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Sunday, July 13, 2014

The IRS Scandal, Day 430

IRS Logo 2Washington Post:  More IRS Smidgens Show Up. ‘Perfect.’, by Ed Rogers:

Anyone paying attention to the Internal Revenue Service scandal has been waiting for the next smidgen to drop. Well, two more hit pretty hard this week. At the president’s next encounter with the media, I will scream collusion if no one asks him for his exact definition of a “smidgen,” and if he thinks he has seen a smidgen of corruption yet. At this point, only the most gullible or culpable can continue to claim there is no compelling evidence in this case. Given the delays, lies and stonewalling, there is no viable argument against a special prosecutor.

In a stunning revelation this week, it was disclosed that former IRS official Lois Lerner told colleagues, “we need to be cautious about what we say in emails” and then proceeded to ask the IRS IT department, in an e-mail, “if [instant messaging] conversations were also searchable.”  When she was told they were not, she e-mailed back, “Perfect.” This is a smoking gun e-mail in that it makes plain she had a cover-up in mind. There is no other plausible explanation. ...

[A]s long as Lerner stays cool and the Obama Department of Justice has her back, the administration obviously thinks it can run out the clock on this scandal. But these revelations are definitely meaningful smidgens. At what point does a flock of smidgens become irrefutable evidence that deserves an independent examination?

Judicial Watch press release:

Judicial Watch announced today that on June 17, 2014, it filed a Freedom of Information Act (FOIA) lawsuit against the Department of Justice (DOJ) seeking the number of hours DOJ Attorney Barbara Bosserman expended in the investigation of the IRS targeting of conservative organizations seeking tax exempt status during the 2010 and 2012 elections cycles (Judicial Watch v. U.S. Department of Justice (No. 1:14-cv-01024)).

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July 13, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, July 12, 2014

The IRS Scandal, Day 429

IRS Logo 2Wall Street Journal editorial:  Judging the IRS: A Pair of Court Orders Seek Answers About the Vanishing Emails:

Congress has been working for more than a year to get to the bottom of the IRS political targeting scandal, and the Obama Administration has resisted across the board. So hurrah to the judicial branch, which this week stepped into the fray with orders that could force the IRS to start coughing up some answers.

U.S. District Judge Emmet G. Sullivan on Thursday ordered the IRS to provide for him, within a month, a sworn declaration explaining how the agency came to lose two years' worth of email belonging to former Director of Exempt Organizations Lois Lerner. Judge Sullivan also assigned a federal magistrate, John Facciola, to conduct his own query into whether Ms. Lerner's emails might be obtained by other means. The order suggested that Judge Sullivan was far from satisfied with the IRS's cursory explanations of crashed hard drives and irretrievable information.

On Friday a second federal judge, Reggie B. Walton, issued another order, demanding the IRS provide under oath an affidavit outlining what happened to Ms. Lerner's hard drive, the qualifications of anybody who attempted to retrieve her lost email, and the status of the IRS Inspector General's investigation into these issues. Judge Walton gave the IRS one week to respond.

Now we're getting somewhere. The IRS has slow-rolled document production for Congress and then it waited two months to tell its legislative overseers that Ms. Lerner's emails had vanished. The Justice Department and FBI, meanwhile, have leaked to the press that their probes have found nothing wrong.

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

Friday, July 11, 2014

The IRS Scandal, Day 428

IRS Logo 2Wall Street Journal:  U.S. Judge Orders IRS to Explain How it Lost Lerner’s Emails:

A federal judge on Thursday ordered the Internal Revenue Service to explain how it lost two years’ worth of a former official’s emails, and tapped a magistrate judge to find out whether the documents can be obtained from other sources.

At a hearing in a conservative group’s lawsuit, U.S. District Judge Emmet Sullivan gave the IRS until Aug. 10 to provide a sworn declaration explaining how the email loss occurred. The IRS previously has said that the emails were lost because the top agency official’s computer crashed in 2011, and backup tapes were routinely reused after six months.

Wall Street Journal:  Lerner's 'Perfect' Plan for IRS Emails: The Tax Official Warned Colleagues About Creating Electronic Records:

Less than two weeks after the IRS inspector general had circulated a draft report on the agency's unlawful targeting of conservative groups, Ms. Lerner reached out to IT specialist Maria Hooke to inquire about IRS record-keeping of internal communications. Ms. Lerner wrote:

"I had a question today about OCS [Microsoft Office Communications Server]. I was cautioning folks about email and how we have several occasions where Congress has asked for emails and there has been an electronic search for responsive emails – so we need to be cautious about what we say in emails. Someone asked if OCS conversations were also searchable – I don't know, but told them I would get back to them. Do you know?"

Ms. Hooke responded that individual employees could choose to save their communications, but that the software was not set to automatically save any messages.

Ms. Lerner's response: "Perfect."

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July 11, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, July 10, 2014

The IRS Scandal, Day 427

IRS Logo 2New York Times, Republicans Say Ex-I.R.S. Official May Have Circumvented Email:

Lois Lerner, the former Internal Revenue Service official at the center of an investigation into the agency’s treatment of conservative political groups, may have used an internal instant-messaging system instead of email so that her communications could not be retrieved by investigators, Republican lawmakers said Wednesday.

The accusation against Ms. Lerner, the former head of the agency’s division on tax exemption, came nearly a week after the I.R.S. gave investigators thousands of her emails, including some that were destroyed when her hard drive crashed in 2011 but were recovered from the accounts of people with whom she had corresponded.

The Republican lawmakers said that in one of those email exchanges — which took place in the spring of 2013, just days after the Treasury Department’s inspector general concluded in a report that agency officials had treated conservative groups improperly — Ms. Lerner asked another official whether messages sent over the instant-messaging system were recorded. When she was told that they were not, she responded, “Perfect.”

Republican lawmakers interpreted that response as an expression of relief.

“Ms. Lerner says, ‘Wow, I know I’ve gotten rid of the emails when the computer crashed two years earlier, but I’d better double check on this intraoffice instant-messaging capability we have at the Internal Revenue Service,’ and she says ‘perfect’ when she learns that it’s not traceable, not trackable, not stored,” Representative Jim Jordan of Ohio said during a hearing of a House oversight subcommittee.

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

Wednesday, July 9, 2014

The IRS Scandal, Day 426

Tuesday, July 8, 2014

The IRS Scandal, Day 425

IRS Logo 2New York Post editorial:  Audit the IRS!:

True the Vote has an idea that is the fantasy of every taxpayer who’s ever found himself sitting opposite an imperious tax collector: Audit the IRS.

On Thursday, the IRS will have to persuade federal Judge Reggie Walton why this shouldn’t happen.

True the Vote calls itself “the nation’s largest nonpartisan, voters’ rights and election integrity organization.” It is one of the conservative outfits whose application for nonprofit status was targeted by IRS authorities. And in its motion asking for an outside specialist in data recovery to be permitted to conduct a forensic audit into the lost Lois Lerner e-mails, True the Vote makes an eminently reasonable case:

“Even if the ill-timed hard drive ‘crash’ was truly an accident, and even if the IRS genuinely believes that the e-mails are ‘unrecoverable,’ the circumstances of the spoliation at issue cry out for a second opinion,” reads the motion.

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

Monday, July 7, 2014

The IRS Scandal, Day 424

IRS Logo 2New York Times editorial: The Real Internal Revenue Scandal:

There is a scandal going on at the Internal Revenue Service, but it has nothing to do with Lois Lerner or her missing emails. House Republicans have not given up on their noisy crusade to tie Ms. Lerner to what they imagine to be widespread political corruption within the Obama administration, but all they have proved is that the I.R.S. is no better at backing up its computer files than most other government agencies.

No, the real scandal is what Republicans did to cripple the agency when virtually no one was looking. Since the broad Tea Party-driven spending cuts of 2010, the agency’s budget has been cut by 14 percent after inflation is considered, leading to sharply reduced staff, less enforcement of the tax laws and poor taxpayer service.

As the economist Jared Bernstein noted recently in The Washington Post, a weakened I.R.S. enforcement staff will be unable to make a dent in the $385 billion annual gap between what taxpayers owe and what they pay — an unintended tax cut, mostly for the rich, that represents 11 percent of this year’s spending.

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July 7, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Sunday, July 6, 2014

The IRS Scandal, Day 423

IRS Logo 2Arizona Republic editorial:  Grant Lois Lerner Immunity in IRS Case:

Congress is facing a fork in the road in the Internal Revenue Service's tea party-harassment scandal.

It may have to take both. 

But, first, Republicans in the House must come to terms with a decision they really — really — do not wish to make.

They will have to offer immunity from prosecution to Lois Lerner, the IRS retiree who has refused to testify and whose emails so amazingly disappeared when her computer hard drive crashed.

And if they fail to get to the bottom of the IRS shenanigans through Lerner? Well, there is a Plan B. They can appoint a special prosecutor — and accept all the expense and power-wielding baggage that comes with such an appointment.

Following the contempt-dripping theatrics of IRS Commissioner John Koskinen, the GOP lawmakers have no choice but to take one or both of those dramatic steps. ... Lerner, of course, has been no more willing to get to the bottom of events than Koskinen. Or, for that matter, the Justice Department, whose own half-hearted investigation is languishing ... somewhere. Or, for that matter, the White House, which simply could order agencies that may have communicated with Lerner, et al, to cooperate.

Their determined resistance is beginning to tell its own suspicious story. If Lerner dodges Congress again, despite immunity, there is always the special prosecutor route. It may be the only way to make sure this episode is never repeated, by administrations of either party.

