returned to answer a few questions and note that Attorney General Eric H. Holder Jr. had been briefed and signed off on the legal rationale.

“It was not a common practice in my 10 years in government at the three agencies where I worked,” said David Fisher, a former I.R.S. financial risk officer, recounting the odd meeting during a deposition on May 11 conducted by investigators for the House Ways and Means Committee.

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May 31, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

NY Times:  IRS Ruling Is Obstacle To Health Care Networks Promoted By Obama

New York Times, I.R.S. Ruling Is Obstacle to Health Care Networks Promoted by Obama:

A ruling by the Internal Revenue Service creates a significant obstacle to a new type of health care network that the Obama administration has promoted as a way to provide better care at lower cost, industry lawyers and providers say.

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May 31, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

The IRS Scandal, Day 1118

IRS Logo 2Wall Street Journal op-ed:  Clinton Embodies Washington’s Decadence, by Peggy Noonan:

She breaks the rules and gets away with it every time. No wonder voters are fed up. ...

The lack of backlash against Mr. Trump’s attacks on Mrs. Clinton, though, I suspect is due to something else. It’s that the subject matter really comes down to one word: decadence. People right now will respect a political leader who will name and define what they themselves see as the utter decadence of Washington. ...

[T]he real decadence Americans see when they look at Washington is an utterly decadent system. Just one famous example from the past few years: 

A high official in the IRS named Lois Lerner targets those she finds politically hateful. IRS officials are in the White House a lot, which oddly enough finds the same people hateful. News of the IRS targeting is about to break because an inspector general is on the case, so Ms. Lerner plants a question at a conference, answers with a rehearsed lie, tries to pin the scandal on workers in a cubicle farm in Cincinnati, lies some more, gets called into Congress, takes the Fifth—and then retires with full pension and benefits, bonuses intact. Taxpayers will be footing the bill for years for the woman who in some cases targeted them, and blew up the reputation of the IRS.

Why wouldn’t Americans think the system is rigged?

This is Washington in our era: a place not so much of personal as of civic decadence, where the Lois Lerner always gets away with it.

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May 31, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, May 30, 2016

The IRS Scandal, Day 1117

IRS Logo 2Congressional Research Service, Impeachment and Removal (R44260):

The impeachment process provides a mechanism for removal of the President, Vice President, and other “civil Officers of the United States” found to have engaged in “treason, bribery, or other high crimes and misdemeanors.” The Constitution places the responsibility and authority to determine whether to impeach an individual in the hands of the House of Representatives. Should a simple majority of the House approve articles of impeachment specifying the grounds upon which the impeachment is based, the matter is then presented to the Senate, to which the Constitution provides the sole power to try an impeachment. A conviction on any one of the articles of impeachment requires the support of a two-thirds majority of the Senators present.

Should a conviction occur, the Senate retains limited authority to determine the appropriate punishment. Under the Constitution, the penalty for conviction on an impeachable offense is limited to either removal from office, or removal and prohibition against holding any future offices of “honor, Trust or Profit under the United States.” Although removal from office would appear to flow automatically from conviction on an article of impeachment, a separate vote is necessary should the Senate deem it appropriate to disqualify the individual convicted from holding future federal offices of public trust. Approval of such a measure requires only the support of a simple majority.

Key Takeaways of This Report

  • The Constitution gives Congress the authority to impeach and remove the President, Vice President, and other federal “civil officers” upon a determination that such officers have engaged in treason, bribery, or other high crimes and misdemeanors.
  • A simple majority of the House is necessary to approve articles of impeachment.
  • If the Senate, by vote of a two-thirds majority, convicts the official on any article of impeachment, the result is removal from office and, at the Senate’s discretion, disqualification from holding future office.
  • The Constitution does not articulate who qualifies as a “civil officer.” Most impeachments have applied to federal judges. With regard to the executive branch, lesser functionaries—such as federal employees who belong to the civil service, do not exercise “significant authority,” and are not appointed by the President or an agency head—do not appear to be subject to impeachment. At the opposite end of the spectrum, it would appear that any official who qualifies as a principal officer, including a head of an agency such as a Secretary, Administrator, or Commissioner, is likely subject to impeachment.
  • Impeachable conduct does not appear to be limited to criminal behavior. Congress has identified three general types of conduct that constitute grounds for impeachment, although these categories should not be understood as exhaustive: (1) improperly exceeding or abusing the powers of the office; (2) behavior incompatible with the function and purpose of the office; and (3) misusing the office for an improper purpose or for personal gain.
  • The House has impeached 19 individuals: 15 federal judges, one Senator, one Cabinet member, and two Presidents. The Senate has conducted 16 full impeachment trials. Of these, eight individuals—all federal judges—were convicted by the Senate.

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May 30, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Sunday, May 29, 2016

The IRS Scandal, Day 1116

IRS Logo 2Bloomberg BNA, Conservative Group's IRS Targeting Claim Can Move Forward:

A conservative organization arguing the IRS targeted its application for tax-exempt status based on its political views demonstrated that its claim of unconstitutional targeting has merit, and can continue in federal district court.

The U.S. District Court for the Northern District of Texas on May 25 rejected the government's motion to dismiss Freedom Path Inc.'s First Amendment claim that the Internal Revenue Service subjected the group's applications for tax-exempt status to higher scrutiny, flagging groups that had “conservative sounding names.”

