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Sunday, May 10, 2015

The IRS Scandal, Day 731

IRS Logo 2National Review, America’s Politicized Tax Enforcement Is a Harbinger of Decline, by Victor Davis Hanson (Stanford University, Hoover Institution):

Why did Rome and Byzantium fall apart after centuries of success? What causes civilizations to collapse, from a dysfunctional fourth-century-B.C. Athens to contemporary bankrupt Greece?

The answer is usually not enemies at the gates, but the pathologies inside them.

What ruins societies is well known: too much consumption and not enough production, a debased currency, and endemic corruption.

Americans currently deal with all those symptoms. But two more fundamental causes for decline are even more frightening: an unwillingness to pay taxes and the end of the rule of law. ...

The Clinton Foundation is expected to refile its tax returns for 2010, 2011, and 2012 after failing to separate government grants from donations. If an average citizen tried to amend his taxes for such huge sums and from that long ago, he would probably be under indictment. News reports of undocumented donations from foreign governments caught the foundation underreporting its income. The well-connected Clinton clan apparently had assumed that their political status ensured them immunity. ...

Who will police the tax police?

Former IRS official Lois Lerner and her subordinates were found to have targeted conservative nonprofit groups for excessive federal scrutiny. While testifying before Congress, Lerner invoked her Fifth Amendment right against self-incrimination, and investigators later found that two years of her e-mails had gone missing in a mysterious computer crash. Lerner has not been charged. ...

Our laws are becoming as politicized as our tax system. ...  In the last six years, the enforcement of federal laws has depended on their apparent political utility.  ... Increasingly in the United States, the degree to which a law is enforced — or whether a person is indicted — depends on political considerations. But when citizens do not pay any income taxes, or choose not to pay taxes that they owe and expect impunity, a complex society unwinds.

And when the law has becomes negotiable, civilization utterly collapses.

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May 10, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, May 9, 2015

The IRS Scandal, Two Years And Counting

IRS Logo 2The American Spectator, Making Sense of the IRS Scandal: Is Sympathy for the Devil Still Possible?:

Two years ago this month, former IRS official Lois Lerner revealed that the agency had discriminated against scores of right-leaning nonprofits on the basis of their political beliefs. The public called for accountability and got something vaguely resembling it in the form of resignations, investigations, and congressional debates. But despite the flurry of activity, the underlying issues that contributed to the IRS scandal remain unresolved, and the agency is still firmly embroiled in the messy business of policing political speech.

It’s enough to make one wonder: two years later, have things really changed? Or could it happen again?

Starting in 2010, IRS agents were instructed to apply extra scrutiny to applications for nonprofit status from conservative and tea-party organizations, culminating in those applications being sent to a special office where they were subjected to lengthy delays and invasive questioning. This was the agency’s inept response to the Citizens United decision, which freed all organizations to speak about elections, so long as they do so independently of candidates and parties. Critics of the decision, including several U.S. Senators, pressured the IRS to do anything in its power to stop groups from exercising their newfound freedom. Lerner herself remarked to a Duke University panel that “everybody is screaming at [the IRS] right now.”

But the IRS is a revenue collection agency, not a campaign finance regulator, so it was hopelessly ill-equipped for the task. It failed to treat groups equally or fairly, instead singling out conservative and tea party groups for an incredible level of scrutiny. The IRS demanded the personal information of groups’ supporters, copies of minutes from board meetings, résumés of current and former individuals involved with the organization, and even past intern history, copies of social media postings, and print outs of every page of an organization’s website.

President Obama called the IRS’s conduct “outrageous” and promised “I will not tolerate it. And we will make sure that we find out exactly what happened.” Lerner and IRS Commissioner Steven T. Miller resigned, countless congressional hearings were held to rail against the violation of taxpayers’ First Amendment rights, and multiple investigations — some of which are still ongoing — commenced to shed bits of light on the matter. ...

Lois Lerner may be gone, but the IRS is still threating to infringe upon First Amendment rights. In the same vein, a new TIGTA report issued on April 30 praised the IRS for reducing its backload of applications and making some changes to its screening process, such as standardizing the questions asked of groups, but noted that the IRS still “does not have a clearly defined test for determining whether an organization’s request for exemption as a social welfare organization should be approved.”

Things might be a little better, but they’re still not good, and there’s nothing to stop the IRS from deciding to target groups again in the future. The failure to secure the rights of nonprofits in the aftermath of the scandal is a sobering reminder that passion for accountability is not enough. We also have to be wise, and address policy problems where they exist instead of merely searching for individuals to blame.

Disputes over the language of the 501(c)(4) statute, combined with a lack of clear guidance from the Federal Election Commission and gridlock in Congress, left the IRS to regulate in an area where it lacked sufficient expertise to act responsibly. The IRS deserves more than its fair share of rebuke for targeting groups with views it didn’t like, for being dishonest about its activities, and for responding to criticism by proposing even more restrictive regulations. But whether its errors were committed in good faith or not, whether they were catastrophic or mere blunders, the IRS simply should never have been put in position to make them.

As the agency works on its new proposal, it should rely on the feedback it received last time. That means recognizing that nonprofit advocacy groups have a valuable role to play in civic life, protecting that role, and clarifying the rules so that small and volunteer-run organizations can be assured their activities are legal and their supporters’ private information is secure.

That’s the best we can hope for, but it shouldn’t be up to the IRS to make these decisions. That job belongs to Congress. Clarifying the language of the 501(c)(4) statute to explicitly protect the political speech of nonprofit groups would finally chart a path forward out of this regulatory morass. It would be a blessing both to nonprofit groups and the IRS.

On the two-year anniversary of revelations of the IRS scandal, perhaps it is time to leave behind the search for a villain and instead solve the problem. Until advocacy nonprofits have their First Amendment rights secured, the threat of future targeting lingers, no matter who is in charge

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May 9, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Friday, May 8, 2015

The IRS Scandal, Day 729

IRS Logo 2Orange County Register editorial, Emails Keep IRS Scandal Probe Afloat:

John Koskinen has some ’splaining to do. Last June, Mr. Koskinen, the IRS commissioner, told Senate Finance Committee Chairman Ron Wyden and ranking member Orrin Hatch that a computer malfunction somehow zapped thousands of emails to and from Lois Lerner, the scandalized IRS official whose office targeted conservative groups for special scrutiny when applying for tax-exempt status.

Last week, those potentially incriminating emails were recovered – not because Mr. Koskinen was determined to get to the bottom of the IRS targeting scandal, but because of the diligence of J. Russell George, Treasury Inspector General for Tax Administration.

Mr. George is in the process of turning over some 6,400 emails to the Senate Finance Committee, which last year tasked the inspector general’s office with figuring out what emails had been lost, if someone at IRS intentionally destroyed them and if the emails could possibly be retrieved.

That seemed to us at the time a project Mr. Koskinen’s staff could have undertaken. Instead, it appeared that Mr. Koskinen – and, perhaps, Obama administration officials further up the food chain – were hoping the scandal would just fade away.

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May 8, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, May 7, 2015

The IRS Scandal, Day 728

IRS Logo 2Wall Street Journal editorial, The IRS Goes to Court:

The agency suggests it can discriminate for 270 days. Judges gasp.

It isn’t every day that judges on the D.C. Circuit Court of Appeals declare themselves “shocked.” But that happened on Monday when an animated three-judge panel eviscerated the IRS and Justice Department during oral argument in a case alleging the agency delayed the tax-exempt application of a pro-Israel group due to its policy views.

In December 2009, Pennsylvania-based Z Street applied for 501(c)(3) status to pursue its pro-Israel educational mission. In July 2010, when the group called to check on what was taking so long, an IRS agent said that auditors had been instructed to give special attention to groups connected with Israel, and that they had sent some of those applications to a special IRS unit for additional review.

Z Street sued the IRS for viewpoint discrimination (Z Street v. Koskinen), and in May 2014 a federal district judge rejected the IRS’s motion to dismiss. The IRS appealed, a maneuver that halted discovery that could prove to be highly embarrassing. Justice says Z Street’s case should be dismissed because the Anti-Injunction Act bars litigation about “the assessment or collection of tax.” Problem is, Z Street isn’t suing for its tax-exempt status. It’s suing on grounds that the IRS can’t discriminate based on point of view.

The three judges—Chief Judge Merrick Garland,David Tatel and David Sentelle—were incredulous. You say they want a tax exemption, but that’s not the complaint, Judge Sentelle admonished government lawyer Teresa McLaughlin: “They are not in court seeking to restrain the assessment or collection of a tax, they are in court seeking a constitutionally fair process.”

The suit should also be foreclosed, the government argued, because under Section 7428(b)(2) of the Internal Revenue Code groups may sue to obtain their tax-exempt status if no action has been taken for 270 days, and that should be an alternative to Z Street’s approach.

“You don’t really mean that, right? Because the next couple words would be the IRS is free to discriminate on the basis of viewpoint, religion, race [for 270 days]. You don’t actually think that?” Judge Garland said. “Imagine the IRS announces today a policy that says as follows: No application by a Jewish group or an African-American group will be considered until one day short of the period under the statute . . . Is it your view that that cannot be challenged?”

The judges also asked why the government had buried the key precedent in a footnote in its brief. In Direct Marketing Association v. Brohl, the Supreme Court decided that the language of the Anti-Injunction Act did not preclude cases like Z Street’s. In a previous case before the D.C. Circuit, Judge Garland noted, the court also “rejected” the exact arguments the government was making, “so in a way we have already decided every issue before us today, against you.” ...

The Beltway media may be bored, but the IRS scandal is a long way from over.

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May 7, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Wednesday, May 6, 2015

The IRS Scandal, Day 727

IRS Logo 2Fox News op-ed:  IRS Scandal: I Was Targeted and I've Got Proof it Was a Democratically-led Conspiracy, by Wayne Allyn Root:

I was targeted by the IRS in a coordinated attack at the highest levels of government...and we now have the proof.

My IRS files, obtained under the Freedom of Information Act by Judicial Watch, clearly implicate the IRS and a Democratic U.S. senator.

Per Tom Fitton, president of Judicial Watch: 

“The Obama IRS obstructed the release of Wayne Root’s tax documents. The abuse of process Judicial Watch and Wayne suffered through to get these documents is scandalous. Now we know why the Obama IRS was hesitant to give Wayne his own IRS files. These documents show the Obama IRS scandal was more than just suppressing the Tea Party, it was also about auditing critics of President Obama. Richard Nixon had to resign from office for less. The first order of business for AG Loretta Lynch should be to appoint a special counsel who can convene a grand jury to look into the Obama IRS outrages.”

As you’ll read below, the fingerprints of the Obama administration and the Democratic Party are all over my case. Until now, no one could prove the IRS was using politics as a basis for vicious attacks against critics of the president. That just changed.