Above the Law, Some Thoughts About the IRS Scandal and Spoilation of Evidence:

On Tuesday, U.S. District Judge Reggie Walton issued an order to hear oral arguments from lawyers representing the Internal Revenue Service and the conservative nonprofit True the Vote. True the Vote is one of the conservative groups claiming IRS improperly targeted its application for nonprofit status based on the group’s political and philosophical affiliation. True the Vote filed a motion for a preliminary injunction and expedited discovery on Monday, calling for an independent forensics examination of any IRS hard drives, servers, or other computer hardware involved in the government agency’s possible targeting of conservative nonprofits’ applications for tax-exempt status. It wants an outside computer expert to try to ascertain how and when any electronic evidence, such as former IRS Commissioner Lois Lerner’s emails, may have been lost. Also, it would be great if the government didn’t spoliate — I mean “recycle” — any more evidence….

In its motion, True the Vote argues that the law obligated the IRS to preserve potentially relevant evidence, including electronically stored information. The IRS knew that the hard drives and emails of Lerner and other officials were of significant legal interest. By the time the agency supposedly began disposing of Lois Lerner’s computer hardware, Congress was publicly investigating the IRS scandal. Pro-Israel group Z Street, Inc. filed suit in August 2010, alleging similar improper targeting as True the Vote claims. In September 2013, True the Vote itself sent a litigation hold letter to counsel for the IRS officials, including Lerner, who the group believed were involved in IRS wrongdoing. The government clearly had notice that the computer equipment and information should be preserved as potential evidence.

If the account alleged in True the Vote’s motion is accurate, opposing counsel was none too cooperative. Despite earlier attempts to confer with IRS counsel, attorneys for True the Vote did not learn of the missing emails of Lois Lerner and other IRS officials until Friday, June 13, 2014, when news reports publicized the loss. On that day, IRS finally informed Congressional investigators that the agency could not recover two years’ worth of Lerner’s emails. Apparently, Lerner’s hard drive crashed in 2011, its data was unrecoverable, and the government had no available back-ups.

Talk about bad luck — finding out on Friday the 13th that two years’ worth of emails spanning the time period when you believe the federal government committed illegal acts have been “lost.”

Of course, it is hard to believe in bad luck when federal-government malfeasance is involved. Did IRS officials violate True the Vote’s constitutional rights by improperly singling out their application for tax-exempt status as the conservative group claims? Was this politically motivated targeting the result of overzealous lower-level employees? Did members of the Obama administration orchestrate this campaign to punish the administration’s political enemies? We don’t know. That’s the kicker about the spoliation of evidence.

IRS explanations of how Lerner’s emails during the crucial time period were lost have not inspired much confidence, under the circumstances. Perhaps the only reason to believe that the IRS and Obama administration are telling the truth about the lost evidence and the IRS scandal is that their explanations look so extraordinarily — almost laughably — suspicious that someone would have to have “courage” the size of the U.S. Treasury to claim such things with a straight face.

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

Saturday, July 5, 2014

The IRS Scandal, Day 422

IRS Logo 2Fort Wayne Telegram:  Federal Government Email From the Inside, by Richard Greene:

Since senior federal official Lois Lerner and I served together in the Bush Administration, surely she must have received the same sort of regular briefings about using the government’s email system as I did. ...

I was told that anything I did with my computer or Blackberry device would result in a permanent record being created. Only classified communications would be encrypted, and all the rest would be discoverable in any legal proceedings. That record would be available to virtually anyone but especially useful to Congress or the Justice Department in the event of their need to examine electronic communications dealing with public affairs.

Any notion that I could just erase something after it had been sent was conclusively dashed when the hard drive inside my desktop computer in my office crashed. The tech guy came in, quickly removed the drive and told me he would try to fix it. I explained to him that my concern was that all my data, including email that I often searched through, was on that drive and could be lost.

His reply was to assure me that every stroke of my keyboard had been backed up multiple times in the local office and off site as well, and nothing would be lost. If he couldn’t fix the drive he had removed, he would simply set up a new one and transfer everything that was there from the moment it failed and it would be completely restored.

Maybe my experience is why the latest polls are finding about 75 percent of the American people believe Congress should keep investigating what happened to Lerner’s emails.

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July 5, 2014 in IRS News, IRS Scandal | Permalink | Comments (0)

Friday, July 4, 2014

The IRS Scandal, Day 421

IRS Logo 2Wall Street Journal: House Lawmakers Press on IRS Probe:

House lawmakers are planning to step up pressure on the Justice Department to act on a contempt-of-Congress citation against former Internal Revenue Service official Lois Lerner.

Legislators view the citation—passed by the House in May—as a potential pressure point in their broader efforts to force action by the Justice Department in the controversy concerning IRS treatment of conservative tax-exempt organizations, committee aides said. ...

Federal law says the local U.S. attorney has the "duty" to present the contempt citation to a grand jury. Contempt of Congress is a misdemeanor punishable by a fine of up to $100,000 and a year in prison, under an 1850s statute. Republicans on the committee note the statute in demanding that prosecutors pursue the case.

But "it remains unclear whether the 'duty' of the U.S. Attorney…is mandatory or discretionary," a Congressional Research Service report says. Courts generally grant prosecutors wide discretion in deciding which matters to pursue.

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July 4, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, July 3, 2014

The IRS Scandal, Day 420

IRS Logo 2Forbes:  The Time Has Come: Defund The IRS, by Steve Forbes:

The current IRS scandals are now bigger than those of Watergate in the 1970s and Teapot Dome in the 1920s. The most powerful and feared government agency was turned loose on groups of citizens who the White House and congressional Democrats felt threatened their power. President Franklin Roosevelt used the IRS against opponents, as did Presidents John Kennedy, Lyndon Johnson and Richard Nixon. Conservative think tanks were rightfully suspicious they were being singled out for tax audits during the Clinton Administration. But none of those abuses was of the sweeping nature of the ones that began in 2010 and have taken place against ordinary citizens who have spontaneously come together in countless organizations to fight the current regime’s egregious policies and threats to liberty.

[Defenders of liberty, especially Republicans, should seek to defund] almost all of the IRS after the midterm elections, which the Democrats will lose badly. There can be no more continuing resolutions that allow the tax-collection agency to operate business as usual, even though Congress hasn’t passed an appropriations bill. If a continuing resolution is necessary to avoid a government shutdown, then by all means pass one–but specifically do a near-zeroing-out of the IRS (the only exception would be a handful of clerks to process refunds) until these scandals are fully and credibly investigated. If the President vetoes such a budget resolution, the onus is on him, not Congress.

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July 3, 2014 in IRS News, IRS Scandal | Permalink | Comments (1)

Wednesday, July 2, 2014

The IRS Scandal, Day 419

IRS Logo 2Wall Street Journal:  Judge Sets Hearing on Group's Push to Investigate Lost IRS Emails:

A federal judge scheduled a hearing for next week on a grass-roots conservative group's request to investigate missing emails at the Internal Revenue Service, as part of the group's lawsuit against the agency.

U.S. District Judge Reggie Walton ordered the hearing on Tuesday, after conservative group True the Vote filed a motion seeking to speed up discovery and "preserve and prevent further destruction" of documents and electronic data. Among other things, the group wants a forensic expert to figure out how the emails were lost and examine whether any of the missing data can be recovered.

The hearing is set for July 11 in U.S. District Court in Washington, D.C.

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

Tuesday, July 1, 2014

The IRS Scandal, Day 418

Monday, June 30, 2014

The IRS Scandal, Day 417

IRS Logo 2Tax Analysts Blog:  Lost Lerner E-mails Latest Example of IRS Death Wish, by Jeremy Scott:

Democrats rushed to Koskinen’s defense. That is, perhaps, understandable, even though much of what the IRS has done during this scandal is indefensible. Democrats probably want to defend their president’s pick to head the IRS, and maybe they want to try to change the narrative heading into a potentially disastrous midterm election. But the reality is that the IRS isn’t doing them any favors. There’s only so much incompetence and disingenuous behavior that can be run through a political spin machine. The Democrats’ reflexive defense of Lerner (whose conduct can’t be excused) and their apparent willingness to accept any explanation from Koskinen (who didn’t even try to adequately explain why he hid information on the lost e-mails from February until late June) is baffling. Democrats weakly attempted to paint the GOP as on a witch hunt for a conspiracy, as though the IRS’s mismanagement and appearance of bias weren’t enough to justify congressional inquiry.

Is there a conspiracy or coverup? Christopher Bergin eloquently explained why it’s hard to know and why that doesn’t matter because tax administration has been damaged either way. And that’s the key point. Lerner, former acting Commissioner Steven Miller, and many other officials have engaged in conduct that might have irreparably harmed the Service’s reputation on Capitol Hill and that once again undermined the public’s trust in the nation’s tax collector. And Democrats’ desperate attempts to rush to the president’s defense to limit the damage to their party’s electoral chances will not fix that problem. Instead, the solution will take serious soul-searching at the IRS and a commitment to being genuinely open and transparent with lawmakers and taxpayers.  

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June 30, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Sunday, June 29, 2014

The IRS Scandal, Day 416

IRS Logo 2Tax Analysts Blog:  The IRS Has Been Set Up, by Christopher Bergin:

The IRS’s job is to collect taxes, and historically it’s been pretty darn good at that. But over the years, Congress has tasked the Service with many things that really have nothing to do with collecting revenue. ... So let’s have the IRS administer the healthcare system. Anybody want to hazard a guess about how that’ll go? ...