Freedom Path v. Lois Lerner, No. 3:14-CV-1537-D (N.D. TX May 25, 2016):

Freedom Path alleges that the federal defendants have denied its rights guaranteed by the First Amendment by targeting its application for tax-exemption and subjecting it to heightened scrutiny because of Freedom Path’s conservative viewpoint. Freedom Path points to the federal defendants’ “policy and practice of submitting [to Freedom Path] the unconstitutionally and overly intrusive requests for information” that caused an unreasonable delay in the determination of Freedom Path’s tax-exempt status.

The federal defendants contend that the conduct complained of in count IV has been remedied, and that Freedom Path’s claims are therefore moot. According to the federal defendants, the IRS no longer engages in heightened scrutiny nor issues improper requests for information. ...

Freedom Path complains that its application for tax-exemption has been unconstitutionally targeted and subjected to heightened scrutiny. Freedom Path also alleges that the IRS sent it inappropriate and unconstitutional requests for information.

Although the federal defendants have adduced some evidence that the IRS no longer uses BOLO lists and that the IRS has made efforts to train its employees on how to issue proper information requests, Freedom Path has demonstrated that its general complaints of unconstitutional targeting, heightened scrutiny, and improper requests for information still present a live controversy.

The cases on which the federal defendants rely—True the Vote and Linchpins of Liberty—were decided under distinguishable facts. In True the Vote the court held that the plaintiff’s allegations of unconstitutional targeting and heightened scrutiny were moot because the IRS had granted the plaintiff tax-exempt status.  Accordingly, the plaintiff’s injury claim was moot. ... In Linchpins of Liberty the plaintiff specifically complained of the use of BOLO lists, but it also alleged that the IRS was no longer using the lists. The termination of the complained-of conduct (the use of BOLO lists) therefore rendered the claim moot. In contrast, Freedom Path’s allegations in count IV are not limited to the use of BOLO lists, it has not pleaded that the BOLO lists are no longer in use, and its application for tax-exempt status has not been granted. The allegations of count IV are not moot. ...

The federal defendants contend that Freedom Path lacks constitutional standing, which requires that a litigant establish three elements: (1) an injury-in-fact that is concrete and actual or imminent, not hypothetical; (2) a fairly traceable causal link between the injury and the defendants’ actions; and (3) that the injury will likely be redressed by a favorable decision. ... The federal defendants maintain that Freedom Path lacks standing to bring the claims asserted in counts IV, VI, VII, and VIII because it has not alleged impending, future injury that is real and immediate rather than conjectural or hypothetical. ...

Freedom Path responds that it primarily complains of injury from the “multi-pronged offensive” and “larger pattern” of viewpoint discrimination in the application of Revenue Ruling 2004-6. It cites Z Street, Inc. v. Koskinen, 44 F.Supp.3d 48 (D.D.C. 2014), aff’d, 791 F.3d 24 (D.C. Cir. June 19, 2015), to demonstrate that it has no other recourse against defendants for their illegal scheme. ... Freedom Path alleges that while it awaits the determination of its tax-exempt status, it must “continue curtailing similar speech [to the Leader advertisement] in the future.” ...

Freedom Path has sufficiently pleaded future harm to establish injury in fact. ... It alleges that it will curtail its publication of advertisements similar to the Leader advertisement and that it has ceased raising funds and undertaking advocacy work because of uncertainty about how the IRS will apply Revenue Ruling 2004-6. The court denies the federal defendants’ motion to dismiss counts IV, VI, VII, and VIII based on alleged lack of standing.

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May 29, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, May 28, 2016

The IRS Scandal, Day 1115

IRS Logo 2Roll Call op-ed:  Impeachment of IRS Chief Is a Serious Misstep, by Stephen M. Ryan (McDermott Will & Emery, Washington, D.C.):

On November 9, 2017, well into the Clinton or Trump Administration, IRS Commissioner John Koskinen’s term will expire. Koskinen, like FBI Director James Comey, is a Senate-confirmed executive who has a term of office making him independent of the president’s term. Koskinen will be lauded at that time as a man of integrity who not only kept the IRS on life support while under constant attack but who provided the necessary leadership and integrity to drive the agency forward to better serve taxpayers.

Impeachment of federal office holders is reserved for those who commit high crimes or misdemeanors. Unfortunately, the House of Representatives seems determined to have a go at Koskinen for reasons that are political and unworthy of impeachment. ... Koskinen is an exemplary public official. He should be getting an award for his service, not this type of attention. He has not done anything wrong personally. Impeachment in the absence of crimes or unethical behavior, none of which has occurred here, is a dangerous precedent that has not been part of the U.S. experience and could dissuade experienced, competent executives like Koskinen from accepting appointment to senior management positions within government. ...

In essence, the claim is he failed to respond to lawfully issued congressional subpoenas and engaged in “a pattern of deception” in statements pertaining to the IRS production of emails, and failed to act with competence in overseeing the investigation into IRS’s treatment of conservative groups. The proponents’ case that Koskinen committed high crimes and misdemeanors depends upon issues he did not control. But Koskinen wasn’t even at the IRS when the scandal occurred, and he certainly was not leading the search for documents to respond to congressional requests. Republican members of Congress are rightfully upset that IRS employees in West Virginia magnetically erased hundreds of backup tapes in March 2014, destroying some of former IRS official Lois Lerner’s emails. While IRS recycling the backup tapes was dumb as a bag of hammers, Koskinen did not engage in that activity.