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May 6, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, May 5, 2015

The IRS Scandal, Day 726

IRS Logo 2Press Release, Judicial Watch Files FOIA Lawsuit on Behalf of Alliance Defending Freedom on IRS Investigations into Churches and Religious Groups:

Alleges Internal Revenue Service is “unlawfully withholding records”

Judicial Watch announced it has filed a lawsuit in the U.S. District Court for the District of Columbia on behalf of the Alliance Defending Freedom (ADF) to obtain the release of documents regarding the Internal Revenue Service’s (IRS) recent decision, following a lawsuit by the Freedom from Religion Foundation, to reevaluate criteria for determining whether churches and other nonprofit organizations can claim tax-exempt status. The IRS also suggested that it may initiate investigations into church activities (Alliance Defending Freedom v. Internal Revenue Service (No. 1:15-cv-00525)). Alliance Defending Freedom is an alliance-building legal organization that advocates for the right of people to freely live out their faith.

Judicial Watch filed the lawsuit after the IRS failed to comply with ADF’s July 22, 2014, Freedom of Information Act (FOIA) request seeking release of the following documents:

  1. All documents related to any existing, proposed, new, or adopted procedures for church tax inquiries or examinations from January 2009 to the present.
  2. All documents related to proposed or adopted changes to Treasury Regulations §301.7611-1 from January 2009 to the present.
  3. All documents related to new IRS policies or procedures referenced in FFRF’s July 17, 2014 press release.

ADF filed the FOIA request after an announcement by the Freedom from Religion Foundation (FFRF) that, in settling a FFRF lawsuit, the IRS had promised to begin looking into specific churches and other groups for potential violations of tax law, and to reevaluate IRS’ criteria for when such evaluations should be executed.

The IRS stalled the release of records for months, most recently promising to produce records by March 31, 2015.

Judicial Watch’s filing states:

As of the date of this complaint, Defendant has failed to: (i) determine whether to comply with the request; (ii) notify Plaintiff of any such determination or the reasons therefor; (iii) advise Plaintiff of the right to appeal any adverse determination; and/or (iv) produce the requested records or otherwise demonstrate that the requested records are exempt from production.

Judicial Watch separately sued for documents about this alleged IRS abuse last year.

In 2012, the FFRF filed a lawsuit alleging that the IRS had routinely ignored its complaints about churches promoting political candidates, issues or proposed legislation. In its complaint, FFRF alleged that 1,500 clergy members violated electioneering restrictions on Sunday, October 7, 2012. The atheist group has specifically cited church teachings against abortion and same-sex marriage as being in violation of the law. It also cited what it termed “blatantly political” full-page ads running in the three Sundays leading up to the presidential elections by the Billy Graham Evangelical Association. But the FFRF abruptly dismissed its IRS lawsuit after a church, represented by the Becket Fund for Religious Liberty, intervened in the lawsuit to challenge the IRS’s alleged authority to “revoke a house of worship’s tax-exempt status, and levy fines against churches and individual leaders, when religious leaders are deemed to say things that the IRS does not allow.” Alliance Defending Freedom and other religious rights organizations have challenged directly the notion that the federal government can restrict the speech of pastors.

In July 2014, the IRS announced that, according to the terms of an agreement reached with the FFRF, it had been monitoring churches and other houses of worship for electioneering and other political activity. According to June 27, 2014, IRS letter to the Justice Department, the IRS has targeted 99 churches it said merited “high priority examination” for allegedly illegal electioneering activities. This church-targeting was determined by an IRS “Political Activities Referral Committee.”

The Wisconsin-based FFRF, which describes itself as “an effective state/church watchdog and voice for … atheism, agnosticism, skepticism,” trumpets the IRS agreement at issue as an “IRS Victory!” on its website homepage. Another victory touted on the atheist group’s homepage is a purported success entitled, “FFRF erases bible quotes from Mo. school’s whiteboard.”

“The IRS has no business threatening churches on behalf of the anti-religious crusaders at Freedom from Religion Foundation,” said ADF Litigation Counsel Christiana Holcomb. “The IRS must come clean, be accountable to the American people, and reveal the details of the secret deal it cut with the atheist group. The IRS pattern of unlawfully using its power to target and punish ideological opponents and hiding information that Americans have a right to know must end immediately.”

“It is an honor for Judicial Watch to represent Alliance Defending Freedom, which is so effective as a protector of the First Amendment, which recognizes the truth of God-given rights of Americans to both freely exercise their religion and participate in politics,” said Judicial Watch President Tom Fitton. “The IRS is using a lot of energy to cover-up details of its illicit targeting of churches. Violating FOIA law comes at great taxpayer expense.”

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May 5, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, May 4, 2015

The IRS Scandal, Day 725

IRS Logo 2Robert W. Wood (Forbes), IRS Approved Clinton Foundation And Scientology, But Targeted Tea Party:

Will there be an IRS investigation of the Clinton Foundation? Even suggesting it sounds laughable, for few can stand up to the Clintons, let alone to a Democratic administration. Besides, the IRS Exempt Organizations Division used to be run by Lois Lerner, and it isn’t clear how much has changed. In fact, we may never get to the bottom of the Tea Party targeting scandal. It almost looks as though the IRS will attack conservative groups but is silent on the Clinton Foundation. Heck, even Scientology got its IRS church status.

When it was revealed in 2013 that the IRS targeted conservative groups, the IRS Commissioner had to resign, but that was about it. Lois Lerner was at the center of the scandal but didn’t suffer any consequences. In fact, she got $129,000 in cash bonuses and retired with a full government pension. She evidently did a good job targeting at the Federal Election Commission, and then she moved over seamlessly to the IRS to do the same. Ms. Lerner is now out of the prosecutor’s eye with no criminal charges, nice bonuses, and a nice retirement. When she broke her silence to Politico, she said she did nothing wrong, claiming that she was the victim.

Given Mrs. Clinton’s email proclivities,Mrs. Clinton’s emails are even harder to find than Lois Lerner’s. And the Treasury Inspector General has just found 6,400 missing Lois Lerner emails. We surely will not see the IRS looking at the enormously wealthy Clinton Foundation, even though several watchdog groups suggest there’s something fishy there. First is the politics, since the tracking of who gives money and who needs something from Hillary’s State Department tracks closely.

In fact, a whopping 181 donors lobbied the State Department while Mrs. Clinton was there. Coincidence? Even apart from the political pay-for-play fears we may have, just look at the numbers. Charity Navigator says that the Clinton Foundation took in nearly $140 million in donations from individuals and groups. Boy, that must do a lot of good works, right?

Not so fast. It turns out that only approximately $9 million was paid out in direct aid. More than $130 million went to so-called ‘administrative and other expenses.’ Even if that is entirely on the up and up, it sure looks bad. If Clinton family members or friends end up with much of it, there could be a private inurement problem. Charities are supposed to benefit charitable goals, not line private pockets. ...

Perhaps there are undeleted emails about this on that private email server. The Foundation downplays the errors, noting that the money was included in the overall revenue figures reported to the IRS. Maybe, but the amendments are awkward, highlighting the Foundation’s continued receipt of foreign money while Hillary Clinton was Secretary of State. Besides, sometimes the IRS views amended tax returns as too little, too late. Lucky for Mrs. Clinton, as President Obama told Fox News, there is ’not even a smidgen of corruption’ at the IRS.

Even thinking the best of all of this, the Clinton Foundation’s administrative costs seem awfully high. Of course, we now know that the Bill, Hillary and Chelsea Clinton Foundation will be amending multiple years of tax returns. Upon becoming Secretary of State, Mrs. Clinton promised that the Foundation would stop accepting donations from foreign governments. It turns out there were exceptions, and that the Foundation’s tax filings with the IRS were less than transparent.

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May 4, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Sunday, May 3, 2015

The IRS Scandal, Day 724

IRS Logo 2Robert W. Wood (Forbes), IRS $20 Million Response To Latest Pile of Lois Lerner Emails Is Worrisome:

Lois Lerner’s latest lost and found hoard of 6,400 newly discovered emails may end up not showing much. The IRS didn’t find them. A watchdog did. Maybe they will underscore the targeting and Ms. Lerner’s political chops honed at the Federal Election Commission. But at least the Treasury Inspector General found the 6,400 additional emails. A little more than 10% (650) are tied to 2010 and 2011. The rest date to 2012.

But the IRS statement in response to this latest revelation is, well, a little disturbing:

We welcome the Inspector General’s recovery of these Lois Lerner emails. This is an encouraging development that will help resolve remaining questions and dispel uncertainty surrounding the emails.

The IRS has been committed to cooperating fully with the investigations. We understand that, during the course of the past 10 months, the Inspector General found about 650 emails from the period affected by the hard-drive crash. It’s important to note that last summer, the IRS produced 24,000 emails from that period.

The IRS will continue to cooperate with the Inspector General and the congressional committees to complete work in this area, and we look forward to the results to determine what additional steps the IRS can take to ensure that we continue to improve our processes.

It’s important to note that the IRS has produced to Congress more than 1.3 million pages of documents related to the investigation, including more than 147,000 emails. Total estimated cost of just the IRS portion is at least $20 million.

The IRS has not exactly seamlessly cooperated, and Mr. Koskinen who runs the IRS has had a prickly relationship with investigators and with Congress. He has sometimes appeared to be annoyed that he is being asked any questions at all. Of course, the IRS said in 2014 (a little late?) that Ms. Lerner’s computer crashed in 2011.

Oops, no one’s fault that we lost a few years worth of emails. We kept being reminded how hard the IRS looked and how terribly expensive it was that the IRS had to do this. Yet the inspector general found about 35,000 emails from recycled back-up tapes. It then turned out that the key IRS IT people weren’t even asked to look at back up tapes. Isn’t this a little insulting? ...

A spokesman for Senate Finance Committee Chairman Orrin Hatch (R-Utah) said the committee hopes the new emails will bring the panel closer to releasing the findings of its IRS investigation. Wouldn’t some answers be nice?

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May 3, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Saturday, May 2, 2015

The IRS Scandal, Day 723

Friday, May 1, 2015

The IRS Scandal, Day 722

IRS Logo 2Treasury Inspector General for Tax Administration, Status of Actions Taken to Improve the Processing of Tax‑Exempt Applications Involving Political Campaign Intervention:

In a prior audit, TIGTA found that ineffective management resulted in 1) inappropriate criteria being used to identify for review organizations applying for tax-exempt status based on names and policy positions instead of indications of political campaign intervention, 2) substantially delayed processing of certain applications, and 3) unnecessary information requests being issued.  Recommendations from the prior audit were made to help ensure that applications for tax-exempt status are processed in a fair, impartial, and timely manner.

The overall objective of this audit was to assess the IRS’s actions in response to TIGTA’s recommendations to improve the identification and processing of applications for tax-exempt status involving political campaign intervention.

The IRS has taken significant actions to eliminate the selection of potential political cases based on names and policy positions, expedite processing of Internal Revenue Code (I.R.C.) Section (§) 501(c)(4) social welfare organization applications, and eliminate unnecessary information requests. 

First, the IRS eliminated the use of Be On the Look Out (BOLO) listings, which TIGTA determined had contained inappropriate criteria regarding political advocacy cases.  TIGTA conducted interviews with a random sample of employees, who confirmed that BOLOs or similar listings were no longer being used.