And that brings us back to section 501(c)(4), through which the IRS has been charged with regulating a part of the political fundraising process. This involves making precise calculations of the amount of political activity engaged in by social welfare organizations seeking tax-exempt status. How is the IRS supposed to determine that? And now added to this paradigm, apparently, is the political pressure being put on the IRS. So if a Democrat is in the White House, all conservative organizations are bad. And when a Republican is in the White House, I’m betting the heat will be on the IRS to determine that all liberal organizations are bad. Is that how this works?

I don’t know if the IRS has been politicized. Until recently that possibility would have been unthinkable. But the potential of the 501(c)(4) rules to be a setup for the politicization of the IRS is enormous. You simply can’t have the tax collector refereeing the people who provide it with its budget. It’s understandable – although, I think, shortsighted – that the Republicans want to starve the beast for its lack of transparency in the investigation of how it handled social welfare organizations. But the beast (and I don’t believe the IRS is a beast) is in real trouble now.

Section 501(c)(4) should be repealed immediately, and the IRS should be tasked with doing its job: collecting taxes. What are the odds that politicians will do that? Nil, because they’re the only ones benefiting from this mess.

But we are where we are, and I am truly worried. If this agency has been politically corrupted, it will not be able to function. And that leaves us with a question. Who's going to collect the revenue? 

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June 29, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, June 28, 2014

The IRS Scandal, Day 415

IRS Logo 2Tax Update Blog:  Why Did Lois Lerner Work at the IRS?:

This question came to mind in discussing the Lerner emails with a reader, who noted how a Politico piece about the Grassley email chain revealed this week pointed out this high-level IRS leader’s evident lack of tax skills:

Former ex-IRS tax exempt division chief Marcus Owens said the email chain shows Lerner knew very little about tax law, as there would have been nothing wrong with Grassley and his wife attending such an event, so long as the income was reported. It is nothing that rises to the level of referral for examination,” Owens said.

It is a mystery.  Her Wikipedia biography shows that she was a cum laude graduate of Northeastern University and the Western New England College of Law.  She worked as a high-level attorney at the Federal Election Commission, but moved to IRS as “Director Rulings and Agreements” in the exempt organizations branch of the IRS.  She rose to Director of Exempt Organizations in 2006.

Her resume, then, is that of a bureaucrat, rather than a tax practitioner or specialist.  She apparently never practiced tax law before moving into her important policy position — important in the tax world, anyway.

This sort of thing may be common in the federal bureaucracy.  It’s likely that she got a raise for the move, or something.  But it seems that while you could take the girl out of the FEC, you couldn’t take the FEC out of the girl.  She took it upon herself to monitor the electoral process with the tools of the tax law.

Megan McArdle explains why that was a bad idea:

This exchange suggests that Lois Lerner not only didn’t have a good, basic grasp of the tax law she was supposed to be administering, but also viewed her job as an extension of her work at the Federal Election Commission.

That’s not what the IRS is for. The IRS is not given power over nonprofit status in order to root out electoral corruption or the appearance of it. It is given power over nonprofit status in order to make sure that the Treasury gets all the revenue to which it’s entitled

Unfortunately, politicians see the tax law as the Swiss Army Knife of public policy, and it’s unsurprising that an IRS bureaucrat would see it the same way.

Moreover, Lerner’s overbroad instincts also seemed to kick into high gear when Republican politicians were involved. Of course, such reports might well be survivor bias — Republicans are complaining about Lerner, while Democrats who also had run-ins with her may be keeping quiet for fear of fueling the fire. At this point, however, the fire is burning merrily on its own. If Democrats who encountered Lerner’s overzealous use of her powers are out there, they’d do well to come forward and tell their stories to reassure Americans that even if her actions were overbroad, they weren’t broadly partisan.

They would have emerged by now.  The stats, as we noted yesterday, demonstrate one-sided enforcement.

Chart

It’s unlikely that Ms. Lerner came to the IRS with the idea of using her position to harass the opposition.  She just happened to be in a position to do so when applications from groups she didn’t like — perhaps that she even saw as dangerous and wrong — came across her desk.  It’s possible that she did it entirely on her own.  And that’s the scariest thing — a bureaucracy that moves on its own to squash ungoodthinkers is much more dangerous than a top-down conspiracy.  It may be hard to replace an administration, but it’s almost impossible to replace a bureaucracy.

New York Times:  Is The Times Ignoring a Scandal at the I.R.S.?:

Has The Times been interested enough in the politically charged events involving the Internal Revenue Service? Many readers don’t think so. ...

I asked David Joachim, the Washington-based reporter and editor who has written several of the I.R.S. stories, to respond to this reader and others who believe The Times has not pursued the story aggressively enough.

Mr. Joachim responded by email. He noted that reader comments on the stories show how polarized the feelings are:

One side sees a Nixonian abuse of power and cover-up; the other sees an effort to smear the White House for electoral gain in the midterms. That stuff brings out passions. ... We think we’ve paid copious attention to this story, and we will continue to do so. It’s an important story.>/em>

My take: The Times was somewhat late in beginning to cover the latest development about the lost emails. My office had begun to field several days’ worth of reader protests on the lack of attention when the first story finally went online. Despite that slow start and the quiet display of the subsequent stories (an analytical piece might have been a good choice for the front page), The Times has given its readers insightful coverage of a situation heavily clouded by partisan politics.

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June 28, 2014 in IRS News, IRS Scandal | Permalink | Comments (5)

Friday, June 27, 2014

The IRS Scandal, Day 414

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June 27, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, June 26, 2014

The IRS Scandal, Day 413

Fox News Poll:  Voters Think IRS Emails Were Deliberately Destroyed:

The consensus is: it’s no accident. More than three-quarters of voters -- 76 percent -- think the emails missing from the account of Lois Lerner, the ex-IRS official at the center of the scandal over targeting of conservative groups, were deliberately destroyed. ... That suspicion is shared across party lines, albeit to varying degrees. An overwhelming 90 percent of Republicans think the emails were intentionally destroyed, as do 74 percent of independents and 63 percent of Democrats. Overall, just 12 percent of voters believe the emails were destroyed accidentally. Another 12 percent are unsure.

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Wall Street Journal:  No Confidence: Hardly Anybody Believes the IRS's Story About Lois Lerner's "Lost" Emails, by James Taranto:

The proportion of respondents who believe the IRS's claim to have destroyed the emails accidentally: 12%. That's congressional-approval-rating territory. Seventy-six percent disbelieve the IRS story, and the remaining 12% say they're "unsure." Asked whether Congress should continue to investigate, the ayes had it, 74% to 21%. ...

Each of these developments refutes Obama's claim that there was "not even a smidgen of corruption." And if the public is right that the destruction of emails was a deliberate coverup--and keep in mind that not just Lois Lerner but six other IRS employees are said to have suffered contemporaneous hard-drive crashes--that surely qualifies as "mass corruption," even irrespective of the facts of the underlying scandal.

The Fox poll is a stunning vote of no confidence not just in the Obama administration but in the government itself. Public skepticism of government is a healthy impulse, and in this case it seems fully warranted. A government that cannot inspire even a minimal degree of public confidence is a danger to itself and to the country.

Red State:  An Intellectually Honest Media Would Ask This Question:

Ignore, for a minute, the IRS targeting of conservative groups and the erasure of seven hard drives at the IRS. Yes, ignore all that for a moment.

While the media is doing its best to avoid that subject, with difficulty, it is absolutely and willfully ignoring another IRS scandal that, had it happened in the Bush Administration, would be the lead story of every nightly newscast and above the fold on the front page of every newspaper in America.

We now know that some person or persons at the IRS intentionally and maliciously leaked confidential tax records of a non-profit organization so that gay rights activists could target the donors of the organization for harassment. We know this from the emails of the gay rights activist who obtained the records through, what he described, as “a conduit” from the IRS. He then sent the data to the gay rights group Human Rights Campaign, which then put the records online. The records contained the names and addresses of donors to the National Organization for Marriage. The IRS is not only seemingly targeting conservative groups, but is now admitting to leaking information about a conservative group so others can target their donors.

Yes, the IRS is admitting someone at the IRS did this and is paying the legal fees of the National Organization for Marriage as a result.

The gay rights activist who received and disseminated the information, Matthew Meisel, “invoked his fifth amendment right not to incriminate himself” and he would not identify his conduit.

This all raises a question an honest media would ask: why has Eric Holder refused to investigate and prosecute this?

The American media will not ask this question because the National Organization for Marriage opposes gay marriage. The donors to the group, in the media’s mind, are bigots. To the American media they deserve no protection. They are oppressors.

But an honest media that believed in equal justice under the law would have to ask the question — why will the Justice Department not investigate and prosecute those within the IRS who leaked confidential tax records to political opponents of the group.

Must we wait until a Republican administration does this?

It seems we need more than one special prosecutor to investigate the IRS and Darryl Issa should be holding hearings on this matter. The IRS is not only seemingly targeting conservative groups, but is leaking information about conservative groups so others can target their donors.

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June 26, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Wednesday, June 25, 2014

The IRS Scandal, Day 412

New York Post editorial:  The IRS Smirks:IRS Logo 2

That was quick. During a congressional hearing Monday night, IRS Commissioner John Koskinen — an attorney — asserted the IRS had done nothing criminal.

Rep. Trey Gowdy (R-SC), then asked what criminal statutes he relied on to reach that judgment. Koskinen admitted he hadn’t looked at any.

Less than 24 hours later, America’s top official for archiving federal records, David Ferriero, appeared before Congress. He said the IRS “did not follow the law.”