Can these alleged transgressions by the IRS be attributed to the new commissioner or rise to the level of an impeachable offense by him or contempt of Congress? Clearly, the answer is no. ...

Koskinen is what he appears to be — an exemplary public servant who heads an agency in disarray; while his 76-year-old peers are fishing or golfing. People with Koskinen’s skill-set are incredibly hard to find in public service. One can only hope that this impeachment resolution — and the personal nature of its assertions — won’t cause others to turn away from public service, depriving the government of the seasoned, competent executives that it desperately needs.

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May 28, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Friday, May 27, 2016

The IRS Scandal, Day 1114

IRS Logo 2Wall Street Journal editorial, Instant Document Destruction at the IRS:

Has the Internal Revenue Service been systematically evading federal record-keeping laws? On Monday the Cause of Action Institute sued the IRS and commissioner John Koskinen for refusing to preserve electronic employee communications that concern official business.

Cause of Action says that in 2010 the IRS struck a little-noticed agreement with the National Treasury Employees Union not to record employees’ instant messages. The watchdog group also says that in response to its Freedom of Information Act requests for text messages sent by senior IRS officials, the agency replied that due to “routine system housekeeping” and “spacing constraints,” IRS text messages are retained for only 14 days before they are deleted.

Both actions appear to violate the Federal Records Act that requires agencies to preserve all relevant documents. The agency says it retains emails, at least those that don’t disappear in mysterious computer crashes. But if employees can send text messages and not save them, they can avoid records retention. “No agreement with a union or any other party can supersede Americans’ right to know how the IRS makes decisions,” says Cause of Action. “In addition, the IRS is violating the law by regularly deleting all employee text messages as a matter of convenience.”

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May 27, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, May 26, 2016

The IRS Scandal, Day 1113

IRS Logo 2New York Post editorial, The IRS Boss Is Just Begging To Be Impeached:

Four years after the IRS hobbled conservative groups by targeting them for extra scrutiny, the agency’s still playing politics.

No wonder Congress is looking to impeach its boss, John Koskinen.

At a House Judiciary Committee hearing Tuesday, Republican lawmakers gave specific reasons for their move: his lies under oath, his flouting of a congressional subpoena — and his repeated defiance.

Koskinen’s response? Ha! He didn’t even bother to show up.

Koskinen was supposed to “fix” the IRS after the scandal erupted over targeting conservatives. Yet his real purpose seemed to be running interference, covering up information and shielding the agency (and Team Obama) from consequences.

Shockingly, he and his agency are continuing that pattern to this day: A lawsuit filed Monday by the Cause of Action Institute accuses the IRS and its boss of refusing to preserve official business electronic communications, as required by law.

Bloomberg View editorial, Impeaching IRS Director A Sham:

Pity John Koskinen, who agreed to take one of the worst jobs in America and is now being punished for it.

In 2013, President Barack Obama asked Koskinen to take over at the Internal Revenue Service amid budgetary chaos, deteriorating morale and a simmering scandal. House Republicans, still angry about that scandal -- and about the concept of taxation generally -- are now trying to impeach him.

Their case is weak, and the ultimate loser in this sorry spectacle won't be Koskinen.

Start with the scandal. An inspector general report in 2013 found that IRS employees had been improperly scrutinizing conservative groups seeking tax-exempt status. This was wrong, and blame was duly apportioned. The agency's boss resigned, a top deputy retired, and the director of the offending unit was placed on leave and declared in contempt of Congress. Half a dozen congressional committees vowed to fumigate every pixel of offending detail. One managed to produce an 8,000-page report. The Justice Department investigated (and found no evidence of criminality).

But you have to get up pretty early in the morning to outfox the House Oversight and Government Reform Committee. Representative Jason Chaffetz of Utah, the committee's chairman, has made a professional specialty of berating civil servants. He appears to view Koskinen -- who, recall, joined the agency after this scandal -- as obstructing further investigation.

The specific allegations Chaffetz has adduced hardly add up to high crimes and misdemeanors. At worst, they portray mild bureaucratic ineptitude. And removing Koskinen from office stands no chance in legislative reality. Nothing's shaking on Shakedown Street, as they used to say.

Actually impeaching Koskinen -- a punishment not invoked against an executive-branch appointee since Ulysses S. Grant occupied the White House -- probably isn't the objective anyway. The point is to embarrass the IRS. And congressional Republicans have already done a fine job of that by slashing the agency's budget while helping to vastly expand its responsibilities, with predictably frustrating results.

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May 26, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Wednesday, May 25, 2016

The IRS Scandal, Day 1112

IRS Logo 2Washington Post, Republicans Detail Case Against IRS Chief in Hearing Democrats Call a Sham:

House Republicans on Tuesday reprised their probe into four-year-old missteps by the Internal Revenue Service, making a detailed case why Commissioner John Koskinen should be impeached in a colorful hearing that underscored conservatives’ suspicion of the agency.

The two-and-a-half hour hearing, on accusations that Koskinen lied under oath to lawmakers and flouted a congressional subpoena, also was a reminder of a bitterly divided Congress. Few Democrats showed up for the proceeding before the House Judiciary Committee, but those who did said Republicans were wasting taxpayers’ time and grandstanding on an old issue that would go nowhere.