Second, the Exempt Organizations function completed processing for 149 of the 160 applications for tax-exempt status that, as of December 2012, had been open for lengthy periods.  To expedite processing of I.R.C. § 501(c)(4) social welfare applications, the IRS developed an optional expedited self-certification process.  This expedited process is not available to other types of organizations, e.g., labor organizations and business leagues, with similar political campaign intervention limitations. 

Third, the IRS has developed preapproved questions and has instituted a quality review process to provide better assurance that unnecessary information requests are not sent to applicants. 

The Department of the Treasury is revising draft guidance to address how to measure the “primary activity” of social welfare organizations.  Until this guidance is finalized, the IRS does not have a clearly defined test for determining whether an organization’s request for exemption as a social welfare organization should be approved.  As a result, for those applicants not choosing the optional expedited process, the IRS continues to use a subjective facts and circumstances process.

Bloomberg, IRS May Be Trying to Stop Tax Exemption of Karl Rove’s Crossroads GPS:

The IRS may be trying to block the tax exemption of one of the largest politically active nonprofit groups, Crossroads Grassroots Policy Strategies, an organization founded by Republican strategist Karl Rove.

The oblique disclosure can be found between the lines of an inspector general’s report released on Thursday, which said that 149 of 160 cases that had been stalled have been resolved. Of the other 11, six are in litigation with the IRS -- which Crossroads isn’t -- and the other five have received proposed denial letters or are appealing.

That suggests that the Internal Revenue Service has sent Crossroads a denial letter. Crossroads is one of the most politically involved nonprofit groups, and its bid for tax exemption is being closely watched by campaign-finance lawyers. ...

Crossroads applied for its tax exemption in September 2010.

Documents previously released by the House Ways and Means Committee showed that the IRS was drafting a denial letter to Crossroads in 2013, just before news broke of the controversy of the agency’s treatment of conservative groups.

Those documents list Crossroads among Tea Party groups that were being held up by the IRS and show that Lerner, the former IRS director of exempt organizations, was directly involved in asking about the group’s application.

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May 1, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, April 30, 2015

The IRS Scandal, Day 721

Wednesday, April 29, 2015

The IRS Scandal, Day 720

IRS Logo 2Press Release, Statement By Senator John McCain on False Reports on IRS Targeting:

A recent press release by Judicial Watch sparked a series of online reports falsely claiming that my office was somehow involved in the IRS’s targeting of conservative groups – reports that are demonstrably untrue and totally contradicted by my all of my actions over the past several years on this issue.

“These reports ignore the fact that I released a 37-page dissenting report last September refuting the Democrats’ Majority Permanent Subcommittee on Investigations (PSI) report claiming the IRS showed no bias against conservative groups. Media coverage at the time noted that I was in total disagreement with Senate Democrats on the issue of whether the IRS targeted conservative groups. ...

Like so many Americans, I was shocked and appalled by revelations that the IRS inappropriately singled out conservative groups for scrutiny, and that our tax system was used to target political opponents. “As Ranking Member of the Senate’s Permanent Subcommittee on Investigations, I devoted significant time and resources to help get to the bottom of this disturbing abuse of power by the IRS. Any article suggesting otherwise is simply wrong, and ignores the facts of my actions over the last several years.

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April 29, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, April 28, 2015

The IRS Scandal, Day 719

IRS Logo 2Examiner, IRS Attacks Conservative Groups But Silent on Clinton Foundation:

In the midst of the news media coverage of the Hillary Clinton emails, her private Internet server, her thumbing her nose at government regulations and allegations that her and her husband's "charity" was involved in shady deals, no one except for public-interest groups is asking about an IRS investigation. There are several allegations that the Clinton Foundation is nothing more than a sophisticated and elaborate political slush fund, according to news stories on Monday.

More than one group that was targeted by the IRS for daring to be conservative believes that if there ever was an organization that should be investigated and audited by the IRS it's the Clinton Foundation. The Clintons possess a talent for making incriminating documents disappear and Americans are warned to not hold their breath waiting for the IRS or the Justice Department investigate the Clintons and their arguably corrupt foundation.

However, the Clintons' home state of Arkansas has a young attorney general who does possesses the authority to launch a criminal investigation because the foundation claims the state of Arkansas as its headquarters. Attorney General Leslie Rutledge will likely be trashed by the Clinton machine

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April 28, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Monday, April 27, 2015

The IRS Scandal, Day 718

IRS Logo 2Breitbart, GOP Sen. Presses Obama Administration On Criminal Probe Of IRS Targeting of Conservatives:

On Tax Day, Senate Judiciary Committee Chairman Chuck Grassley (R-IA) pressed the Obama administration for an update on the criminal investigation into the alleged misconduct of IRS personnel in the handling of conservative organizations’ tax exempt status.

“It’s unclear whether all of these cases are open or closed,” Grassley said Wednesday. “The investigative agencies should account for their work. The scandal damaged the public trust in the IRS. Building back any of that trust requires investigation and accountability for any misconduct.”

In a letter to the Acting Deputy Attorney General Sally Quillian Yates and the Treasury Inspector General for Tax Administration J. Russell George, the Iowa lawmaker requested more information about the investigation — or lack thereof.

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April 27, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Sunday, April 26, 2015

The IRS Scandal, Day 717

IRS Logo 2Pittsburgh Tribune-Review, The Gathering Storm: An IRS Defeat:

Attempting to obscure the extent of its alleged targeting of conservative groups, the Internal Revenue Service has been smacked with a serious setback in its court fight in Ohio.

A federal judge granted a motion compelling the IRS to list the 298 targeted organizations, which the IRS had identified for the Treasury Department inspector general. In a lawsuit filed in 2013, 10 conservative groups, through discovery, have been trying to pry free the list of all groups targeted by the IRS. This, in order to seek class certification and expand the lawsuit to "all the organizations on (ex-IRS official) Lois Lerner's hit list," writes Hans von Spakovsky of The Heritage Foundation. ...

The discernible rumbling of distant thunder portends the gathering storm that is going to rain down on the IRS.

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April 26, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Saturday, April 25, 2015

The IRS Scandal, Day 716

IRS Logo 2Forbes, IRS Forced To Release Names Of Targeted Groups, by Peter J. Reilly:

So we had another Tea Party decision on April 1 of all days. NorCal Tea Party Patriots is one of the ten organizations in a lawsuit against the IRS because of delays and intrusive scrutiny while they were applying for exempt status.  They want it to be a class action suit, but they need information from the IRS to determine what organizations should be in the class. ...

The IRS argued that it could not make those disclosures, because they would be in violation of Code Section 6103 which protects the confidentiality of returns and return information.  The judge went with NorCal on this one.

The Court concludes that the return information sought is directly related to the issue of class certification in this federal court proceeding. The names of the putative class member organizations and their control dates—the date which the putative class member organizations submitted their applications for tax exempt status to the IRS—are directly related to the issue of class certification. Plaintiffs seek the return information of the putative class members to prove to the Court that the Federal Rule of Civil Procedure 23(a) and 23(b) requirements such as typicality, commonality, and whether the IRS acted on a grounds that applied generally to the putative class are satisfied. ...

I’m beginning to despair of their ever being an end to the IRS Scandal on Day 714 by the TaxProf count, as I write this. I thought this latest decision might be a good opportunity to reach out to someone who might have a different view on the whole matter.

Frank Wolpe, Professor Emeritus at Bentley University has written a white paper about rebuilding the IRS. (download)

The paper identifies the ill-conceived massive 1998 structural reorganization and division (like salami-slicing) of field operations as a major cause of the IRS’s current legal battles and “downward slide.” In its 1998 aftermath, we were all left with an overly centralized Washington IRS National Office and an undermanaged array of field operations. That’s where the Tea Party scandal started; and, even more importantly, it need never be repeated. Indeed, such events must stop!

“With that recognition, change-makers can travel a 2015 bipartisan pathway to addressing a wrong-headed 1998 “solution” to a 1998 non-existent structural problem by introducing a 2015 proposal for a National Office consolidation (slimming down) coupled with a field operations decentralization (closer to customers and ending the practice of absentee senior management without local accountability).

Of course the notion that the scandal must have actually started in the Oval Office still has an irresistible grip in some circles, so a boring reorganization just won’t be satisfying.  So maybe it never will end.

Hans von Spakovsky of cnsnews.com wrote:

The arguments in this case by the Justice Department are another example of how the IRS has been hiding behind Section 6103. That law was intended to prevent the IRS from publicly disclosing private tax information—such as its illegal disclosure of the tax returns of the National Organization for Marriage (the IRS agreed to pay National Organization for Marriage $50,000 to settle that case in June of 2014). But the IRS has been trying to use this law to prevent having to disclose its abusive treatment of taxpayers.

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April 25, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Friday, April 24, 2015

The IRS Scandal, Day 715

IRS Logo 2Breitbart, Did John McCain Know about IRS Targeting?:

When the IRS scandal broke, Sen. John McCain sent out a press release claiming to be shocked at the news. But was he?

Three years’ of IRS e-mail evidence continues to build against the federal government. The most interesting and possibly disturbing piece of information deals with the fact that Republican Senator McCain and Democrat Senator Carl Levin were both aware of the targeting eleven days before Lerner’s public admission of “inappropriate” actions.

E-mails reveal that staffers from McCain’s office met with IRS personnel for six hours, 11 days before Lerner’s public admission of “inappropriate” actions. ...

This revelation served as chilling confirmation of a suspicion Tea Party groups had all along: they were under fire from both sides of the establishment in Washington, D.C. Republicans and Democrats worked together to crush their common enemy, actual conservatives. ...

[W]hat about that six hour meeting? McCain has some serious explaining to do about just how much he knew about the targeting at the IRS. He’s certainly had his differences with the Tea Party and conservative Republicans in the past. And his positions on free speech and political action have more in common with liberals who prefer a one-way street over the marketplace of ideas.

Maybe, just maybe, Senator McCain did not mind the IRS’ attempts to stifle the First Amendment rights of Tea Party citizens. Maybe his shock at Lerner’s revelation was just as fake as the outrage from the White House.

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April 24, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, April 23, 2015

The IRS Scandal, Day 714

IRS Logo 2Forbes, Before IRS Targeting, Lois Lerner Targeted At Federal Election Commission, by Robert W. Wood:

The IRS audits, sends bills, imposes penalties, files liens and levies. Yet incredibly, most of the money the IRS collects is self-assessed. We all fill out tax returns and voluntarily send in money. How much we believe in the system is critical to making it work. Sure, part of the reason we comply is our fear that we’ll be viewed as willful risking jail if we don’t. But there may be a correlation between how much people cheat and their faith that the tax system is impartial. That’s one reason the state of the IRS is so terribly important.

It is hard to believe that the IRS scandal is on day 711. More than two years on, we know that Lois Lerner got a pass on prosecution. She even got nice bonuses. And it seems clear that nothing more will happen. Democrats say that is as it should be, since as President Obama remarked that there is not even a smidgen of corruption at the IRS. But Ways and Means Oversight Subcommittee Chairman Peter Roskam (R-IL) spoke in support of Congressman Jim Renacci’s (R-OH) Prevent Targeting at the IRS Act, which passed unanimously along with several other measures to rein in the IRS. Rep. Roskam called the targeting insidious and poisonous. ...