Not that this will have much effect on Commissioner Koskinen, as smug and imperious as any bureaucrat you will met.

Throughout these hearings, he’s come across less as a professional determined to restore the good name of the IRS than a Democratic Party hack who thinks the IRS is the victim here.

Wall Street Journal editorial:  IRS Email Jeopardy: The Agency Had a Legal Obligation to Retain the Records It Lost:

The IRS is spinning a tale of bureaucratic incompetence to explain the vanishing emails from former Tax Exempt Organizations doyenne Lois Lerner and six other IRS employees. We have less faith by the minute that there is an innocent explanation for this failure to cooperate with Congress, but even if true it doesn't matter. The IRS was under a legal obligation to retain the information because of a litigation hold.

In 2009 a pro-Israel group called Z Street applied to the IRS for tax-exempt status. When the process was delayed, an IRS agent told the group that its application was undergoing special review because "these cases are being sent to a special unit in the D.C. office to determine whether the organization's activities contradict the Administration's public policies." In August 2010 Z Street sued the IRS on grounds that this selective processing of its application amounted to viewpoint discrimination.

Under the Federal Rules of Civil Procedure and legal precedent, once the suit was filed the IRS was required to preserve all evidence relevant to the viewpoint-discrimination charge. That means that no matter what dog ate Lois Lerner's hard drive or what the IRS habit was of recycling the tapes used to back up its email records of taxpayer information, it had a legal duty not to destroy the evidence in ongoing litigation. ...

Attorney General Eric Holder won't name a special prosecutor, but there's still plenty of room for the judge in the Z Street case to force the IRS to explain and answer for its "willful spoliation" of email evidence.

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June 25, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, June 24, 2014

The IRS Scandal, Day 411

IRS Logo 2Real Clear Politics:  Halperin on IRS Scandal: If This Was A GOP Admin, "This Story Would Be A National Obsession":

Mark Halperin:  Because when any government agency, particularly one as powerful as the IRS, engages in something that even people sympathetic to the admission says looks weird and suspicious, it's incumbent on all of the national media to aggressively ask more questions. The Republicans in Congress are asking questions. I think with a different administration, one that was a Republican administration, this story would be a national obsession, and, instead, it's getting coverage here and a few other places. But it deserves a lot more questions.

Washington Post op-ed by Jonathan Turley (George Washington):

As federal agencies have grown in size and scope, they have increasingly viewed their regulatory functions as powers to reward or punish citizens and groups. The Internal Revenue Service offers another good example. Like the patent office, it was created for a relatively narrow function: tax collection. Yet the agency also determines which groups don’t have to pay taxes. Historically, the IRS adopted a neutral rule that avoided not-for-profit determinations based on the content of organizations’ beliefs and practices. Then, in 1970, came the Bob Jones University case. The IRS withdrew the tax-exempt status from the religious institution because of its rule against interracial dating on campus. The Supreme Court affirmed in 1983 that the IRS could yank tax exemption whenever it decided that an organization is behaving “contrary to established public policy” — whatever that public policy may be. Bob Jones had to choose between financial ruin and conforming its religious practices. It did the latter.

There is an obvious problem when the sanctioning of free exercise of religion or speech becomes a matter of discretionary agency action. And it goes beyond trademarks and taxes. ... When agencies engage in content-based speech regulation, it’s more than the usual issue of “mission creep.” As I’ve written before in these pages, agencies now represent something like a fourth branch in our government — an array of departments and offices that exercise responsibilities once dedicated exclusively to the judicial and legislative branches. Insulated from participatory politics and accountability, these agencies can shape political and social decision-making. To paraphrase Clausewitz, water, taxes and even trademarks appear to have become the continuation of politics by other means.

Real Clear Politics op-ed:  An Arrogant and Lawless IRS, by Michael Gerson:

Noted management expert and IRS Commissioner John Koskinen was apparently called out of retirement -- like the Ted Williams of evasive, unapologetic bureaucrats -- to destroy what is left of his agency's credibility. ...

In recent congressional testimony, Koskinen admitted that the emails were irretrievably gone; that the "backup tapes" had been erased; and that Lerner's hard drive was apparently destroyed in an aggressive act of recycling. With that settled, Koskinen expressed his "hope that the investigations ... can be concluded in the very near future."

It is a mix of arrogance and delusion that seems designed to incense Republicans. Koskinen had delayed informing Congress of the lost emails for months, even while assuring members they would be provided. "It was my decision that we complete the investigation," he said, "so we could fully advise you as to what the situation was." Translation from management-speak: We wanted to get our story straight before we advised you of anything. Koskinen complained about the breadth of subpoenas and the "piecemealing out" of information.

Translation: We will provide you what we want when we want. "Every email," Koskinen assured the House Ways and Means Committee, "has been preserved that we have." Except the ones they don't have -- and somehow snuffed out, tied to an anvil and thrown into the ocean. ...

[T]he IRS has managed to feed anti-government sentiments by inhabiting anti-government stereotypes. It has undermined respect for authority. And it doesn't seem even to understand the damage it has done.

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June 24, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Monday, June 23, 2014

The IRS Scandal, Day 410

PolitiFact:  Donna Brazile: No Conspiracy Here, IRS Targeted Liberals, Too:

Half True 2The IRS "also investigated liberal groups, groups that had progressive in their name. ... The IRS was basically looking at everybody." Donna Brazile on Sunday, June 22nd, 2014 in comments on CNN's "State of the Union." ...

Brazile is echoing comments Democrats have made for a year. But is she right and the IRS was "basically looking at everybody"?

This question was essentially answered last year by the Treasury Inspector General for Tax Administration, who investigated the IRS’s handling of tax exempt requests between 2010 and 2012. ...

The investigation ultimately found the Cincinnati office used inappropriate criteria to single out certain cases. Over the course of two years, 298 total cases were sent to D.C. for greater scrutiny. According to the investigation, 72 of those groups had the name "tea party," 13 had "Patriot" and 11 had "9/12." The other 202 cases were listed as "other." In 160 of these cases, the application remained open between 206 and 1,138 days, while 108 were approved.

Democrats said 202 is a lot of "other." And later it came out that the word "progressive" was also used to flag applications on another IRS "Be on the Lookout" list.

George also noted that while 16 groups with "progressive" in the name showed up among the 298 cases, that represented just 30 percent of all "progressive" applications. That is in stark contrast to groups with "tea party," "patriot," or "9/12" in their name, of which 100 percent saw their applications held up. ...

So some progressive and liberal groups may have been flagged, and others may have ended up getting swept in the searches run by the Cincinnati office because their names had certain buzz words or phrases, but they didn’t get put through the ringer, at least on par with tea party groups.

Our ruling

Brazile, who did not respond to an email, said the IRS was "looking at everybody" including liberal groups and progressive groups. Yes, some progressive groups did have their tax-exempt status applications flagged as the IRS reviewed whether nonprofit groups were engaging in political activities.

But it wasn’t to the same degree as tea party and other conservative groups, nor did it result in the same actions. The list targeting tea party groups resulted in delayed processing that in some cases lasted almost three years and inquiries into their donors. Further, the inspector general found tea party groups were systematically singled out as part of an office-wide effort, while progressive groups were not.

Weighing all of this, we rate Brazile’s comments Half True.

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June 23, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Sunday, June 22, 2014

The IRS Scandal, Day 409

IRS Logo 2Tax Analysts Blog:  The Coverup Is Usually Worse Than the Crime, by Christopher Bergin:

[D]o we have a coverup at the IRS? Has a crime been committed? I don’t know. What I do know is that I am deeply disturbed by all this.

Maybe it’s just sloppy record-keeping, which would be bad enough. Most of the government’s business is now conducted digitally, and those records need to be properly handled. Or is it worse? Is the IRS deliberately keeping things from the public? Excuse my cynicism, but the IRS’s penchant for secrecy is what led Tax Analysts, using the new Freedom of Information Act, to sue the agency in the 1970s to force it to release private letter rulings. There have been several subsequent lawsuits to pry records that should have been public out of the agency’s hands. ...

[T]he real problem here is that the IRS can’t make this story go away, and that starts smelling like a coverup. I know tax professionals who are now starting to think the worst and who are having trouble getting behind the IRS. And I am one of them. ...

The exempt organization issue is now more than just fodder for conservative blogs. The IRS and the Treasury Department need to start being square with the American people and their Congress. Even if you hate the IRS -- and I do not -- a wounded and compromised tax collector (whether or not most of its wounds are self-inflicted) does no good for the country.

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

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June 22, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, June 21, 2014

The IRS Scandal, Day 408

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June 21, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, June 20, 2014

The IRS Scandal, Day 407

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June 20, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, June 19, 2014

The IRS Scandal, Day 406

IRS Logo 2PrawfsBlawg:  IRS: "Sorry, Can't Produce" or a Bad Example of Hiding the Ball?, by Naomi Goodno (Pepperdine):

If this issue arose in federal court, under FRCP 26, parties are required at the outset to submit a "discovery plan" that includes how electronically stored information ("ESI") will be retained and exchanged in order to prevent unnecessary expense and waste. The FRCP requires the parties to take reasonable steps to preserve relevant ESI (a litigation hold) or face possible sanctions. Under Rule 37's so-called safe harbor provision, however, "absent exceptional circumstances, a court may not impose sanctions ... for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system." The IRS is hanging its hat on this safe harbor rule by arguing that, despite a good-faith effort, the emails were lost. Did the IRS, in fact, make a good faith effort?