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May 25, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, May 24, 2016

The IRS Scandal, Day 1111

IRS Logo 2The House Judiciary Committee holds a hearing today on Examining the Allegations of Misconduct Against IRS Commissioner John Koskinen, Part I:

At the hearing, members of the House Judiciary Committee will examine the findings of the House Oversight and Government Reform Committee’s investigation of IRS Commissioner Koskinen. The House Oversight and Government Reform Committee has investigated the targeting of conservative groups for several years and many of the Committee’s members have found that Commissioner Koskinen failed to comply with a congressional subpoena which resulted in destruction of key evidence, made false statements during his sworn congressional testimony, and did not notify Congress that Lois Lerner’s emails were missing.

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May 24, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Monday, May 23, 2016

The IRS Scandal, Day 1110

IRS Logo 2USA Today op-ed:  When Leaders Cheat, Followers ... Follow, by Glenn Reynolds (Tennessee):

The trust that underlies a law-abiding society is rotting away thanks to double-dealing in Washington.

The state is “a gang of thieves writ large,” economist Murray Rothbard is said to have remarked. I’ve always viewed that sort of comment with a bit of skepticism. But now I’m beginning to wonder.

I wonder more when I read things like this report from the Washington Examiner: “The CIA's inspector general is claiming it inadvertently destroyed its only copy of a classified, three-volume Senate report on torture, prompting a leading senator to ask for reassurance that it was in fact ‘an accident.’”

Here’s a hint: It very likely wasn’t.

Is that unfair? I mean, it could have been an accident, right? Yeah it could have been. But it wasn’t. Accidents like that just don’t happen — or, when they do, they’re generally not accidents. And it’s right for people who have custody of evidence to know that any convenient “accidents” will give rise to the presumption that they had something pretty awful to hide, and that they hid it.

But, of course, the CIA’s “accident” was only the latest in a long rash of “accidental” losses of incriminating information in this administration. The IRS — whose Tea Party-targeting scandal is now over 1,100 days old without anyone being charged or sent to jail — seems to have a habit of ”accidentally” destroying hard drives containing potentially incriminating evidence. It has done so in spite of court orders, in spite of Congressional inquiries and in spite of pretty much everyone’s belief that these “accidents” were actually the deliberate, illegal destruction of incriminating evidence to protect the guilty.

Then there’s Hillary’s email scandal, in which emails kept on a private unsecure server — presumably to avoid Freedom of Information Act disclosures — were deleted. Now emails from Hillary’s IT guy, who is believed to have set up the server, have gone poof.

“Destroy the evidence, and you’ve got it made,” said an old frozen dinner commercial. But now that appears to be the motto of the United States government.

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May 23, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Sunday, May 22, 2016

The IRS Scandal, Day 1109

IRS Logo 2The Maddow Blog:  Republicans Get Serious About Impeachment, But Not Obama’s, by Steve Benen:

Quick quiz: when was the last time the U.S. Congress actually impeached an appointed executive branch official? It was 1876 – 140 years ago – when the House impeached Ulysses S. Grant’s War Secretary, William Belknap, over corruption allegations.

Nearly a century and a half later, House Republicans appear eager to give Belknap some company. The Washington Post reported yesterday:

Rep. Jason Chaffetz (R-Utah) introduced a resolution on Wednesday to censure IRS Commissioner John Koskinen, raising the stakes in the GOP war against the tax collector days before a hearing on whether to impeach him.

The four-page resolution seeks Koskinen’s resignation or removal by President Obama and calls on the IRS chief to forfeit his federal pension.

Chaffetz, the far-right chairman of the House Oversight Committee, explained in a statement yesterday, “I view censure as a precursor to impeachment.” He added a few weeks ago, “My foremost goal is impeachment and I’m not letting go of it.”

No, of course not. That might be responsible.

By any sane metric, the idea of congressional impeachment against the IRS commissioner is bonkers. House Republicans are apparently still worked up about an IRS “scandal” that doesn’t exist, and though Koskinen wasn’t even at the agency at the time of the alleged wrongdoing, GOP lawmakers want to impeach him because they disapprove of his handling of the imaginary controversy. ...

[G]iven the fact that Koskinen hasn’t actually committed any impeachable offenses, it’s hard not to get the impression that many House Republicans want to impeach someone, anyone, just for the sake of being able to say they impeached someone. ...

I continue to believe much of this is borne of partisan frustration: Republican investigations into Benghazi and other manufactured “scandals,” including the IRS matter itself, have effectively evaporated into nothing. That’s deeply unsatisfying to GOP hardliners, who remain convinced there’s Obama administration wrongdoing lurking right around the corner, even if they can’t see it, find it, prove it, or substantiate it any way.

Unwilling to move on empty handed, impeaching the IRS chief will, if nothing else, make Republican lawmakers feel better about themselves.

But that doesn’t change the fact that this partisan tantrum is indefensible. Koskinen took on the job of improving the IRS out of a sense of duty – the president asked this veteran public official to tackle a thankless task, and Koskinen reluctantly agreed. For his trouble, Republicans want to impeach him, for reasons even they’ve struggled to explain.

It’s ridiculous, even by the low standards of this Congress.