There is arguably no part of the government more important than our tax system. Our country cannot exist without it. Our tax code and how we administer it could be improved. Yet it is still a system with integrity, one that is administered mostly on the honor system. IRS employees deserve better than the black eye they are getting over this mess. American taxpayers deserve better too.

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April 23, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Wednesday, April 22, 2015

The IRS Scandal, Day 713

IRS Logo 2News Max, IRS Tea Party-Targeting Scandal Continues:

If the tea party and other conservative groups had been fully active in the critical months leading up to the 2012 election, would Mitt Romney be president today? The public will, of course, never know for certain.

Thanks to Judicial Watch, however, the American people do now know the Internal Revenue Service (IRS) targeted right-leaning organizations applying for tax-exempt status and prevented them from having their voice heard during that period. ...

In their lawsuit, Judicial Watch is asking the courts to order the IRS to do the following:

  • Conduct a search for any and all records responsive to (Judicial Watch’s) FOIA requests.
  • Produce, by a certain date, any and all nonexempt records responsive to (Judicial Watch’s) FOIA requests and a Vaughn index of any responsive records withheld under claim of exemption.
  • Enjoin the [RS from continuing to withhold any and all non-exempt records responsive to the plaintiff’s FOIA requests.

This targeting of donors and other right-leaning groups is intriguing in light of a new Lerner email Judicial Watch just released.

The email discloses that the IRS audited tax-exempt political groups using a separate investigation arm (under Lerner’s control), the Review of Operations Unit. Lerner wrote: "Also, we often use the ROO [Review of Operations Unit] to do initial research. Before starting audits — they don’t touch taxpayers, but can look at publicly available info about orgs."

These documents should dispel any remaining doubt that the Obama administration used tea party applications to do opposition research on individual citizens and groups opposed to President Obama’s policies.

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April 22, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, April 21, 2015

The IRS Scandal, Day 712

IRS Logo 2National Review, The IRS Assures an Atheist Group It Will Monitor Churches:

It was bad enough, as I wrote here last August, that the Internal Revenue Service appeared to reach an agreement to monitor the pulpits of ill-favored churches. What’s worse is that the IRS, directly counter to Freedom of Information Act (FOIA) requirements, steadfastly has refused to make public key documents pertaining to that decision.

So the IRS, acting with the whole power of government behind it, seems to be saying it can monitor and presumably punish churches for the content of their sermons, but the churches can’t know exactly if, how, and why they are being monitored.

To fight this combined assault on religious liberty and on government transparency, conservative legal stalwarts Alliance Defending Freedom (ADF) and Judicial Watch together filed suit April 9 to force release of the IRS documents. ADF asserts that the IRS already has shared the documents with the atheist Freedom From Religion Foundation (FFRF). Once again, the IRS bends over backwards on behalf of leftists while harassing and ignoring the rights, on multiple levels, of conservative groups or faith communities.

And if the IRS continues to flout FOIA, we ought to treat its obstinacy as a major scandal. Then again, the IRS’s connivance with FFRF is itself a scandalous and deliberate trampling of our founding freedom of religious exercise and expression, guaranteed by the First Amendment.

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April 21, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Monday, April 20, 2015

The IRS Scandal, Day 711

IRS Logo 2Charleston Post and Courier editorial, Lack of Transparency a Continuing Scandal:

Hillary Clinton’s disclosure that she used her own email system for official and private business while Secretary of State and has wiped clean its server, after delivering print-outs to the State Department that she and her staff selected, is one more reminder that “the most transparent administration” ever still maintains large walls of darkness around sensitive subjects.

The Justice Department recently bolstered that sad truth when it declined to bring charges of contempt of Congress against former Internal Revenue Service official Lois Lerner.

That means Ms. Lerner can’t be compelled to tell Congress and the public about her role and motives while on the public payroll in supervising an IRS witch-hunt of “Tea Party” and other conservative groups seeking tax-exempt status in the 2011-2012 election cycle. ...

We are left to wonder who at the IRS knew about the crackdown on conservative, but not liberal, groups. Were there higher ups who wanted to tilt the political playing field against conservative candidates?

A reported 298 conservative groups were targeted. U.S. District Court Judge Susan Dlott recently ruled, over the objection of the Justice Department, that the Internal Revenue Service must turn over a list of their names to litigants who want to bring a class-action suit against the government for violating their First and Fifth Amendment rights as well as pertinent federal law.

So the public yet should get some additional information on this scandal from an unwilling administration.

Just over six weeks ago the inspector general for the IRS reported that it was looking into criminal activity by the agency in falsely reporting to Congress that it could not recover Ms. Lerner’s emails because of computer failure and the lack of backup tapes. The IG reported that his office found the backup tapes with little trouble.

That report let a bit of light into the dark subject of the politicization of the revenue service, but the relentless back-checking by the IRS and the Justice Department, like the possibly illegal destruction of records by Mrs. Clinton, will make it hard to learn what happened before the next presidential election is over.

As for the president’s promise that his administration would be the most transparent in history, it is well to remember the advice given by Richard Nixon’s Attorney General John Mitchell on how to evaluate that administration:

“Watch what we do, not what we say.”

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April 20, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Sunday, April 19, 2015

The IRS Scandal, Day 710

IRS Logo 2Breitbart, IRS: Mistakes Were Made:

Judicial Watch has just released a new batch of documents forced out of the IRS that show the Obama administration’s scandalous misuse of the IRS to target Tea Party and other conservatives goes far deeper than realized.

Included in the new batch of documents is a February 2012 email from Lois Lerner, who was then head of the IRS’ Exempt Organizations Branch, asking that a special program be set up to “put together some training points to help [IRS staffers] understand the potential pitfalls” of revealing too much information to Congress. Amid the hundreds of released pages, Judicial Watch also found a remarkable Lerner email from 2013 in which she says she is willing to take the blame for not having provided sufficient direction to her underlings on how best to investigate the targeted groups, and then concedes that she “understands why the IRS criteria” leading to targeting of Tea Party groups and other opponents of President Obama “might raise questions.”

In May 2013, the Treasury Inspector General for Tax Administration (TIGTA) released an audit revealing the IRS had used “inappropriate criteria” to identify potential political cases. “Early in Calendar Year 2010,” TIGTA wrote, “the IRS began using inappropriate criteria to identify organizations applying for tax-exempt status to (e.g., lists of past and future donors).” The illegal IRS reviews continued for more than 18 months and, TIGTA reported, “delayed processing of targeted groups’ applications” preparing for the 2012 presidential election.”

Not so coincidentally, during this period of time, Lerner emailed former Director of the Office of Rulings and Agreements Holly Paz, attempting to limit information provided by the IRS to Congress about non-profit classifications. ...

Should Mitch McConnell lead Republicans and Democrats in requiring the appointment of a special counsel for Lynch (or, preferably, a better nominee) to get a vote on the floor of the U.S. Senate? Concerned citizens should let McConnell and other Senate representatives know what they think. McConnell’s office can be reached at 202-224-3121.

In the meantime, Judicial Watch will keep on doing what Justice and Congress won’t. There is more to come. The watchdog currently has thousands more internal IRS documents under review, several other lawsuits and more leads that are keeping the organization working at full capacity. The fight for transparency and accountability is too important to let up now.

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April 19, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, April 18, 2015

The IRS Scandal, Day 709

IRS Logo 2Letter From Charles Grassley (Chair, Senate Judiciary Committee) to Sally Yates (Acting Deputy Attorney General) and J. Russell George (Treasury Inspector General for Tax Administration) (Apr. 15, 2015):

I am writing in regard to the ongoing criminal investigation into the alleged misconduct by Internal Revenue Service personnel, including Ms. Lois Lerner, in connection with their handling of applications for tax-exempt status by certain conservative organizations. In May of 2013, Attorney General Holder announced that he had ordered the investigation. In January of 2014, the Wall Street Journal, citing unnamed law-enforcement officials, reported that the FBI did not at that time plan to file any criminal charges as a result of the investigation, but noted that the case was ongoing and would likely remain open for months.

On November 3, 2014, the Department of Justice filed a sworn declaration by Mr. Nelson D. Hermilla, an official in the Department’s Civil Rights Division, in a civil case in the U.S. District Court for the District of Columbia. In that declaration, Mr. Hermilla stated that the Justice Department “is currently conducting” the investigation of alleged IRS misconduct, further stating:

The investigation is being conducted by career attorneys in the Civil Rights Division and the Public Integrity Section of the Criminal Division, as well as agents from the Federal Bureau of Investigation and the Treasury Inspector General for Tax Administration.”

In order to evaluate the extent to which your organizations are actively investigating this issue, please provide written answers to the following questions by May 15, 2015:

1. Since January of 2014, who has been assigned to the investigation from each of the offices cited in Mr. Hermilla’s declaration?

2. When were they assigned, and by whom?

3. How many hours has each attorney or agent identified above worked on the investigation since being assigned to it? How many hours since January of 2014?

4. Prior to being assigned to this investigation, had any of these assigned attorneys or agents previously had contact with any of the IRS employees or offices under investigation? If so, please provide a detailed explanation of the nature and extent of the prior contacts.

5. Has a litigation hold or other preservation effort been instituted to ensure that all potentially relevant parties preserve all possible evidence, including electronically stored information that could otherwise be damaged or erased absent such preservation efforts? If so, please provide a copy. If not, please explain why not.

If you have any questions about this request, feel free to contact Patrick Davis of my Committee staff at (202) 224-5225. Thank you for your attention to this important matter.

Forbes, IRS Targeting Investigation Is Probed By Senator Grassley, by Robert W. Wood:

Without hyperbole, Sen Grassley ask logical questions and is entitled to some answers:

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April 18, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, April 17, 2015

The IRS Scandal, Day 708

IRS Logo 2Wall Street Journal editorial, How Lois Lerner Got a Pass: The Prosecutor Absolved the IRS Witness on His Last Day on the Job:

If Americans know anything about the IRS it’s that it accepts no excuses, and so they trudged wearily on Wednesday to pay their taxes. That’s in notable contrast to the free passes that keep flowing to the tax agency’s most famous former employee, Lois Lerner.

The Obama Administration’s latest gift to the former IRS tax-exempt chief came recently when U.S. Attorney for the District of Columbia Ron Machen informed the House of Representatives that he would not file charges on its formal contempt citation against Ms. Lerner. This absolution, which shields Ms. Lerner from a grand jury probe, came on Mr. Machen’s final day on the job.

To review: Ms. Lerner was summoned to the House on May 22, 2013, to answer questions about her role in the IRS’s politically biased review of Tea Party nonprofit group applications for tax-exempt status.

She began her testimony with a statement recounting her career, reprising the scandal and proclaiming her innocence. She ended by saying: “I have not done anything wrong. I have not broken any laws, I have not violated any IRS rules or regulations, and I have not provided false information to this or any other congressional committee.” Only after she offered this long defense did she claim her right not to incriminate herself by citing the Fifth Amendment, refusing to answer questions.