While there is confusion among the courts on how to apply the good faith standard, there is precedent for a court to monetarily sanction the IRS if the court found that the IRS acted negligently when it lost the emails. The court would also have the authority to issue an adverse inference instruction (inferring that the lost evidence would have negatively impacted the IRS's position), if it determined that the IRS acted grossly negligent or willful.

An important fact which will probably be discussed during the next few hearings is whether the IRS violated its own electronic information retention policy. The IRS was put on notice of the investigation last year, and so had a duty to put a litigation hold on the emails at that time (the very essence of what "good faith" means). It seems that the general IRS retention policy of ESI was six months (although now it is longer), but emails of "official record" had to have a hard copy which would never be deleted. Whether these emails constituted an "official record" is hard to determine since Lerner won't testify to their content.

Even assuming the emails were lost before a litigation hold could be placed (or despite a litigation hold being in place), at the very minimum, it seems "good faith" means that the IRS should have notified Congress in February that it lost the emails. Rule 26 would have required Congress to do so. Indeed, such notice would have brought this issue to the forefront and could have saved a lot of money - the money it apparently has already cost to piece together some of the emails, and the money it will cost as the parties argue over whether the IRS negligently or willfully destroyed evidence. If the IRS had been upfront from the beginning, then subpoenas could have been issued months ago to other agencies who, as employers of the lost email recipients, might have copies of the missing emails.

If this discovery issue had arisen in federal court, the IRS would have likely been subject to monetary sanctions and possibly an adverse inference instruction. Shouldn't the IRS be held to these standards?

The Volokh Conspiracy:  The Missing 18 1/2 Minutes: Presidential Destruction of Incriminating Evidence, by Dave Kopel:

If one can imagine a modern-day President Frank Underwood, the lesson he might draw from the story of the 18 1/2 minute gap is that brazen destruction of highly incriminating evidence is the wisest political strategy. Even when the claim about how the evidence was destroyed was obviously false, there may be enough members of the President’s own party who will continue to look the other way, as long as they are not presented with a smoking gun. President Underwood might remember that Alexander Haig went on to become Secretary of State under Ronald Reagan. President Underwood might also tell the public that, as with Richard Nixon, many of his opponents were cynical partisan zealots. Like the mainstream media, anti-Nixon partisans had paid scant attention when Nixon’s predecessor, Democrat Lyndon Johnson, engaged in many of the same crimes and abuses as did Nixon. By the end of Johnson’s term in 1968, he was getting a lot of criticism from the press and from his own party for the Vietnam War, but not for his domestic violations of the U.S. Constitution and the U.S. Code.

In a two-party system, it is likely that the energy for investigations of a President of one party will come from the other party. Among the heroes of the story are the men like Baker, Richardson, and Ruckelsaus, who at a time when the Constitution was in danger, put the national interest above partisan interest.

Washington Post:  Democrats Should Want a Special Prosecutor for the IRS Scandal, by Ed Rogers:

In light of the Friday announcement that the IRS has lost an “untold” number of e-mails from Lois Lerner and six other IRS employees, it is safe to assume Lerner interrupted her taxpayer-funded retirement to hop on a cocktail table somewhere and do a fistpump. And you can bet there were high-fives at the Justice Department and thinly disguised giggles and thumbs-up at the White House.

The audacity of this takes stonewalling to a whole new level. It used to be that if you wanted to “stonewall,” you would just keep quiet. But this administration’s cronies will plead the fifth, conveniently not find evidence, drag their feet, shrug, cry partisanship and expect people to just get over it. ...

The corrosive effect of this diminishes America’s legal authority and makes for bad politics for the Democrats in November. How can the Democrats defend these “lost” e-mails? Who in a competitive 2014 race can keep a straight face and say they believe this president’s claims? If I were a Democrat, I would take Ways and Means Committee Chairman Dave Camp’s (R-Mich.) good advice and support a special prosecutor. It is the only way for Democrats to put distance between themselves and this grotesque violation of the public trust. 

They say where there’s smoke, there’s fire. Well, this is more than just a little smoke – Washington is choking on it. Democrats should want the political cover of supporting the appointment of a special prosecutor. They will need protection from the guffaws, disgust and outright retribution that will follow this scandal to the ballot box in November.

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June 19, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, June 18, 2014

The IRS Scandal, Day 405

IRS Logo 2USA Today op-ed:  Obama's Double Asterisks on IRS, by Glenn Harlan Reynolds (Tennessee):

I guess it's time to award President Obama a second asterisk. When charges came out that the IRS targeted Tea Party groups for harassment, the Wall Street Journal's James Taranto started calling Obama "President Asterisk." His point was that this illicit assistance tainted the election, the way an athlete's use of illegal performance-enhancers results in an asterisk on any records he sets.

Now it may be time for another asterisk. As Congress investigates the IRS chicanery, the IRS has responded to a request for emails to and from Lois Lerner, who spearheaded the Tea Party harassment, by saying, basically, that the dog ate its homework. Or, rather, the IRS claims, somewhat dubiously, that "a hard drive crash" on Lerner's computer led to the loss of emails to outside entities "such as the White House, Treasury, Department of Justice, FEC, or Democrat offices." You know, the very people she's accused of coordinating her harassment with.

With those emails missing, it'll be harder to prove whether Lerner's Tea Party harassment might have been at the behest of other wrongdoers, perhaps going as high as the Oval Office itself. But since government agencies seldom "lose" evidence that makes them look good, reasonable people might suspect that there's a cover-up going on. After all, nobody thought that the famous "18½ minute gap" on Richard Nixon's White House tapes contained anything positive about White House involvement in Watergate. ...

Targeting Americans is unforgivable; covering it up is worse, and if the IRS has made it impossible to target the individuals responsible, then the IRS as a whole should pay the price. That's not an ideal solution, but such misbehavior should not go unpunished.

Los Angeles Times:  The IRS Email Scandal: Where's the Outrage?, by Jonah Goldberg:

Congressional investigators are fuming over revelations that the Internal Revenue Service has lost a trove of emails to and from a central figure in the agency's tea party controversy."

That's the opening sentence of the Associated Press' story on the IRS' claim that it lost an unknown number of emails over two years relating to the agency's alleged targeting of political groups hostile to the president.

But note how the AP casts the story: The investigators — Republican lawmakers — are outraged. 

Is it really so hard to imagine that if this were a Republican administration, the story wouldn't be the frustration of partisan critics of the president? It would be all about that administration's behavior. With the exception of National Journal's Ron Fournier, who called for a special prosecutor to bypass the White House's "stonewalling," and former CBS correspondent Sharyl Attkisson, it's hard to find a non-conservative journalist who thinks this is a big deal.

Wall Street Journal editorial:  IRS Contempt of Congress:  The Agency Now Admits It Didn't Fully Comply With Subpoenas:

The IRS is now telling Congress that it has lost the emails of no fewer than seven IRS employees central to the targeting of conservative nonprofits, though that's only half the outrage. There's also the IRS's quiet admission that it has spent most of the past year willfully defying Congress.

After informing Congress on Friday that it can't find two years of email from former Director of Exempt Organizations Lois Lerner, House Ways and Means Chairman Dave Camp revealed Tuesday that the IRS can't produce records for six more employees whose hard drives also supposedly failed. These six happen to have been central to the IRS crackdown on conservative groups, and the lost emails were sent when the targeting took place, including in 2010 and 2011. The six include Nicole Flax, former chief of staff to former IRS Commissioner Steven Miller. ...

[T]he IRS has from the start been picking and choosing which of Ms. Lerner's emails it deigned to show Congress. And it did so despite knowing that Congress wanted everything. This IRS filter has delayed the investigation and denied Congress access to important information.

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June 18, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, June 17, 2014

The IRS Scandal, Day 404

IRS Logo 2Wall Street Journal:  A Tale of Two Scandals, by Peggy Noonan:

[T]he Obama administration is experiencing what appears to be its own Eighteen-and-a-Half Minute moment. In a truly stunning development in the Internal Revenue Service scandal, the agency last week informed Congress that more than two years’ of Lois Lerner’s email communications with those outside that agency—from 2009 to 2011, meaning the key years at the heart of the targeting-of-conservatives scandal—have gone missing. Quite strangely. The IRS says it cannot locate them. The reason is that Lerner’s computer crashed....

I haven’t ever met a reporter or producer who wasn’t a conservative who didn’t believe the IRS scandal was the result of the bureaucratic confusion and incompetence of some office workers in Cincinnati who made a mistake.

But the IRS scandal is a scandal, and if you can’t see the relation between a strangely destroyed key piece of evidence in an ongoing scandal and what happened 41 years ago with a strangely destroyed key piece of evidence in an ongoing scandal, something is wrong not with the story but with your news judgment. (We won’t even go into the second story last week, that the IRS sent a big database full of confidential taxpayer information to the FBI.) ...

The mischief of the Nixon administration was specific to it, to its personnel. When Chuck Colson left, he left. All the figures in that drama failed to permanently disfigure the edifice of government. They got caught, and their particular brand of mischief ended.

But the IRS scandal is different, because if it isn’t stopped—if it isn’t fully uncovered, exposed, and its instigators held accountable—it will suggest an acceptance of the politicization of the IRS, and an expected and assumed partisanship within its future actions. That will be terrible not only for citizens but for the government itself.

And the IRS scandal will also have disfigured government in a new and killing way. IRS scandals in the past were about the powerful (Richard Nixon) abusing the powerful (Edward Bennett Williams). This scandal is about the powerful (Lois Lerner, et a.) abusing the not-powerful (normal, on-the-ground Americans such as rural tea-party groups). If it comes to be understood that this kind of thing is how the government now does business, it will be terrible for the spirit and reality of the country.