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May 22, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Saturday, May 21, 2016

The IRS Scandal, Day 1108

IRS Logo 2Forbes:  IRS Commissioner's Smidgen Of Impeachment, by Robert W. Wood:

The House Judiciary Committee meets May 24, 2016 to consider IRS Commissioner John Koskinen. As Don Corleone said to the Heads of the Five Families, “How did things ever get so far?“ President Obama was less than convincing with his famous “not even a smidgen of corruption” remark about the IRS to Fox News in 2014. There were just some folks down at the IRS who were “confused” about how to implement the law governing tax-exempt groups. “Confused” sounded better than the one about the rogue IRS employees in Cincinnati. 

Now, House Oversight and Government Reform Committee Chairman Jason Chaffetz (R-UT) introduced House Resolution 737 to censure IRS Commissioner Koskinen. The resolution offers Congressional condemnation and disapproval for what it claims is the IRS Commissioner’s pattern of conduct. It says that is inconsistent with the trust and confidence placed in him as an Officer of the United States. The resolution formally censures Mr. Koskinen, urges his resignation or removal, and even requires him to forfeit all rights to his government pension and other federal benefits. ...

This has been a long battle. Indeed, Chairman Chaffetz and 51 members of Congress sent a letter to President Obama in July of 2015 calling for the IRS Commissioner’s removal. On October 27, 2015, Chairman Chaffetz introduced H.J. Res. 494  to begin proceedings to impeach Koskinen. Referred to the House Judiciary Committee, it currently has 69 co-sponsors. The Committee even released a video with a timeline of key events in the IRS targeting scandal.

House Republicans still want action. Some of the anti-IRS movement is arguably due to the seething animosity some Republicans still have over the targeting, and the way the IRS chief handled it. A raft of scandals involving the IRS, poor and even evasive responses to Congress, bungled approaches to security, and a seeming diffidence to the public and concerned legislators have not won the IRS any friends. For Republicans, the IRS Commissioner has been a lightning rod. ...

Despite all the hoopla, Commissioner Koskinen is still probably safe. In the meantime, Republicans have pushed to pass laws slashing IRS power. President Obama has said he will veto bills that cut back on IRS budgets or power. Supporters say that the goal of such laws is to help improve customer service, prevent fraud, and ensure taxpayer dollars are being spent appropriately.

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May 21, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, May 20, 2016

The IRS Scandal, Day 1107

IRS Logo 2Wall Street Journal:  The IRS’s Ugly Business as Usual: ‘How Much Has Really Changed?’ A Judge Asks. Answer: Not Much. The Scandal Goes On., by Kimberley A. Strassel:

Amid the drama that is today’s presidential race, serious subjects are getting short shrift. No one is happier about this than Barack Obama. And no agency within that president’s administration is more ecstatic than the Internal Revenue Service.

That tax authority’s targeting of conservative nonprofits ranks as one of the worst federal scandals in modern history. It is topped only by the outrage that no one has been held to account. Or perhaps by the news that the targeting continues to this day.

That detail became clear in an extraordinary recent court hearing, in front of a panel of judges for the D.C. Circuit Court of Appeals. The paired cases in the hearing were Linchpins of Liberty v. United States and True the Vote v. Internal Revenue Service. They involve several conservative nonprofits—there are 41 in Linchpin—that were, as they said, rounded up and “branded” by the IRS. The groups are still suffering harm, and they want justice.

A lower-court judge had blithely accepted the IRS’s claim that the targeting had stopped, that applications for nonprofit status had been approved, and that the matter was therefore moot.

The federal judges hearing the appeal, among them David B. Sentelle and Douglas H. Ginsburg, weren’t so easily rolled. In a series of probing questions the judges ascertained that at least two of the groups that are party to the lawsuit have still not received their nonprofit approvals. The judges determined that those two groups are 501(c)(4) social-welfare groups, which are subject to far less scrutiny than 501(c)(3) charities, yet are still being harassed by the IRS five years later. The judges were told that not only are the groups still on ice, but that their actions are still being “monitored” by the federal government.

As one lawyer for the plaintiffs noted, despite the IRS’s claim that it got rid of its infamous targeting lists, there is “absolutely no showing” that the agency has in fact stopped using the underlying “criteria” that originally “identified and targeted for mistreatment based on political views.”

The hearing also showed the degree to which the IRS has doubled down on its outrageous revisionist history, and its excuses. IRS lawyers again claimed that the whole targeting affair came down to bad “training” and bad “guidance.” They blew off a Government Accountability Office report that last year found the IRS still had procedures that would allow it to unfairly select organizations for examinations based on religious or political viewpoint. The lawyers’ argument: We wouldn’t do such a thing. Again. Trust us.

More incredibly, the IRS team claimed that the fault for some of the scandal rests with the conservative groups, for not pushing back hard enough during the targeting. In response to complaints that the groups had been forced to hand over confidential information (information the IRS now refuses to destroy), one agency lawyer retorted: “They didn’t have to give the information to the IRS if they thought it was inappropriate, they could have said so.” Really. ...

An IRS lawyer rolled out the defense used by former agency official Lois Lerner that the targeting was just the unfortunate use of “inappropriate” criteria, but Judge Sentelle reminded the lawyer of the IRS’s vindictiveness. He noted that on one occasion the IRS simply shelved the application of an organization that had sued it. The agency “came to Court not having done anything to eliminate” the problem, he said, so “It’s just hard to find the IRS to be an agency we can trust, isn’t it?”