House lawyers determined that, in making that statement, Ms. Lerner had forfeited her right to remain silent. The House on May 7, 2014 held her in contempt of Congress and sent the citation to Mr. Machen.

The law clearly explains that the U.S. Attorney’s only “duty” “shall be” to “bring the matter before the grand jury for its action.” Mr. Machen instead sat on the contempt citation for 11 months, and on March 31 sent Speaker John Boehner a letter explaining he’d unilaterally decided not to investigate Ms. Lerner.

According to Mr. Machen’s rationale, Ms. Lerner’s statement made only “general claims of innocence” that did not forfeit her Fifth Amendment rights to refuse to answer questions. To reach this conclusion, Mr. Machen had to willfully ignore that Ms. Lerner, in her statement, rebutted specific accusations against her.

“[M]embers of this committee have accused me of providing false information when I responded to questions about the IRS processing of applications for tax exemption,” she said, before claiming she had never done so. Those accusations had been detailed to her in a letter from former House Oversight Committee Chairman Darrel Issa, eight days before she testified.

Mr. Machen also had to ignore that Ms. Lerner had prior to her House appearance voluntarily met for an interview with Justice prosecutors. As the Heritage Foundation’s Hans von Spakovsky has noted, the D.C. Circuit Court of Appeals in its 1969 Ellis v. U.S. decision found that “once a witness has voluntarily spoken out, we do not see how his protected interest is jeopardized by testifying in a subsequent proceeding, provided he is not required to disclose matters of substance which are unknown to the Government.”

Since Ms. Lerner had already disclosed to the “government” (prosecutors), she lost her privilege to clam up before Congress. And we’d note that after her House stonewall, she again chose to speak in an interview with the Politico website. Ms. Lerner wants the right not to answer questions except when it suits her public-relations purposes.

In any event, the job of making these legal calls belonged to a grand jury—not Mr. Machen. Then again, this is the prosecutor who in an exit interview with the National Law Journal about his tenure touted his allegiance to Attorney General Eric Holder, describing him as a “tremendous mentor and a tremendous friend.”

After Mr. Machen’s performance in shielding Ms. Lerner from the consequences of her actions, Mr. Holder would no doubt return the compliment. The handling of the IRS scandal is a blot on both of their careers.

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April 17, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Thursday, April 16, 2015

The IRS Scandal, Day 707

IRS Logo 2Wall Street Journal, House Passes Package of Bills Aimed at Curbing IRS Abuses:

The House on Wednesday passed a package of bills aimed at preventing future abuses at the Internal Revenue Service, in the wake of a series of controversies at the agency.

The bills, which were largely noncontroversial, passed the House on voice votes, with support from some Democrats.

Despite the bipartisan agreement on Wednesday, the bills’ future in the Senate remains somewhat unclear, as there is ongoing partisan rancor over the IRS.

Republicans have been harshly critical of the IRS, particularly after an inspector general’s report in 2013 said agency officials had targeted dozens of tea party-type groups for intrusive scrutiny as they sought tax-exempt status, starting in 2010. That controversy in turn led to a series of other scandals, for example over how and why the agency had mishandled some confidential taxpayer information. ...

Democrats have acknowledged problems with some of the agency’s processes. But they have generally blamed bureaucratic incompetence, saying the agency wasn't motivated by political bias. ...

The bills passed on Wednesday were mostly narrow in focus. One would streamline the application process for nonprofit social-welfare groups seeking to become tax-exempt, effectively eliminating the IRS’s ability to hold up their applications indefinitely.

Another would make it a firing offense for an IRS official to target taxpayers for their political beliefs. Still another would clarify that gift taxes don’t apply to donations to social-welfare groups organized under section 501(c)(4). 

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April 16, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, April 15, 2015

The IRS Scandal, Day 706

IRS Logo 2Forbes, Lois Lerner Emails Defend Targeting, Warn IRS Employees Emails Can Be Seen By Congress, by Robert W. Wood:

At tax time, is it any wonder that Americans are afraid of the IRS? Talk of secret emails, and political targeting criteria are worrisome. President Obama said there was not a smidgen of corruption at the IRS. He said any missteps were innocent and entirely the fault of bonehead decisions in local offices. If you are still not convinced it is all so innocent, just in time for your April 15 tax filing, a new batch of IRS documents has been released.

One email from former IRS firebrand Lois Lerner is particularly revealing. Sure, she said she did nothing wrong, she was the victim, and she still took the Fifth. But in February 2012, she wanted to “put together some training points to help them [IRS staffers] understand the potential pitfalls” of revealing too much information to Congress. This is the IRS version of don’t tell.

The documents also contain a Lerner email from 2013 in which she says she is willing to take the blame on some aspects of the scandal. Of course, she would later take the Fifth, something the Justice Department just said was OK despite Congress’ contempt citation. Ms. Lerner also wrote in one of those sticky emails that she “understands why the IRS criteria” leading to the targeting of Tea Party and other opponents of the President Obama “might raise questions.”

Just questions? The documents were released in the case of Judicial Watch v. IRS. Although the latest release still does not reveal all of Lerner’s actions, it is Lerner’s most extended public discussion, including her defenses.

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April 15, 2015 in IRS Scandal | Permalink | Comments (0)

Tuesday, April 14, 2015

The IRS Scandal, Day 705

IRS Logo 2Letter From Orrin Hatch (Chair, Senate Finance Committee) to John Koskinen (Commissioner, IRS) (Apr. 13, 2015):

At a recent Senate Finance Committee hearing, I noted the long, historic relationship of the Internal Revenue Service and the Senate Finance Committee. The challenges of the IRS in the coming years will be great, as your agency struggles with the implementation of new federal programs and doing more with limited resources. The next chapter in our relationship is a critical one, and I hope a good one, but as I noted at the hearing, that is ultimately up to you.

I also warned that attempts to limit political speech through the tax code would not be tolerated, and would only serve to “further entangle your agency in political debate and controversy.” Two years ago, your agency put forth proposed regulations that would upend half-century-old rules regarding get out the vote drives, voter registration, and other activities by tax exempt organizations. This rule was withdrawn after intense opposition across the political spectrum. You recently announced that the IRS would seek to broaden the rule, restricting the speech and activities of an even wider range of tax exempt organizations. You are starting down a very dangerous road.

You have explained that this attempt to restrict the rights of groups to organize and speak out was in response to the IRS’s targeting of conservative groups and 2013 recommendations by the Inspector General. You have also explained that new rules were necessary to prevent further targeting. Both claims are false.

Congressional investigations have established that the Treasury Department began work on the proposal in 2011, long before the Inspector General’s recommendations and during the height of the political targeting, rather than in response to it. Furthermore, interviews with front-line IRS employees established that those workers were processing applications from conservative groups in a timely fashion and without difficulty, until political officials in Washington, DC intervened. The problem was not the rules governing tax exempt entities – the problem was officials at IRS and Treasury Department headquarters further involving your agency into the political speech of Americans across the country. Rather than preventing further targeting, the new proposal – should you proceed with it – will be the systemization of targeting through law.

As it is, the IRS faces seemingly insurmountable challenges in implementing the President’s health care overhaul and the Foreign Account Tax Compliance Act with limited resources. The IRS is just beginning to recover its reputation, and your agency is just beginning to regain trust from lawmakers. Do not throw all of that away in a quixotic and bizarre mission to regulate the political activity of Americans. If you do so, in light of your agency’s recent history, your actions will be viewed with the presumption of political bias and bad faith. If you issue this proposed rule, Congress will have no choice but to investigate the reasons behind this power grab, be it political motivation or orders from officials at the Treasury Department or the White House. To that end, and in anticipation of the Administration moving ahead on this issue, I ask that you begin putting in place document retention policies for all documents and communication related to your agency’s work regarding these proposals. This retention should include, but is not limited to, all handwritten notes, memoranda, and electronic communication on the matter.

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April 14, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Monday, April 13, 2015

The IRS Scandal, Day 704

IRS Logo 2CNS News, Lerner Email Warned IRS Employees of Emails That ‘Can Be Seen By Congress’:

Lois Lerner, former director of the Exempt Organizations Unit at the Internal Revenue Service (IRS), warned other IRS officials that lower-level employees “are not as sensitive as we are to the fact that anything we write can be public--or at least be seen by Congress,” according to documents obtained by Judicial Watch and released on Thursday.

In the latest batch of documents the IRS released to Judicial Watch under the Freedom of Information Act (FOIA), which the agency heavily redacted before handing over, Lerner proposed training to help IRS employees “understand the pitfalls” of discussing “specific Congress people, practitioners and political parties” in emails that could be "seen by Congress" or the public.

“We are all a bit concerned about the mention of specific Congress people, practitioners and political parties. Our filed folks are not as sensitive as we are to the fact that anything we write can be public--or at least be seen by Congress,” Lerner wrote in an email to Holly Paz, former director of the IRS Office of Rulings and Agreements, on Feb. 16, 2012.

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April 13, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Sunday, April 12, 2015

The IRS Scandal, Day 703

IRS Logo 2Washington Examiner, Lerner Pushed Treasury Watchdog to Back Off 'Targeting' Charge in Probe:

Former IRS senior executive Lois Lerner appeared to be pressuring Treasury Department inspector general investigators to back off their conclusion that the federal tax agency had improperly targeted conservative and Tea Party nonprofit tax exemption applicants.

In an email on Jan. 31, 2013, Lerner encouraged Troy Patterson of the Treasury Inspector General for Tax Administration to back off of his investigators' view that the tax agency was targeting political groups for excessive attention.

"We feel your folks are being too narrow in their view and have decided that because of the language on the earlier BOLO list regarding Tea Party, everything that followed was tainted. They seem to believe that if a case was initially sent to the advocacy group, but ultimately determined to be an approval, that our action in putting it into the advocacy group in the first place is incorrect, and illustrates 'targeting,'" she said.

"BOLO" was the tax agency's abbreviation for categories of nonprofit applicants to "be on the lookout" for as they were received.

PJ Media, Lerner Email Shows Attempt to Pressure IG Conclusions in IRS Targeting Scandal:

About 5 months before former director of the IRS exempt division Lois Lerner casually let slip the revelation that her department had been targeting conservative organizations for special scrutiny, she sent an email to the inspector general investigating the matter, accusing the IG of being “too narrow” in their scope of the targeting investigation, claiming that she was just doing her job.

It is unusual for the subject of an investigation to plead their case so directly with the inspector general. But the email also shows that Lerner was well aware of the problems in her office with targeting and was looking for a break from the IG in reaching his conclusions.

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April 12, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Saturday, April 11, 2015

The IRS Scandal, Day 702

IRS Logo 2The Blaze, ‘America Is Fed Up’: GOP Schedules Votes on Major IRS Reforms Next Week:

The House next week is expected to pass several bills aimed at reforming the IRS, in

particular the way the IRS handles applications for groups seeking tax-exempt status.