So many of those who decide what is news cannot, on this issue, see the good faith and honest concern of the many who make this warning. And really, that is tragic.

What are the implications of this claim? It means no one can see any emails Lerner sent to or received from other agencies and individuals, including the White House and members of Congress.

And what is amazing—not surprising, but amazing—is that if my experience of normal human conversation the past few days is any guide, very few people are talking about it and almost no one cares.

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June 17, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Monday, June 16, 2014

The IRS Scandal, Day 403

IRS Logo 2National Journal:  Did The IRS Really Lose Lois Lerner's Emails? Let a Special Prosecutor Find Them, by Ron Fournier:

A sloppy mistake, the government calls it, but you couldn't blame a person for suspecting a cover-up -- the loss of an untold number of emails to and from the central figure in the IRS tea party controversy. And, because the public's trust is a fragile gift that the White House has frittered away in a series of second-term missteps, President Obama needs to act.

If the IRS can't find the emails, maybe a special prosecutor can. ...

The White House is stonewalling the IRS investigation. The most benign  explanation is that Obama's team is politically expedient and arrogant, which makes them desperate to change the subject, and convinced of their institutional innocence. That's bad enough. But without a fiercely independent investigation, we shouldn't assume the explanation is benign.

Roger Kimball, 18 1/2 Minutes vs. 2 Years: Which Is Worse?:

WoodsWriting yesterday about the IRS’s amazing loss of more than two years of Lois Lerner’s emails (“Where’d they go? They were here just a minute ago!”), I wondered in passing how the Extended White House Public Relations Office, e.g., the New York Times, MSNBC, et al. would handle the news. The Nixon White House, you’ll recall, found quite a lot of the morning’s scrambled on its collective countenance when 18 and 1/2 minutes of audio tape somehow went missing as the Watergate scandal unfolded around the president.

What a godsend to the guardians of our “Right to Know” Watergate was! Day after day, week after week, month after month, the front pages and editorial pages of our former Paper of Record were full of stern admonitions about that egregious abuse of executive power. You could not look at the paper without a synesthetic shudder: Reading it, you could almost hear them licking their chops as their prey—the dastardly Richard Nixon—came ever closer to his doom.

So how does the New York Times handle this extraordinary loss of two years’ worth of Lois Lerner’s emails? ... This will amaze you, I know, but it is true: the New York Times today devotes zero words to the story. Take a look at the front page here: Nothing. ... [A]bout the missing emails in one of the most disgusting political scandals in recent times, the deployment of the IRS with its virtually unlimited powers, against political opponents of the administration? Nothing. Nada. Rien.

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

Sunday, June 15, 2014

The IRS Scandal, Day 402

IRS Logo 2Wall Street Journal editorial:  The IRS Loses Lerner's Emails (And Other News That the Beltway Press Corps Won't Cover):

The IRS—remember those jaunty folks?—announced Friday that it can't find two years of emails from Lois Lerner to the Departments of Justice or Treasury. And none to the White House or Democrats on Capitol Hill. An agency spokesman blames a computer crash.

Never underestimate government incompetence, but how convenient. The former IRS Director of Exempt Organizations was at the center of the IRS targeting of conservative groups and still won't testify before Congress. Now we'll never know whose orders she was following, or what directions she was giving. If the Reagan White House had ever offered up this excuse, John Dingell would have held the entire government in contempt.

The suspicion that this is willful obstruction of Congress is all the more warranted because this week we also learned that the IRS, days before the 2010 election, shipped a 1.1 million page database about tax-exempt groups to the FBI. ...

New IRS Commissioner John Koskinen promised to cooperate with Congress. But either he is being undermined by his staff, or he's aiding the agency's stonewalling. And now that we know that Justice was canoodling with Ms. Lerner, its own dilatory investigation becomes easier to understand. Or maybe that was a computer crash too.&

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June 15, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, June 14, 2014

The IRS Scandal, Day 401

IRS Logo 2House Ways & Means Committee Press Release:  IRS Claims to Have Lost Over 2 Years of Lerner Emails (June 13, 2014):

Today, Ways and Means Committee Chairman Dave Camp (R-MI) issued the following statement regarding the Internal Revenue Service informing the Committee that they have lost Lois Lerner emails from a period of January 2009 – April 2011.  Due to a supposed computer crash, the agency only has Lerner emails to and from other IRS employees during this time frame.  The IRS claims it cannot produce emails written only to or from Lerner and outside agencies or groups, such as the White House, Treasury, Department of Justice, FEC, or Democrat offices.

“The fact that I am just learning about this, over a year into the investigation, is completely unacceptable and now calls into question the credibility of the IRS’s response to Congressional inquiries.  There needs to be an immediate investigation and forensic audit by Department of Justice as well as the Inspector General.

“Just a short time ago, Commissioner Koskinen promised to produce all Lerner documents.  It appears now that was an empty promise.  Frankly, these are the critical years of the targeting of conservative groups that could explain who knew what when, and what, if any, coordination there was between agencies.  Instead, because of this loss of documents, we are conveniently left to believe that Lois Lerner acted alone.  This failure of the IRS requires the White House, which promised to get to the bottom of this, to do an Administration-wide search and production of any emails to or from Lois Lerner.  The Administration has repeatedly referred us back to the IRS for production of materials.  It is clear that is wholly insufficient when it comes to determining the full scope of the violation of taxpayer rights.”

Oversight Subcommittee Chairman Charles Boustany Jr., M.D. (R-LA) added, "In the course of the Committee's investigation, the Administration repeatedly claimed we were getting access to all relevant IRS documents. Only now - thirteen months into the investigation - the IRS reveals that key emails from the time of the targeting have been lost.  And they bury that fact deep in an unrelated letter on a Friday afternoon.  In that same letter, they urge Congress to end the investigations into IRS wrongdoing. This is not the transparency promised to the American people.  If there is no smidgeon of corruption what is the Administration hiding?"

IRS Statement (June 13, 2014):

At the request of the Senate Finance Committee, the IRS today provided a summary of its production of email and materials to the Committee related to the processing and review of applications for tax-exempt status, as described in the May 2013 report by the Treasury Inspector General for Tax Administration. The IRS has made unprecedented efforts in connection with this effort, producing more than 750,000 pages of documents to help complete the investigations. In total, the IRS’s efforts to respond to Congress have involved more than 250 IRS employees working more than 120,000 hours at a direct cost of nearly $10 million.

As we advised the committee three months ago, we have completed the production of materials related to the investigation, including 11,000 emails sent or received by Lois Lerner.

Since then, at the request of other Congressional committees, the IRS has been working on the identification and production of other Lois Lerner emails. The additional emails do not relate to the Finance Committee’s investigation. As part of this additional search, the IRS collected emails from 83 individuals. Congressional investigators have – or will soon have – a total of 67,000 emails sent or received by Ms. Lerner. In the course of collecting and producing Ms. Lerner’s additional emails, the IRS determined her hard drive crashed in 2011. At the time, Ms. Lerner asked IRS IT professionals to restore her hard drive, but they were unable to do so. Nonetheless, the IRS has or will produce 24,000 Lerner emails from this 2009-2011 time period, largely from the files of the other 82 individuals. The IRS’s production to Congress of the 67,000 Lerner emails is nearly complete.

The IRS is committed to working with Congress. The IRS has remained focused on being thorough and responding as quickly as possible to the wide-ranging requests from Congress while taking steps to protect underlying taxpayer information.

IRS Letter to Senate Finance Committee (June 13, 2014):

I am writing to provide an update on IRS document productions to Congress. As of mid-March 2014, the Senate Finance Committee and the House Ways & Means Committee had received the documents the IRS identified as related to the processing and review of applications for tax-exempt status as described in the May 2013 report by the Treasury Inspector General for Tax Administration. See Enclosure 1. As my August 29, 2013 letter to you described, in order to produce those documents, we ran agreed search terms on many (then 77, now 83) custodians’ electronic materials, reviewed the resulting materials for responsive documents, and produced them. See Enclosure 2. Production of those materials identified as responsive from the agreed custodians and search terms was completed three months ago. See Enclosure 1.

The IRS hopes that your investigation can be concluded and the Senate Finance Committee’s report issued in the very near future so that the IRS can then take further corrective action to address issues, where necessary. Congressional reports are important to learn from, address, and move beyond the problems and concerns identified. Your committee’s conclusions and recommendations will be a critically important step in that process.

More than 250 IRS employees have spent over 120,000 hours working on compliance with several investigations stemming from last May’s report related to the processing and review of applications for tax-exempt status by the Treasury Inspector General for Tax Administration. We have responded to hundreds of Congressional requests for information. In so doing, the IRS has incurred a direct cost of nearly $10 million. We have spent an additional $6-8 million to optimize existing information technology systems and ensure a stable infrastructure for the production and required redactions to protect taxpayer information. I have attached a document describing some of the challenges and limitations that the IRS faced in its production process. See Enclosure 3.

Since mid-March, in response to Chairman Dave Camp’s request and Chairman Darrell Issa’s subpoena, the IRS has been reviewing and producing all remaining email for which Lois Lerner was a custodian – regardless of search terms, relevance, or subject matter. In other words, these Lerner documents are beyond and in addition to the already-produced Lerner materials the IRS identified as related to the processing and review of applications for tax-exempt status, which your Committee had received by mid-March. In addition, as described in Enclosure 3, when unavailable from Ms. Lerner’s custodial account, we are producing Lerner-related email (i.e., email on which Ms. Lerner was an author or recipient) from other custodians regardless of subject matter. In certain instances, such as personal conversations between Ms. Lerner and her family regarding health issues, we expect to make the materials available here at the IRS for interested Congressional staff to come review. In all, the IRS has produced or will produce or make available approximately 67,000 emails in which Ms. Lerner was an author or a recipient. As per your staff’s request, we will continue to include your committee in our productions until or unless you instruct us otherwise.