Judge Sentelle said there is a “pretty good case” that “egregious violations of the Constitution” had been committed, and he dared an IRS lawyer to “stand there with a straight face” and say otherwise. Judge Ginsburg, who spent the hearing catching out the IRS’s conflicting statements, at one point simply asked: “How much has really changed?”

Answer: not much. It was good news, then, that the House Judiciary Committee recently announced it will hold two hearings to examine the conduct of IRS Commissioner John Koskinen in this matter. Donald Trump, as the presumptive GOP nominee, could do worse than to use his megaphone to draw attention to the hearings. The IRS scandal needs to remain a story.Answer: not much. It was good news, then, that the House Judiciary Committee recently announced it will hold two hearings to examine the conduct of IRS Commissioner John Koskinen in this matter. Donald Trump, as the presumptive GOP nominee, could do worse than to use his megaphone to draw attention to the hearings. The IRS scandal needs to remain a story.

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May 20, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, May 19, 2016

The IRS Scandal, Day 1106

IRS Logo 2H. Res. 737, 114th Cong., 2d Sess.:

RESOLUTION Condemning and censuring John A. Koskinen, the Commissioner of Internal Revenue. 

Whereas the Committee on Oversight and Government Reform issued a subpoena to John A. Koskinen, Commissioner, Internal Revenue Service, on February 14, 2014, which compelled him to produce, among other things, ‘‘all communications sent or received by Lois Lerner, from January 1, 2009, to August 2, 2013.’’;

Whereas on March 4, 2014, Internal Revenue Service employees in Martinsburg, West Virginia, magnetically erased 422 backup tapes, destroying as many as 24,000 of Lois Lerner’s emails responsive to the subpoena;

Whereas Commissioner Koskinen violated a congressional subpoena by failing to locate and preserve relevant records and by losing key pieces of evidence that were in the agency’s possession, and destroyed, on his watch;

Whereas Commissioner Koskinen betrayed the trust and confidence of the American people as an Officer of the United States;

Whereas Commissioner Koskinen failed to live up to the promise he made to the Senate Committee on Finance during his confirmation hearing to: ‘‘Be transparent about any problems we run into; and the public and certainly this committee will know about those problems as soon as we do.’’;

Whereas as early as February 2014, and no later than April 2014, Commissioner Koskinen was aware that a substantial portion of Lois Lerner’s emails were missing and could not be produced to Congress, but did not notify Congress of any problem until June 13, 2014, when he included the information on the fifth page of the third enclosure of a letter to the Senate Committee on Finance;

Whereas Commissioner Koskinen offered under oath a series of false and misleading statements utterly lacking in honesty and integrity;

Whereas on March 26, 2014, Commissioner Koskinen was asked during a hearing before the Committee on Oversight and Government Reform, ‘‘Sir, are you or are you not going to provide this committee all of Lois Lerner’s emails?’’ and he falsely answered, ‘‘Yes, we will do that.’’;

Whereas on June 20, 2014, Commissioner Koskinen testified falsely that ‘‘since the start of this investigation, every email has been preserved. Nothing has been lost. Nothing has been destroyed.’’;

Whereas on June 20, 2014, Commissioner Koskinen testified falsely that the Internal Revenue Service had ‘‘confirmed that backup tapes from 2011 no longer existed because they have been recycled, pursuant to the Internal Revenue Service normal policy’’ and that ‘‘confirmed means that somebody went back and looked and made sure that in fact any backup tapes that had existed had been recycled.’’;

Whereas on June 20, 2014, Commissioner Koskinen testified that the Internal Revenue Service had ‘‘gone to great lengths’’ to retrieve all of Lois Lerner’s emails, but in fact failed to search disaster backup tapes, Lois Lerner’s Blackberry, the email server, backup tapes for the email server, and Lois Lerner’s temporary replacement laptop, which the Treasury Inspector General for Tax Administration subsequently found to contain more than 1,000 of Lerner’s emails;

Whereas Commissioner Koskinen’s false statements delayed and otherwise interfered with congressional investigations into the Internal Revenue Service targeting of Americans based on their political affiliation; and

Whereas the aforementioned conduct of Commissioner Koskinen caused the House of Representatives to lose confidence in his ability to administer and supervise the execution and application of the internal revenue laws: Now, therefore, be it

Resolved, That—  (1) the House of Representatives does hereby 3 censure and condemn John A. Koskinen for a pat-tern of conduct while Commissioner of Internal Revenue that is incompatible with his duties and inconsistent with the trust and confidence placed in him as an officer of the United States; and

(2) it is the sense of the House of Representatives that John A. Koskinen, Commissioner of Internal Revenue, should— (A) immediately resign from office, and if he does not so resign, the President should remove him from office; and (B) be required to forfeit all rights to any annuity for which he is eligible under chapter 83 or chapter 84 of title 5, United States Code.

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May 19, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Wednesday, May 18, 2016

The IRS Scandal, Day 1105

IRS Logo 2Washington Post, Impeachment Hearings Are Latest Victory in Conservative War on IRS:

The House Judiciary Committee’s decision to hold hearings a week from today on whether to impeach IRS Commissioner John Koskinen is a victory for the chamber’s far-right caucus, still smarting over the agency’s treatment of conservative groups.