That issue has been highly controversial since it was revealed that the IRS applied extra scrutiny to conservative groups seeking tax-exempt status just before the 2012 election. The resulting scandal forced former IRS official Lois Lerner to leave the agency, although Lerner has so far dodged any punishment for her role.

For example, the Justice Department just said it won’t prosecute Lerner for her decision not to testify before Congress about her actions in the targeting scandal.

GOP leaders say the IRS needs real reform, and quickly, to ensure it doesn’t become a political weapon for whichever party runs the executive branch.

“The IRS has maliciously targeted individuals and groups simply because of their personal beliefs,” House Majority Leader Kevin McCarthy (R-Calif.) told his colleagues on Thursday. “The current system is unfair and America is fed up.”

Three of the bills up next week deal with the targeting scandal. One of these, from Rep. George Holding (R-N.C.), would try to to ensure the IRS can no longer play politics with tax exempt applications by allowing groups to declare tax-exempt status on their own, without having to wait for the IRS.

Another from Rep. Jim Renacci (R-Ohio) calls for the firing of any IRS worker that delays their tasks for political reasons, such as slow-walking the tax-exempt status of a political group. And the third, from Rep. Pat Meehan (R-Pa.), would require the Treasury Department to issue regulations allowing groups to appeal decisions by the IRS not to grant them tax-exempt status.

The bills are being considered long after the targeting scandal broke, which shows a lingering resentment among conservatives, and a feeling that reforms are still needed at the tax collection agency. Just last month, some Republicans accused the IRS of quietly working to undo some of the reforms Congress has tried to impose on it, by putting forward a budget plan that doesn’t include language related to ending the political targeting of tax-exempt groups.

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April 11, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Friday, April 10, 2015

The IRS Scandal, Day 701

IRS Logo 2Judicial Watch Press Release, IRS Documents Reveal Lerner Knew Targeting Criteria of Nonprofit Groups ‘Might Raise Questions’:

Judicial Watch today released a new batch of Internal Revenue Service (IRS) documents, including an email from former IRS official Lois Lerner in February 2012 asking that a program be set up to “put together some training points to help them [IRS staffers] understand the potential pitfalls” of revealing too much information to Congress.  The documents also contain a Lerner email from 2013 in which she says she is willing to take the blame on some aspects of the scandal.  She also indicates that she “understands why the IRS criteria” leading to the targeting of Tea Party and other opponents of the President Obama “might raise questions.”

The documents were released under court order in one of the Judicial Watch’s ongoing Freedom of Information Act (FOIA) lawsuits about the Obama IRS’ abuses (Judicial Watch v. IRS (No. 1:13-cv-1559).

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April 10, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Thursday, April 9, 2015

The IRS Scandal, Days 601-700

April 9, 2015 in IRS Scandal, Tax | Permalink | Comments (0)

The IRS Scandal, Day 700

IRS Logo 2Philip T. Hackney (LSU), Should the IRS Never 'Target' Taxpayers? An Examination of the IRS Tea Party Affair, 49 Val. U. L. Rev. ___ (2015):

In 2013, the Treasury Inspector General for Tax Administration faulted the Internal Revenue Service for the appearance of impartiality because it used names and policy positions such as “Tea Party” and conservative ideology to pick applications for tax-exempt status for greater scrutiny. The Inspector General's review came after members of Congress accused the Service of "targeting" conservative organizations. This Article finds the Inspector General's claim lacks a firm foundation. The use of names to select organizations for closer review fits well within the discretionary space that both Congress and courts provide to the Service to collect revenue. However, a narrower legal and ethical claim is supportable: where an enforcement choice impinges on a fundamental constitutional right the Service should exercise a higher degree of care to ensure that its screening choices do not appear biased in an unconstitutional manner. Thus, this review finds the Inspector General's primary claim regarding it being inappropriate to use names to screen applications to be incorrect. However, it finds that the Service violated an ethical norm because it failed to bring a high level of care to a matter that at least impinged on a fundamental Constitutional right. The Article recommends that the Service continue using names to screen applications for tax-exempt status. However, the Article suggests the Service implement procedures to document an unbiased process when evaluating applications that raise questions of a fundamental Constitutional nature.

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April 9, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, April 8, 2015

The IRS Scandal, Day 699

GroverNews Max, Grover Norquist: IRS 'Kneecapped' Tea Party for Obama in 2012:

The IRS stole the 2012 presidential election with its ruthless targeting of the tea party, an order that came from President Barack Obama himself, Grover Norquist, president of Americans for Tax Reform, tells Newsmax TV.

Norquist — author of the new book End the IRS Before It Ends Us: How to Restore a Low Tax, High Growth, Wealthy America — said the agency dramatically slowed the tea party movement's growth when it questioned the validity of their tax-exempt status.

"That the attack on the tea party in 2011 and 2012 actually made sure that Obama got re-elected," Norquist said Tuesday on "The Steve Malzberg Show" on Newsmax TV. "They kneecapped the growing tea party movement, slowed it down, scattered it. ...

"The president said out loud, would somebody please get these people for me? And we saw Lois Lerner say, I'm being told and yelled at to do this even though I'm not legally allowed to," Norquist said.

"The president was saying it out loud, the Democrats in the Senate were saying it out loud on television, on radio. They sent her to go after the tea party and they damaged the tea party. They kneecapped a growing movement."

Washington Examiner, Norquist Book: IRS Assault on Tea Party Saved Obama's Presidency:

The administration-ordered persecution of Tea Party groups shut down the movement in time to save President Obama's reelection and starve Republican Mitt Romney of the 4,262,296 votes needed to take the White House, according to an explosive new book from tax foe Grover Norquist.

In End The IRS Before It Ends Us, a clarion call for a new, fairer tax system, Norquist pieces together the IRS scandal and scholarly electoral studies to show that plot worked to stifle the expanding Tea Party movement in the nick of time to help Obama.

"Had the Tea Party repeated and built on their activism of 2009 and 2010 in 2011 and 2012, Obama would have lost the election. What happened to the Tea Party boost? It didn't grow from 2010. It appeared to weaken," writes Norquist, president of the influential Americans for Tax Reform.

But, he adds, "The Tea Party didn't fall down the stairs. It was pushed."

His theory is built on two key facts.

First, he cited a study on the Tea Party movement that found it pushed up to 5.8 million extra Republican voters to the polls in 2010 when the GOP took control of the House, essentially shutting down Obama's agenda.

Then he cites comments in official reports from former IRS executive Lois Lerner, the key figure in the scandal, who said that she received orders in advance of Obama's reelection to "do something" to shut off conservative funding in the wake of the Supreme Court's Citizens United decision. ...

"In our modern kneecapping, President Obama was Tonya Harding," scoffed Norquist. "The American people who had voted strongly in 2010 and threatened the president's chances of winning in 2010 were Nancy Kerrigan," he added. ...

"In the two years running up to the 2012 Obama re-election campaign, the IRS, driven by a political activist with no experience that would recommend her for that job, decided to smash the Tea Party movement by stopping them from organizing," Norquist concludes.

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April 8, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, April 7, 2015

The IRS Scandal, Day 698

IRS Logo 2Forbes, Despite Lois Lerner Pass, Judge Orders IRS To Release Key Target List Administration Blocked, by Robert W. Wood:

A federal judge, Judge Susan J. Dlott—ironically in Cincinnati, where the Obama administration’s first bumbling explanation for targeting was “rogue IRS agents”—has ordered the IRS to produce a list of all 298 conservative nonprofits the IRS targeted. ‘Huh, what targeting?’ one can imagine Justice Department officials mumbling. Mr. Obama’s Justice Department fought to keep the list private despite promises his would be the most transparent administration ever.

The lawsuit by conservative groups could end up certified as a class action for violating their constitutional right to equal treatment. The judge determined that the litigants were entitled to know so the judge ordered the IRS to release the list of targeted Tea Party groups. If the judge also certifies the case as a class action, the disclosures could be broader still.

The timing is propitious, coming just as Targeter in Chief Lois Lerner was exonerated by the Obama administration. It has confirmed in a tortured seven-page letter that there will be no criminal charges for Lois Lerner. Meanwhile, controversial IRS Commissioner John Koskinen recently claimed that the changes at the IRS are so significant that “you could hang a sign out at the front of the headquarters saying ‘Under New Management.’” That’s right, any alleged targeting was in the past. ...

On February 26, 2015, the Treasury Inspector General said he is investigating possible criminal activity at the IRS. Remember all the millions and millions in taxpayer money spent looking? One report said over 250 IRS employees spend 100,000 hours, costing taxpayers at least $14 million. IRS Commissioner John Koskinen testified that recovery efforts had been thorough, and the tapes and emails couldn’t be found.

Yet the Inspector General now reports that the IRS had not even asked for the backup tapes when the ‘hard drive crash’ excuse was first used. The tapes were easy to find and the emails were easy to recover. It is astounding, and yet Democrats still pooh-pooh the targeting and imply it is the fault of the conservative groups in the first place. ...

[N]ow Judge Susan J. Dlott has said that Tea Party groups can pursue their claims that the IRS violated their First and Fifth Amendment rights, along with a section of federal law that prohibits the government from releasing private information contained in tax returns. The lawsuit wants a list of ‘all dissenting groups targeted for additional scrutiny by the IRS from January 20, 2009, through July 15, 2013.’ The court said this information was “directly related to the issue of class certification in this federal court proceeding.”

Some names on the list will be no surprise, as a partial list was unearthed by USA Today in September 2013. An IRS spreadsheet characterized the activities of some groups as “propaganda.” Judge Dlott ordered the IRS to tell the court whether or not that list was authentic, The Washington Times reported. It sad to see the IRS used for political purposes, and sad to see the endless difficulty private parties and Congress have had getting answers. Perhaps that will change.

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April 7, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Monday, April 6, 2015

The IRS Scandal, Day 697

IRS Logo 2Legal Insurrection, Judge Orders IRS to Release Tea Party Target List:

If Bush had done this to liberals, people would be in jail by now.

The Department of Justice may have let Lois Lerner off the hook, but a judge has ordered the IRS to release the names of the Tea Party groups that were singled out for scrutiny. ..

I still enjoy wondering how different this would be if it happened on Bush’s watch. Do you think the media might be more interested?

Hot Air, Judge Orders IRS to Release List of Targeted Conservative Nonprofit Groups:

Lois Lerner didn’t care to speak when she was invited for tea before congressional committees, and it turns out that no charges will be filed against her over her shyness. But that may not be the end of the story for the IRS scandal. A judge in Ohio has consented to a request filed by representatives of several Tea Party groups which calls for the IRS to turn over the full list of conservative groups selected for extra special scrutiny when they filed for nonprofit status. ...

There are several layers to this particular onion. The White House fought back from day one against any such disclosures, saying that releasing the requested information would require exposing private data which the IRS is forbidden to reveal. But that’s only intended to protect individuals, businesses and groups from having all the particulars about their internal business exposed, not the simple fact that they exist and pay taxes. In this suit, rather than asking for all of the numbers, the IRS is simply being asked to provide a spreadsheet containing the identities of the groups under scrutiny. The judge agreed that the case couldn’t be decided without that bare minimum data.