Description of IRS Email Collection and Production (June 13, 2014):

Over the past year, the Internal Revenue Service made a massive document production in response to Congressional and other inquiries. This activity has been challenging since processing email for production to third parties is a more complex process for the IRS than it is for many private or public organizations. Below we analyze why it is so complicated for the agency to respond to what otherwise in this modern day seem like straightforward requests, including an assessment of what is and is not currently possible. Sophisticated IRS information technology systems are designed to facilitate tax administration, cost-effective use of resources, and preserve confidential taxpayer information, not to facilitate matters related to document preservation, collection, processing, and review. The IRS faces unique challenges in producing email to third parties because of how its email is stored, the security required for IRS email, and the laws protecting confidential taxpayer information from disclosure.

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June 14, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, June 13, 2014

The IRS Scandal, Day 400

IRS Logo 2Power Line Blog, Bill Henck: Inside the IRS, Part 3:

William Henck has worked inside the IRS Office of the Chief Counsel as an attorney for over 26 years. We posted his personal account, including his testimony to a retaliatory audit conducted by the IRS against him, this past February in “Inside the IRS” and followed up with Inside the IRS, part 2″ in May. ... Henck’s experience illuminates a deeply sinister aspect of the current controversy over the agency’s illegal activities.

American Spectator:  Mickelson Targeted Like Tea Partiers?:

Here's how it sounds to me: Famous rich athlete complains about the negative incentives caused by high taxes. Government usees especially aggressive tactics to try to find him guilty of securities violations, not least perhaps intentionally leaking the existence of an investigation, a story which the Obama-cheerleading, tax-loving NY Times is only too happy to cover. The Times then reports that "Mr. Mickelson’s ties to the investigation are weaker than previously reported." But of course much of the damage to Mickelson is done, harming his reputation as well as distracting him from his profession and the rest of his life.

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June 13, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, June 12, 2014

The IRS Scandal, Day 399

IRS Logo 2Wall Street Journal:  FBI Returns Taxpayer Information It Got From IRS:

The FBI has returned a large database of taxpayer information it received from the IRS, amid an investigation into possible political targeting of conservative groups, the FBI's director said on Wednesday.

Testifying before the House Judiciary Committee, James Comey said FBI investigators didn't examine the database, which included private taxpayer information that isn't supposed to be shared without a judge's order. "The only thing that was done, (was) analysts looked at the table of contents,'' Mr. Comey said.

In January, The Wall Street Journal reported that law-enforcement officials don't expect to file criminal charges as a result of the probe into how the IRS scrutinized conservative tax-exempt groups.

Congressional Republicans are incensed that the IRS transmitted a 1.1 million-page database of information concerning tax-exempt organizations to the FBI shortly before the 2010 election.

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June 12, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, June 11, 2014

The IRS Scandal, Day 398

IRS Logo 2Wall Street Journal, Another IRS Abuse: Lois Lerner's Office Sent Confidential Taxpayer Data to the FBI:

In a Monday letter to IRS Commissioner John Koskinen, Reps. Darrell Issa (R., Calif.) and Jim Jordan (R., Ohio) of the House Oversight Committee reveal still another IRS abuse of conservatives. In October of 2010, apparently without a court order, the IRS sent 21 computer disks containing 1.1 million pages of tax-return documents to the Federal Bureau of Investigation. According to the Justice Department, the massive data dump included public returns from non-profit groups but also taxpayer information that by law the IRS is required to keep confidential. Reps. Issa and Jordan ask in their letter for information relating to the preparation and transmittal of the data.

How did these documents wind up at the FBI? In September of 2010, IRS officials including Lois Lerner and Sarah Hall Ingram helped the New York Times prepare a story about non-profit policy groups which "heavily favored Republicans" in their purchases of issue advertising. 

The day after the article appeared, Justice Department Public Integrity Section Chief Jack Smith noted the story in an email to colleagues and asked whether they could charge the groups with conspiracy to violate U.S. laws. Mr. Smith also suggested scheduling a meeting with Ms. Ingram, who like Ms. Lerner was a senior official overseeing tax-exempt organizations at the IRS. ...

Last month, 26 House Democrats joined with Republicans in voting to urge Attorney General Eric Holder "to appoint a special counsel to investigate the targeting of conservative nonprofit groups by the Internal Revenue Service." The new revelations of taxpayer abuse ensure that Congressional pressure for a more thorough investigation will continue.

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June 11, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, June 10, 2014

IRS Adopts Taxpayer Bill of Rights

TBOR

The IRS today announced (IR-2014-72) the adoption of a Taxpayer Bill of Rights in updated Publication 1:

  1. The Right to Be Informed
  2. The Right to Quality Service
  3. The Right to Pay No More than the Correct Amount of Tax
  4. The Right to Challenge the IRS’s Position and Be Heard
  5. The Right to Appeal an IRS Decision in an Independent Forum
  6. The Right to Finality
  7. The Right to Privacy
  8. The Right to Confidentiality
  9. The Right to Retain Representation
  10. The Right to a Fair and Just Tax System  

TBOR 2

Taxpayer Advocate Service, Taxpayer Bill of Rights:

Since assuming her position in 2001, National Taxpayer Advocate Nina E. Olson has emphasized the protection of taxpayer rights in tax administration. In her 2007 Annual Report to Congress, and in later reports, she proposed a new Taxpayer Bill of Rights. On June 10, 2014, the IRS formally adopted the Advocate’s proposal, to renew the focus on protecting the rights of taxpayers in all of their dealings with the IRS.  

This document groups the dozens of existing rights in the Internal Revenue Code into ten fundamental rights, and makes these rights clear, understandable, and accessible for taxpayers and IRS employees alike.

Taxpayer Advocate Service, What the Taxpayer Bill of Rights Means for You

Update:

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

The IRS Scandal, Day 397

IRS Logo 2Wall Street Journal, IRS Sent FBI Database on Nonprofit Groups in 2010, GOP Lawmakers Say:

The IRS transmitted a 1.1 million-page database of information concerning tax-exempt organizations to the Federal Bureau of Investigation in the run-up to the 2010 election, including confidential taxpayer information that should not have been shared, according to House GOP lawmakers investigating the IRS.

The information was to be used in investigations of nonprofit groups' political activity, the lawmakers say, citing internal emails from the agencies.

The Justice Department turned over the database to the House Oversight and Government Reform Committee this month in response to a subpoena, officials said on Monday.

"We were extremely troubled by this new information, and by the fact that the IRS has withheld it from the committee for over a year," wrote Reps. Darrell Issa (R., Calif.) and Jim Jordan (R., Ohio) in a letter to IRS Commissioner John Koskinen. "We were astonished to learn days ago from the Justice Department that these 21 disks contained confidential taxpayer information protected by federal law."

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June 10, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, June 9, 2014

Treasury Department Employee Firing Rate Is 4th Lowest Among Federal Agencies

Cato Institute, Federal Firing Rate by Department:

Treasury - IRSThe VA scandal has prompted a debate about whether it should be easier to fire federal workers. I’ve argued that the firing rate for poor performance should be increased.

However, there can be no debate that the current firing rate is very low. In 2013 just 9,244 workers out of a civilian federal workforce of 1.87 million were fired for poor performance or misconduct, according to OPM data underlying this Govexec.com article by Eric Katz. That is a rate of just 0.49 percent, or 1 in 200 a year. Most federal firings are for misconduct, with a smaller share for poor performance.

The Govexec.com analysis found that firing rates by type of employee vary dramatically. Blue collar and lower GS levels (1-10) are many times more likely to be fired than higher GS levels (11-15) and those in the Senior Executive Service (SES). The GS 11-15 firing rate was just 0.14 percent, while the SES rate was just 0.09 percent. Just 7 out 7,940 SES employees got fired in 2013.

The rate of firing of GS 11-15 Treasury Department employees in 2013 was 0.11% (1 in 900), the fourth smallest rate among 18 federal agencies: 

Firing

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

The IRS Scandal, Day 396

Sunday, June 8, 2014

The IRS Scandal, Day 395

Saturday, June 7, 2014

The IRS Scandal, Day 394

IRS Logo 2The Jersualem Post editorial:   Z Street and the IRS:

The Z Street case may be what forces the IRS to pull aside its carefully constructed curtain and reveal how it made decisions regarding organizations deemed out of step with the current US administration

Last spring, the US media were filled with accusations that the IRS was using its power over nonprofits to stifle opposition to the Obama administration.

While congressional efforts to investigate the alleged wrongdoings have been stymied, a decision by a federal judge in Washington may force the IRS to disclose whether a small, staunchly pro-Israel group was victimized.

Judge Ketanji Brown Jackson of the US District Court for the District of Columbia threw out every legal defense the IRS raised in Z Street v. Koskinen, IRS Commissioner. She ordered the IRS to provide a substantive answer to Z Street’s complaint by June 26.

Z Street brought its lawsuit for viewpoint discrimination after, it alleges, the IRS agent to whom the organization’s file had been assigned said Z Street’s application for tax exemption might take a long time to process because the IRS “has to give special scrutiny to organizations connected to Israel,” and that the files of some of those applicants “will be sent to a special unit in Washington to determine whether the activities of the organization contradict the public policies of the administration.”