Over five years, House Republicans have slashed the IRS budget, passed bills banning employee bonuses and prohibiting employees fired for misconduct from getting rehired. The GOP has vowed to simplify the tax code, pounced on agency management failures and assailed customer service breakdowns caused by the budget cuts.

And last week, anti-IRS lawmakers persuaded previously hesitant House leaders to start the unusual process of removing the tax collector from office.

One of the biggest questions now is whether the 76-year-old tax commissioner will show up for the grilling. IRS officials said Monday they have made no decision on whether Koskinen will accept the Judiciary Committee’s invitation to appear May 24 and at a hearing in June.

Daily Kos, Republicans Move to Impeach Head of Government Agency for First Time Since 1876:

Suppose you hate taxes. And government. You could try to pass bills that cut taxes, scale back government … in short, do the things the extreme right Freedom Caucus says they want. Or you might simply make it impossible for the government to collect taxes by maneuvering to cripple the agency in charge, which is the approach conservatives radicals have actually taken.

The House Judiciary Committee’s decision to hold hearings a week from today on whether to impeach IRS Commissioner John Koskinen is a victory for the chamber’s far-right caucus, still smarting over the agency’s treatment of conservative groups.

The agency’s treatment of conservative groups. Which turned out to be pretty much the agency’s treatment of every sort of group. It was just that so many groups emerged from the tea party chaos, and so many of them blatantly did not know the difference between what was acceptable in a tax-exempt organization and what was not, that a high number of them became regulatory road kill.

But conservatives have never believed they have to play by the rules, and this scandal-that-wasn’t serves as sufficient pretext to carry on the teahad. ...

Oh, but do mark this down as a historic moment. It’s the first time anyone has tried to impeach the head of a government agency since the Grant administration. ... The real purpose of trying to impeach IRS Commissioner John Koskinen is to give the extremists in the GOP a distraction to talk about when they climb on the stage at rallies between now and November. The chances that they would actually remove Koskinen, who is set to leave in 2017 in any case, are somewhere between extremely slim and laughable. But he provides a demon to rail against. And his name isn’t Donald.

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May 18, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (8)

Tuesday, May 17, 2016

The IRS Scandal, Day 1104

IRS Logo 2Wall Street Journal editorial:  The IRS’s Donor Lists: Congress Should Keep the Names of Donors Out of Tax Returns:

Democratic Attorneys General in California and New York have been trying to get their hands on donor information in the tax returns of nonprofit groups. Their disclosure demands were recently shot down in a California federal court, but the better question may be why the IRS is even collecting the info.

Under the Tax Reform Act of 1969, 501(c) groups are required to file Form 990 Schedule B that lists the sources of donations of more than $5,000 in the previous calendar year. The lists are supposed to remain private, but this is the government we’re talking about. The National Organization for Marriage’s donor list leaked to the Human Rights Campaign in 2012, and the state of California recently posted some 1,400 Schedule Bs on Attorney General Kamala Harris’s public website, though they were quickly taken down.

Sloppy handling of data that includes home addresses threatens donors with potential harassment. In his April order in AFPF v. Harris, the case challenging Ms. Harris’s appeal to see unredacted donor information from nonprofits, federal Judge Manuel Real noted that the disclosures included donors for Planned Parenthood of California. “An investigator for the Attorney General,” Judge Real wrote, “admitted that ‘posting that kind of information publicly could be very damaging to Planned Parenthood.’”

That goes across the political spectrum, which may be why IRS head John Koskinen and Director of Exempt Organizations Tamera Ripperda have said even the IRS is debating whether the information is necessary for tax enforcement.

Meanwhile, Illinois Republican Peter Roskam’s bill to stop the IRS from collecting donor details of tax-exempt groups passed the Ways and Means Committee in late April. Progressive groups, such as Democracy 21 and Public Citizen, say Schedules Bs are important to protect against foreign donations to tax-exempt groups.

But dropping Schedule Bs wouldn’t change the law. There is no ban on foreign contributions to tax-exempt outfits—see the Clinton Foundation—but there is a blanket ban on foreign money being spent to influence U.S. elections. Audits can determine if foreign contributions are being channeled into politics. Lawbreakers trying to skirt election laws aren’t disclosing improper donations on tax returns in any case.

The real progressive interest in donor disclosure is to use the information as a political weapon. Leaked selectively, donor lists suppress the speech of political rivals. Mr. Roskam’s bill is worth moving to the House floor.

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May 17, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, May 16, 2016

The IRS Scandal, Day 1103

IRS Logo 2Wall Street Journal: Donald Trump’s Amazon Adventure, by Holman W. Jenkins, Jr.:

You might get some argument about exactly how illegal it is for politicians to use their law-enforcement powers to punish their political opponents.

But at least when Nixon sought to, he felt obliged to do so by secret memorandum. As keeper of the enemies list John Dean wrote, “This memorandum addresses the matter of how we can maximize the fact of our incumbency in dealing with persons known to be active in their opposition to our Administration; stated a bit more bluntly—how we can use the available federal machinery to screw our political enemies.”

As it happened, however, the IRS commissioner at the time, Donald Alexander, refused orders to carry out tax audits of the Nixon White House’s political enemies.