More interesting are the possibilities which follow if the data finally comes to light. If the groups can establish that they all fall under the same umbrella of potential discrimination, they can be bound together in a class action suit. This opens up a range of possibilities, including the hope that the secretive agency will be forced to expose their practices to the public.

Exit question: The Feds are, at this point, refusing to go after Lerner. If this suit succeeds and all of the internal workings of the system are brought to light, including how they selected the groups singled out for “special attention” in the application process, is there another bite at the apple in the offing? Could Lerner wind up back before Congress? And if so, will she just plead the 5th again?

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April 6, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Sunday, April 5, 2015

The IRS Scandal, Day 696

IRS Logo 2National Review, Making the Lois Lerner Problem Disappear, by Hans von Spakovsky:

On March 31, Ronald Machen, the outgoing U.S. attorney for the District of Columbia, wrote House Speaker John Boehner to inform him that the Justice Department would not present Lois Lerner’s contempt citation to a federal grand jury.

The letter explaining his decision is an exercise in misdirection—the kind of misdirection that magicians use to fool an audience. Why? Because at no point in his detailed, seven-page legal analysis does Machen mention the most important point demonstrating that Lerner did, in fact, waive her Fifth Amendment right. ...

In the March 31 letter, although acknowledging that the House Committee found that Lerner’s “opening statement was the equivalent of ‘voluntary’ testimony,” Machen concludes that, in declaring her innocence, Lerner did not waive her Fifth Amendment privilege because “case law establishes that Ms. Lerner’s general denials of wrongdoing did not amount to ‘testimony’ about the actual facts under the Committee’s review.”

Having decided that Lerner did not waive her Fifth Amendment privilege, Machen goes on to claim that it is within his discretion not to present the House’s May 7 contempt citation to a federal grand jury. He bases that claim on his reading of a 1984 legal opinion from the Justice Department’s Office of Legal Counsel. That despite the federal law, which provides that, once the House of Representatives has voted to find a witness in contempt, the speaker of the House must certify the matter to the “appropriate United States Attorney, whose duty it shall be to bring the matter before the grand jury for its action” (emphasis added).

Although this is debatable from a legal standpoint, and lawyers can disagree on whether Lerner’s declaration of innocence at the public hearing was or was not testimony that waived her Fifth Amendment privilege, what is not debatable is that there is a gaping hole in Machen’s recitation of the facts and his legal analysis.

According to The Wall Street Journal, right after Lerner’s frustrating March 5, 2014 appearance before the House committee, her lawyer, William Taylor III, told reporters at a press conference that Lerner had given a “lengthy interview” to Justice Department prosecutors “within the last six months, as part of the agency’s investigation into IRS targeting of conservative tea-party groups.” Taylor even admitted that Lerner had freely given DOJ her testimony without getting any promise of immunity from prosecution.

Why is this significant? Because, if Taylor is to be believed, Lerner obviously did not assert her Fifth Amendment privilege when she gave Justice prosecutors a “lengthy interview” about the very subject she had been subpoenaed to discuss with the House Oversight and Government Reform Committee. While the prevailing rule in most federal courts is that a waiver of the Fifth Amendment privilege at one proceeding does not carry through to another proceeding, that is not the rule in the District of Columbia. ...

Ignoring highly relevant, although perhaps inconvenient, facts, outgoing U.S. Attorney Ronald Machen has issued a flawed legal analysis. It reaches an erroneous, but politically expedient, conclusion—one that gives Lerner a pass and further hinders congressional efforts to get to the bottom of this scandal. It’s a pretty slick trick. No wonder Machen’s pulling a disappearing act.

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April 5, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, April 4, 2015

The IRS Scandal, Day 695

IRS Logo 2Daily Mail, Tea Party Groups Win Round 1 in Court as Federal Judge Demands IRS's List of All 298 Conservative Nonprofits It Targeted:

  • Right-wing groups want court to let them sue the IRS in a class-action lawsuit for violating their constitutional right to equal treatment
  • IRS applied different criteria to right-wing groups, holding up their applications for years while liberal organizations skated through
  • Obama administration fought the release of a list of 298 groups it denied tax-exempt status beginning in 2010, citing privacy concerns
  • Judge in Cincinnati overruled the government and ordered the IRS to hand over the list
  • If court 'certifies' class-action status, the tea party groups will be free to demand emails, phone records and other documents

Additional press and blogosphere coverage:

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April 4, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, April 3, 2015

The IRS Scandal, Day 694

IRS Logo 2Investor's Business Daily editorial, Lois Lerner Gets Off - Hillary Clinton Breathes Easier:

The Justice Department says Lois Lerner, who used her IRS office to target the Tea Party, didn't waive her Fifth Amendment rights before Congress and won't be prosecuted for contempt over her missing emails. ...

Lois Lerner, poster child for hard-drive crashes and missing emails, won't face charges for contempt of Congress. ... After pleading her innocence at that 2013 hearing, Lerner went on to invoke her Fifth Amendment right to remain silent. This raised the question of whether the Constitution let her remain silent after she was not silent and pleaded her case.

The House decided that no, it doesn't. In May of last year it voted to hold her in contempt of Congress. The Ways and Means Committee went so far as to send the Justice Department a criminal referral with potential charges that could have meant 11 years in jail.

Lerner waived her rights not only when she pleaded her innocence before Congress, but also when she shared with DOJ information she was withholding from Congress.

Hans Von Spakovsky, senior legal fellow at the Heritage Foundation, says government officials can't pick and choose when and where they invoke their Fifth Amendment rights. They can't legally give information to the DOJ that they withhold from Congress. "When Lerner gave a lengthy interview to the government, she waived the Fifth. There's no doubt about it," says Von Spakovsky. "The law is crystal clear here in the District of Columbia."

But not so clear, it seems, to the political wagon circlers at the Justice Department.

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April 3, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, April 2, 2015

The IRS Scandal, Day 693

IRS Logo 2On his final day in office as the U.S. Attorney for the District of Columbia, Ronald Machen Jr. sent this 7-page letter to Speaker John Boehner informing him that the Department of Justice will not pursue contempt of Congress charges against Lois Lerner.

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April 2, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (6)

Wednesday, April 1, 2015

The IRS Scandal, Day 692

IRS Logo 2Bloomberg, IRS Chief Says Agency’s High-Profile Mistakes Are Behind It:

The IRS has fixed its errors, such as improper extra scrutiny of Tea Party groups, and they won’t happen again, the tax agency’s commissioner said Tuesday.

“The changes are so significant throughout the agency that you could hang a sign out at the front of the headquarters saying ‘Under New Management,’” Internal Revenue Service Commissioner John Koskinen said in a speech at the National Press Club in Washington.

The IRS has imposed limits to prevent problems such as overspending on conferences and videos, and inappropriate scrutiny of politically oriented nonprofit groups, he said.

“The problems do come from a prior era. We have addressed them so we think they won’t happen again,” he said. “It really is a new day at the IRS. It’s not the IRS of 2010, 2011 or even 2012.”

To bolster his point, Koskinen said 46 percent of the agency’s executives -- including two-thirds of the senior leadership team -- have left since October 2011. While the IRS is a large agency and will always have some problems, the key is to find and address them quickly, he said.

Congress has been investigating the IRS and restricting its budget since May 2013, when the agency revealed it had given extra scrutiny to the applications of Tea Party groups seeking tax-exempt status. Other issues -- including lavish conferences, an embarrassing Star Trek-themed video and bonuses paid to tax-delinquent employees -- emerged after that.

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April 1, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, March 31, 2015

The IRS Scandal, Day 691

IRS Logo 2Forbes, How Obama's IRS And Justice Department Killed The Targeting Scandal, by Robert W. Wood:

The IRS applied extra scrutiny because Mr. Obama’s IRS and Justice Department didn’t like the Supreme Court’s decision, presumably fearing that organizations could exercise free speech rights the Supreme Court said they had. Five years later, and two years after the planted bar association question, we remain partly in the dark. Ms. Lerner won’t testify, and we are still told, including by the President of the United States, that there was not a smidgen of corruption at the IRS.

We are told that the IRS is fixed, the targeting will never happen again, and this was not audit targeting anyhow. Some say these organizations shouldn’t be exempt in any event. Now, though, a comprehensive and disturbing report from Politico enumerates the results the IRS has actually achieved despite platitudes from the Obama administration that the system is fixed.

Far from fixed and never happening again, Politico has exposed the seemingly well designed IRS action of death by delay. It is just one more nail in the coffin Professor Paul Caron catalogs in the IRS scandal, now in day 689. Politico painstakingly describes the tale of woe by at least a half-dozen conservative applicants who, amazingly, are still waiting for an answer. The extent of their hardship varies, and some may still receive relief.

Yet we have by now so often been told by IRS Commissioner John Koskinen that the good works of un-targeting the targeted is done. Maybe, but some people are waiting still five years on.  ... Many conservative groups withdrew their applications and gave up. Others changed their names and focus. Some went belly-up while waiting. Of course, in all this recent history, it is worth recalling that in March 2012, former IRS Commissioner Doug Shulman testified there was “absolutely no targeting” by the IRS of conservative and/or Tea Party organizations. On November 9, 2012, Mr. Shulman stepped down as Commissioner, replaced by Steven Miller.

On May 14, 2013, four days after Ms. Lerner’s planted question and feigned lament about it, the Inspector General issued a report confirming targeting. On May 22, 2013, Ms. Lerner professed her innocence, then took the Fifth. Next day, she was placed on administrative leave. On June 20, 2013, the IRS paid $70 million in bonuses. Ms. Lerner received $42,000, and former Commissioner Miller received $100,000.

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March 31, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, March 30, 2015

The IRS Scandal, Day 690

Scientology 2Wall Street Journal, Some Things to Fear in ‘Going Clear’:

Watching Going Clear: Scientology and the Prison of Belief can be a depressing experience, and not just for the two hours in which the HBO documentary runs. The haunting archival imagery—a powerful element here—fades after a few days, and much of what is said has been said before. Yet whether you come away seeing Scientology as a cult that ensnares vulnerable people or as a faith of self-empowerment, the film leaves a terrible taste of too much information. This must be its point, but take heed just the same.

The documentary is based on the 2013 book, Going Clear: Scientology, Hollywood and the Prison of Belief, by Lawrence Wright, who provides on-screen commentary here. It was directed by Alex Gibney, who also made the 2012 HBO documentary Mea Maxima Culpa: Silence in the House of God, about sexual abuse in the Catholic church. ...

As grim and creepy as much of “Going Clear” is, nothing is more disturbing than the account of how Scientology heavies bullied the IRS—using some 2,400 lawsuits and personal investigations of agency officials—into granting Scientology tax-exempt status as a church in 1993. What does it tell you that even back then, some unelected folks in California had more power than members of the U.S. Congress do today as they attempt to investigate the IRS—for using targeting tactics to intimidate people.