If borne out by the evidence, this would be an astounding violation of free speech rights.

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

Friday, June 6, 2014

The IRS Scandal, Day 393

IRS Logo 2New York Post editorial, Schumer’s IRS:

Did Chuck Schumer try to use the IRS to sidestep the Supreme Court’s Citizens United ruling — and stick a dagger in the heart of conservative groups? That’s the gist of a complaint filed this week with the Senate Select Committee on Ethics. ...

The complaint notes Schumer signed letters asking the IRS if it was investigating “social welfare organizations” to see if they were improperly campaigning. Turns out the IRS did investigate. And — surprise! — almost all the groups singled out for special IRS scrutiny were conservative.

It also points to a Schumer speech made earlier this year called “The Rise of the Tea Party and How Progressives Can Fight Back.” The speech, says the complaint, explains how the IRS could be a tool “to stamp out Tea Party organizations.”

Up to now, the press has not regarded the clear and deliberate IRS targeting of conservative organizations as a scandal, because it’s found no evidence it was ordered by the White House. If the Center for Competitive Politics is right, maybe the media should start looking at the Senate.m. 

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June 6, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, June 5, 2014

The IRS Scandal, Day 392

IRS Logo 2Washington Post:  The Rhythm of a Federal Scandal, by Tom Hicks:

Federal scandals tend to share certain common characteristics, especially with the way they play out. Let’s review some recent examples of government misconduct to understand the trends.

As case studies, we’ll use the the cover-ups of treatment delays at Veterans Affairs hospitals, the Internal Revenue Service’s targeting of conservative groups and the General Service Administration’s lavish training conference in Las Vegas. 

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June 5, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, June 4, 2014

The IRS Scandal, Day 391

IRS Logo 2The Hill, Conservative Group Accuses Nine Dem Senators of Unethical Conduct:

A conservative group is calling on the Senate ethics committee to examine nine top Democrats, accusing them of pushing the IRS to investigate specific groups.

The Center for Competitive Politicsannounced their complaint Tuesday, in which they charge that lawmakers tried to get the tax agency to probe outside conservative groups.

“These senators improperly attempted to use the IRS to suppress the free speech of American citizens for their party’s electoral gain,” said Brad Smith, chairman of the Center and a former Chairman of the Federal Election Commission. “We will fight this type of abuse of power and work to ensure that those who have violated Senate Ethics rules are held to account.”

The group wants the ethics panel to look at Sens. Dick Durbin (Ill.), Chuck Schumer (N.Y.), Carl Levin (Mich.), Michael Bennet (Colo.), Sheldon Whitehouse (R.I.), Jeanne Shaheen (N.H.), Al Franken (Minn.), Jeff Merkley (Ore.), and Tom Udall (N.M.).

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June 4, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, June 3, 2014

The IRS Scandal, Day 390

IRS Logo 2Wall Street Journal op-ed:  Congress Abetted the IRS Targeting of Conservatives, by Bradley A. Smith & David Keating (both of the Center for Competitive Politics):

On Monday the Center for Competitive Politics filed a complaint with the Senate Select Committee on Ethics against nine U.S. senators [Sens. Bennet, Durbin, Franken, Levin, Merkley, Schumer, Shaheen, Udall, Whitehouse]: for interfering with IRS tax proceedings; for misusing official resources for campaign purposes; and for improper conduct that reflects poorly upon the Senate. Attempting to use the IRS to advance a partisan, electoral agenda is a fundamental assault on good government. We believe these elected officials have staged such an assault.

The complaint documents how the senators improperly interfered with IRS adjudications to further their party's electoral prospects. They pressured the IRS to undertake income-tax investigations of specific organizations, to find that specific organizations were in violation of the law, to reach predetermined results pertaining to pending applications by individual organizations for nonprofit status, and to adopt specific regulatory interpretations and policies to further their campaign goals.

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June 3, 2014 in IRS Scandal, Tax | Permalink | Comments (0)

Monday, June 2, 2014

The IRS Scandal, Day 389

IRS Logo 2Thiago Sorrentino was kind enough to let me know that the Supreme Court of Brazil (the Supremo Tribunal Federal) has cited my daily roundup on the IRS Scandal in Medida Cautelar NA Susepnsao De Tutela Antecipada (STA/752):

Without revealing transparency of the criteria for application of the tax rules , the appeal of the State to protect free enterprise and fair competition declines to a cognitive framework of uncertainty , as that on which the fiscalizatórios thorough review procedures of the Internal Revenue Service U.S. , due to the selectivity of legal interpretation as non- legal criteria ( see, for all the record that Prof. . Caron Paul does in http://taxprof.typepad.com/taxprof_blog/2014/05/the-irs-scandal- 17.html ); In these terms , the argument would only be permissible risk to free enterprise and fair competition that each taxpayer could realize the full control of the criteria used to apply tax rules , both those that define the tax burden as those that effectively prohibit the exercise of activity economic lawful. Given these caveats, impart pled measure to suspend the company - interested in the records of Action to advance protection 

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

Sunday, June 1, 2014

The IRS Scandal, Day 388

Saturday, May 31, 2014

The IRS Scandal, Day 387

IRS Logo 2Forbes: Did IRS Target Israel? Suit By Pro-Israel Z Street Will Move Forward, by Peter J. Reilly:

This lawsuit much like Teapartygate confirms me in my view, that the evaluation of whether an organization's purposes should allow it exempt status is not something that the IRS should be doing. There are credits for historic buildings, but it is not the IRS that decides whether the buildings are historic. The same principle should apply here.

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May 31, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, May 30, 2014

The IRS Scandal, Day 386

IRS Logo 2Commentary:  Phony Scandal? Courts Open Window on the IRS’s Political Litmus Tests, by Jonathan S. Tobin:

Interest in the Internal Revenue Service’s outrageous practice of subjecting politically conservative groups to discriminatory treatment has died down a bit since the revelations about this scandal first hit the news a year ago. But a court decision that was handed down earlier this week about a similar instance of potential government misconduct may shed more light on the way the Tea Party and other right-wing organizations were given the business by Lois Lerner and the rest of what appears to be a highly politicized bureaucracy at the heart of our tax collection system. ...

In other words, this case may be the straw that breaks the camel’s back of the IRS’s politically prejudicial policies. If an IRS agent can reject or stall a pro-Israel group’s application on the grounds that “these cases are being sent to a special unit in the D.C. office to determine whether the organization’s activities contradict the Administration’s public policies,” then no group, no matter what its political orientation or cause is safe from being subjected to a political litmus test designed by any administration of either political party. ...

Using the IRS to punish political foes is blatantly illegal. If, as we suspect, the Z Street case reveals the sort of internal email traffic that will reveal how widespread this practice has become in the last five years, perhaps even a liberal mainstream press that still thinks the problems at the IRS are a “phony scandal” will start to pay attention.

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May 30, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, May 29, 2014

The IRS Scandal, Day 385

IRS Logo 2Wall Street Journal editorial:  IRS Judgment Day: The Untalkative Agency Comes Under Scrutiny From a Federal Judge:

The IRS continues to evade questions about its handling of applications for tax-exempt status from groups whose political views conflicted with the Obama Administration's. That may change. A federal judge's ruling will force the agency to defend itself in court and go through discovery on its handling of a slow-tracked application.

In 2009 a Pennsylvania group called Z Street applied to the IRS for tax-exempt status for its mission of educating people about Zionism and other policies related to Israel and the Middle East. In May 2010 the group received a request from the IRS for more information, which it sent. According to Z Street's complaint, two months later the agent in charge of reviewing the application told Z Street's counsel she was holding up the application because of her concerns that the group engaged in advocacy related to the Middle East. 

According to the complaint, Agent Diane Gentry said that special attention was given to Israel-related groups and that "these cases are being sent to a special unit in the D.C. office to determine whether the organization's activities contradict the Administration's public policies." We've since learned that the agency's November 2010 "Be On the Lookout" list also flagged agents to look out for words related to Israel or "inflammatory" references to "disputed territories." ...

This ruling will force the IRS to open its books on the procedures it used and decisions it made reviewing Z Street's tax-exempt application, procedures it has tried to keep shrouded. As the case proceeds, Z Street's attorneys can seek depositions from many who have been part of the larger attempt to sit on similar applications by other conservative groups.

It will be fascinating to see which names— Lois Lerner, former head of IRS tax-exempt scrutiny?—show up in the internal email traffic. The Administration may have a harder time evading accountability now that a judge will be supervising the testimony.

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May 29, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, May 28, 2014

The IRS Scandal, Day 384

IRS Logo 2Government Executive:  Justice Fires Back at Issa on Testimony Over IRS Probe:

Tuesday, May 27, was the day the Justice Department was supposed to produce a key prosecutor to testify to staff on a House panel probing alleged political favoritism at the Internal Revenue Service.

But that was according to a May 22 letter sent to Attorney General Eric Holder by House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., who is concerned about what he sees as improper coordination between IRS and Justice in deciding which groups to investigate for possible campaign finance law violations.

As of publication time May 27, there was no scheduled appearance by Jack Smith, chief of Justice’s Public Integrity Section, and no updated comment from the department or Issa’s panel.

What did emerge on Tuesday was a letter from Justice explaining its procedures and reasoning on questions of testifying to Congress. It comes as the latest wrinkle in the year-old controversy over IRS efforts to single out for extra scrutiny certain nonprofit groups applying for tax-exempt status

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May 28, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, May 27, 2014

The IRS Scandal, Day 383