Today, nobody, not even his worst critics, expects to find a memo from President Obama instructing Lois Lerner at IRS to stonewall applications from conservative political groups for tax-exempt status.

His critics probably don’t even expect Mr. Obama to have muttered under his breath that such a thing would be desirable. Rather, Ms. Lerner, all on her own, seemingly decided as a loyal Democratic and ideological warrior that it would be a good thing to use her agency to hamper the president’s partisan antagonists. ...

Donald Trump, an innovator in all things, is now in the process of changing the rules in America with his threat to bring legal action against Amazon on antitrust grounds and, if we hear him correctly, on tax grounds as well.

Mr. Trump couldn’t have been clearer about his motivation. He complained about Washington Post reporters calling up and “asking ridiculous questions,” “all false stuff,” apparently related to Mr. Trump’s tax returns, which in defiance of all tradition he has refused to release, as well as Mr. Trump’s real-estate dealings.

Mr. Trump says the Post was purchased as “a toy” by Amazon founder Jeff Bezos (who bought the paper with his personal funds in 2013). Mr. Trump says the paper now is being used to attack Mr. Trump in order to protect Amazon’s alleged tax-dodging practices even though Amazon, after long resistance, has begun in recent years to collect state sales tax.

All this seems to arise because the Post, the dominant newspaper in the nation’s capital, has assigned reporters to investigate the business career of the candidate who champions his credibility to be president by referring to his business career. ...

Mr. Trump knows U.S. political culture well enough to know that gleefully, uninhibitedly threatening to use government’s law-enforcement powers to attack news reporters and political opponents just isn’t done.

Maybe he thinks he can get away with it. Maybe he’s trying to figure out how to disqualify himself for the presidency in a way that wouldn’t embarrass his fans or blow back on the business career that he always imagined he’d be returning to after the Republican convention at the latest. After all, one way to throw an election is to scare off donors (he needs about a billion dollars) by flaunting his inner Nixon.

Or maybe he really does want to be the American caudillo who flings American democratic and legal norms out the window and ushers in a new age of populist authoritarianism.

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May 16, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Sunday, May 15, 2016

The IRS Scandal, Day 1102

IRS Logo 2Erick Erickson, House GOP to Consider Impeaching IRS Commissioner. Trump Complicates Things.:

House Republicans are going to consider impeaching the IRS Commissioner, Commissioner John Koskinen. The IRS is accused of targeting conservative groups for harassment. Likewise, the IRS is accused of dragging its feet on giving non-profit status to conservative groups. Based on an inspector general investigation into the IRS and subsequent congressional hearings, the accusations appear legitimate.

Koskinen, as head of the IRS, has not seemed interested in actually dealing with the IRS’s stalling and apparent cover up as the investigations continued. He deserves to be impeached.

Donald Trump, however, neutralizes the GOP’s talking point on the IRS. Just the other day he threatened Jeff Bezos and Amazon, suggesting Trump would support internet taxation to hurt Amazon, among other things, because of the Washington Post’s investigative reporters looking into Trump.

If the GOP has a candidate who implies or directly suggests he might use the government against his opponents, it will be really hard for them to distinguish what the IRS did from what their own Presidential nominee wants to do.

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May 15, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Saturday, May 14, 2016

The IRS Scandal, Day 1101

IRS Logo 2Press Release, House Judiciary Committee to Examine Misconduct by IRS Commissioner:

The House Judiciary Committee today announced that it will hold two full committee hearings to examine misconduct by the Internal Revenue Service (IRS) Commissioner John Koskinen.

At the first hearing, which will take place on Tuesday, May 24 at 10:00 a.m., members of the House Judiciary Committee will hear from a witness panel presenting the findings of the House Oversight and Government Reform Committee’s investigation of IRS Commissioner Koskinen. The House Judiciary Committee will also invite IRS Commissioner Koskinen to testify. The House Oversight and Government Reform Committee has investigated the targeting of conservative groups for several years and many of the Committee’s members have found that Commissioner Koskinen failed to comply with a congressional subpoena which resulted in destruction of key evidence, made false statements during his sworn congressional testimony, and did not notify Congress that Lois Lerner’s emails were missing.

At the second hearing, which will take place in June, members of the House Judiciary Committee will invite outside experts to comment on the findings presented in the first hearing and whether further congressional action is warranted. Witnesses for both hearings will be announced at a later date.

House Judiciary Committee Chairman Bob Goodlatte (R-Va.) issued the statement below on the Committee’s upcoming hearings:

The fact that officials at the IRS wielded their power to target certain Americans for their political views is both outrageous and contrary to our nation’s values. Our government is supposed to work for all Americans, not for a particular partisan agenda. As a result of the IRS’ targeting, conservative groups were singled out across the nation, resulting in lengthy paperwork requirements, overly burdensome information requests, and lengthy, unwarranted delays in their applications.

Despite repeated congressional efforts to get to the bottom of this matter, Obama Administration officials, including the IRS Commissioner, have consistently undermined the investigation. Over the coming weeks, the House Judiciary Committee will closely examine Commissioner Koskinen’s misconduct and the implications of his actions.

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May 14, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, May 13, 2016

The IRS Scandal, Days 1001-1100

May 13, 2016 in IRS Scandal | Permalink | Comments (0)