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March 30, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Sunday, March 29, 2015

The IRS Scandal, Day 689

IRS Logo 2Politico, From IRS: 'Death by Delay':

Nearly two years after the IRS was exposed for improperly sidetracking requests for tax exemptions from tea party groups, POLITICO has learned that at least a half-dozen conservative applicants are still waiting for an answer.

This challenges repeated assertions by IRS Commissioner John Koskinen that his embattled agency has “completed” a set of recommendations to fix the problem and address a backlog of nearly 300 applications, some of which had been pending already for three years.

The groups that are still waiting include Karl Rove’s giant Crossroads GPS, which spent at least $26 million against Democrats in the last election cycle. But most of the half dozen are mom-and-pop outfits from New Mexico to New Jersey, run by volunteers out of their own houses and operating at a fraction of Crossroads’ budget.

The years-long delay has gutted these groups’ membership, choked their ability to raise funds, forced them to reserve pots of money for possible back taxes and driven them into debt to pay legal bills. ...

The agency said it cannot comment on specific cases, but it deflected blame, in part, to the Justice Department. When an applicant is suing the IRS, Justice also has a say in whether to issue a final ruling during litigation. Almost all the groups in limbo have taken the IRS to court.

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March 29, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Saturday, March 28, 2015

The IRS Scandal, Day 688

IRS Logo 2Forbes, House Considers Bill To Stop IRS Targeting, Fire IRS Employees Who Do, by Robert W. Wood:

The House Committee on Ways and Means is busy with a bill that could change the IRS. H.R. 709, the Prevent Targeting at the IRS Act, calls for firing IRS employees who take certain official actions for political purposes. The fact that such a bill has been introduced makes you wonder. Isn’t that the law already? Not really.

Everyone wants to feel secure that they will be dealt with fairly by the IRS. The tax system is full of special rules, and no one can master them all. Thus, one taxpayer may be treated very differently from another who is seemingly in the same position. That probably isn’t fair, but don’t confuse this with fundamental procedural fairness and non-discrimination. That is at the heart of the IRS targeting debate, and why the issue is so terribly important to the tax system as a whole. ...

The proposed law would expand the scope of the violation concerning an IRS employee threatening to audit a taxpayer for the purpose of extracting personal gain or benefit. It would also cover an IRS employee who threatens to audit someone for political purposes.

The proposal requires the IRS to terminate an employee who, for political purposes or personal gain, undertakes official action with respect to a taxpayer or, depending on the circumstances, fails to do so, delays action or threatens to perform, delay or omit such official action. An ‘official action’ here would include an audit or examination.

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March 28, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, March 27, 2015

The IRS Scandal, Day 687

IRS Logo 2Town Hall, Congress Should Protect the Fair Treatment for All Donations:

Beginning in 2010, the Internal Revenue Service (IRS) systematically targeted taxpayers based on their political beliefs. Unaccountable, unelected bureaucrats at the IRS deliberately slowed and denied applications for tax-exempt status because the applicants did not share their politics. Although it’s deeply concerning that unelected, unaccountable bureaucrats at the IRS were using the tax code to restrict free speech, what’s more unfathomable is that Congress has done very little to date to protect individuals from future IRS targeting.

Congress should act to protect citizens of all political persuasions from similar politically-motivated targeting in the future. Thankfully the House Ways and Means Committee is currently working on legislation that would help. The bill prohibits the IRS from applying the federal gift tax to contributions to tax-exempt organizations.

The original intent of the federal gift tax was to stop taxpayers from sidestepping the federal death tax—i.e., transferring gifts of money while an aging taxpayer is still alive instead of paying a 40 percent tax on the entire estate after death. Congress did not enact the gift tax to apply to contributions made to tax-exempt organizations.

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March 27, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, March 26, 2015

The IRS Scandal, Day 686

IRS Logo 2National Journal, There's an IRS Investigation That's Bipartisan and Leak-Free. Really.:

The Senate Finance Committee's investigations team is highly caffeinated.

How else could it have gotten through more than a million pages of documents in the last two years? There is an art to the kind of mind-numbing digging that these sleuths do. They set weekly goals for the number of pages reviewed, but they build in time for breaks. The Republican lead investigator tries to make sure her team spends only half its days in document-review mode and the other half doing something else. Every discovery must be fact-checked; the most important goal is to be as meticulous and thorough as possible, no matter how long it takes.

Welcome to the only bipartisan investigation of the Internal Revenue Service in town. The group consists of roughly half a dozen staffers from both Chairman Orrin Hatch's committee roster and that of ranking member Ron Wyden. They have become chummy over the last few years. Republican and Democratic aides meet regularly to share "hot docs" and observations from their individual perusals. As one aide put it, "There's no 'hide the ball' going on."

The goal of the investigation is to reach a common understanding of the facts, which is no small endeavor when it involves one of the highest-profile scandals of the Obama presidency. If IRS officials did actually subject tea-partiers' tax-exempt applications to questionable scrutiny, that is an intolerable breach of public trust, said Hatch and then-Chairman Max Baucus in a 2013 joint letter to the IRS. Hatch was the committee's ranking member at the time, and that letter launched the investigation. Wyden took over the project when Baucus stepped down last year to become the U.S. ambassador to China.

Democrats and Republicans definitely don't agree about whether there was a political conspiracy at work in the IRS before the 2012 elections. Those kinds of conclusions are matters of interpretation and ideology that have derailed other congressional investigations that attempted to include Democrats.

To keep away from such incendiary questions, investigators on the Finance Committee have pledged to focus solely on what happened. Did the IRS selectively subject certain groups based on their political orientation to additional scrutiny when they requested tax-exempt status? What words or phrases did IRS staff look for when determining which applications would be pulled for additional review? Did that strategy violate internal policy? Was the White House involved?

Since the investigators' primary goal is to keep Republicans and Democrats at the table, they work hard to keep politics out of it. ...

The Finance Committee's report will be a different animal, aides from both parties say. They are examining the same questions that others have probed, but they aim to be seen—if such a thing is even possible on Capitol Hill—as completely objective in their conclusions. Something obviously went awry at the IRS. They want to give the public specifics about what it actually was.

Hatch and Wyden plan to offer their staff's findings of IRS misconduct together and (hopefully) free of political statements. That will happen later this year, barring any unforeseen developments. Staffers say the bulk of the report will consist of the facts on which both sides have agreed and the conclusions they have jointly drawn.

But bipartisanship can only go so far. After the joint conclusions, each side will then release its own views about what those agreed-upon facts mean—separately.

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March 26, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Wednesday, March 25, 2015

The IRS Scandal, Day 685

IRS Logo 2American Thinker, Why Does Media Matters Deserve Tax Exempt Status When They're Cheerleaders for Hillary?:

Last week, the Democratic party website Media Matters hired long time Clinton family friend and advisor James Carville to write for the site. This is just the latest in a series of moves made by the Democratic party organ to boost the candidacy of Hillary Clinton.

But, as the Washington Examiner points out, Media Matters is a tax exempt organization, prohibited by law from engaging in political activity. The site is run by another Clinton confidante, David Brock, and the website hasn't been shy about defending Mrs. Clinton in this latest scandal over her emails. ...

When it was revealed that the IRS and Lois Lerner were targeting conservative groups because of their alleged political activity, the left defending the IRS because they were "only doing their jobs." No one with half a brain believes that Media Matters is a non-partisan, apolitical outfit not interested in who wins the Democratic primary or the general election. Unlike most Tea Party groups who applied for the 501(c)(3) designation,whose "political advocacy" was limited to demanding the government follow the Constitution, Media Matters blatantly supports Democratic party candidates, goals, issues, and objectives.

Where is Lois Lerner when you need her...

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March 25, 2015 in IRS Scandal, Tax | Permalink | Comments (3)

Tuesday, March 24, 2015

The IRS Scandal, Day 684

IRS Logo 2Forbes, Report Says Former IRS Employees -- Think Lois Lerner -- Can Still Peruse Your Tax Returns, by Robert W. Wood:

Could Lois Lerner still take a look at your tax returns on IRS computers? It sounds preposterous, but a new watchdog report says former IRS employees still have access to IRS computer systems long after they have no official business with the information. The report is by the U.S. Government Accountability Office, an independent, nonpartisan agency that works for Congress. The GAO investigates how the federal government spends taxpayer dollars. In the case of IRS security, the report says not well.

This report cites significant deficiencies in the security of IRS financial reporting systems. Millions of Americans who are legally required to file taxes are fearful about fraud. The report says the IRS needs to continue improving controls over financial and taxpayer data. In the case of former IRS workers with continuing access to IRS data systems, they need to be cut off.

One co-author of the report said the IRS horde of taxpayer data can be used by identity thieves. The timing couldn’t be worse for the IRS. The IRS is failing to secure its massive computer systems, leaving private taxpayer data vulnerable to fraudsters and hackers, the new report from the GAO reveals.

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March 24, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Monday, March 23, 2015

The IRS Scandal, Day 683

IRS Logo 2Forbes, Should IRS Have Guns? How About Email?, by Robert W. Wood:

How would you like seeing gun-toting IRS Agents at your door? In comparison, a correspondence audit doesn’t sound so bad. Only the Criminal Investigation Division of the IRS gets to carry guns, and they say they need them. The IRS has a hard job to do, and being charged with collecting taxes isn’t easy. Yet some people are extra worried about having this already very powerful organization waving weapons around. ...

You might feel especially queasy about the IRS having guns given all the ‘smidgens of corruption’ talk of the last two years. They can’t seem to even hang on to emails. People are more disillusioned about the IRS today than in the past. With all those lost Lois Lerner emails, her hard drive crashed, and there was nothing backed up? Well, not exactly.

In Hearings of the Committee on Oversight & Government Reform on February 26, 2015, J. Russell George, the Treasury Inspector General, said he is investigating possible criminal activity at the IRS. The hearings also revealed the fact that investigators have recovered another 32,000 emails relating to Lois Lerner. Yet even that wasn’t the most disturbing revelation. ...

House Members were told that the IRS had not even asked for the backup tapes when the ‘hard drive crash’ excuse was first used. That contradicted the prior testimony of IRS Commissioner John Koskinen. He had testified to the effect that recovery efforts had been thorough, and that the tapes couldn’t be accessed. The IRS claims to have spent $20 million responding to congressional inquiries, producing documents and providing agency officials to testify at hearings.

It now appears that no one may have asked, which almost sounds like the Keystone Cops. Rep. John Mica, R-Fla., said, “It looks like we’ve been lied to, or at least misled.” Treasury Deputy Inspector General Timothy Camus said, “We recovered quite a number of emails, but until we compare those to what’s already been produced we don’t know if they’re new emails.”

Mr. Camus said it took investigators only two weeks to locate the computer tapes, and about four months to find Ms. Lerner’s emails on the tapes. Several Oversight Committee Members questioned how diligent the IRS had been, given how quickly the investigators now were able to find them. Yet an IRS statement repeats the tax agency’s full cooperation. It has not been inexpensive.

With all of the controversy facing the IRS and the tax system these days, it can seem doubly scary to contemplate tax collectors being armed.

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March 23, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)