Paul L. Caron

Sunday, February 16, 2014

The IRS Scandal, Day 283

IRS Logo 2New York Post editorial:  Calling Lois Lerner:

The American people still need to hear from Lois Lerner. That’s a point that can’t be made often enough.

Remember her? She’s the IRS official who gave a statement before Congress declaring herself innocent of any wrongdoing — and then promptly took the Fifth.

Recently, Congress unearthed another IRS e-mail on which she was copied, talking about taking “off-plan” a discussion about how to harass the 501(c)(4) groups the IRS had targeted. Meanwhile, leaks from officials involved in the investigation claim the FBI has not found ­anything criminal.

That’s an amazing finding, given the statement by the American Center for Law and Justice, which represents the IRS targets, that the FBI hadn’t interviewed a single of the center’s 41 ­clients. ...

[W]e hope Congress is making clear that whatever happens with the Justice investigations, the American people need to get Lois Lerner back on that stand to answer questions under oath.

IRS News, IRS Scandal, Tax | Permalink


Dear Mr. Townsend,

I write anonymously because I am not a sycophant of the current Administration. Perhaps you have not heard of Frank Van der Sloot and Catherine Englebrecht. And I have my clients to worry about, too.

Most of your rebuttal addresses the phrase “off-plan” in the email and you pretend to not know what it means. I think that is not quite credible given your time in the Justice Department and many years as a tax lawyer. It is common knowledge among my circle of tax lawyers that Treasury and IRS publish twice a year an agenda of projects they want to accomplish. It generally includes regulation projects but also other matters. It never completes everything on this agenda and does take up things not on this plan. I do not find the use of the term “off-plan” to indicate something hidden or secret but rather something not on the planned schedule of projects for the year. It is nevertheless significant because it shows that IRS and Treasury had time to pick up a project they had not planned for – and this during an election year in which the subject was groups involved in political activity.

No, it is not the proverbial “smoking gun” but it shows that a person at a policy-making level in the Treasury Department brought to the attention of Lois Lerner and her cohorts another tool to use to attack political activity. By your familiarity with the administrative processes within the tax administration parts of our Government, you are surely aware that case law developments would come from the Office of Chief Counsel, not the Treasury Department. The question for Ms. Madrigal is why she was communicating such information directly to IRS administrators and not going through Chief Counsel. If you knew about Ms. Madrigal’s background you would know why this raises questions.

To respond to your claim that this email does not implicate Obama directly misses the point. The point of our complaint is that the IRS is being used for political purposes. Whether it comes from the highest parts of the Administration or from within the IRS and Treasury sua sponte does not matter. Both are wrong.

The sad thing about your response is that you do not seem to care what this episode has done to the reputation of the IRS and fair tax administration in the United States. Your concern is that we cannot tie this directly to Obama. I myself do not care whether Obama knew directly or not, the point is that the IRS should not be used for political purposes. People who try to explain away every improper action or omission are themselves perpetuating the “big lie” you threw out in your argument ad hominem the other day.

Posted by: TexEcon | Feb 19, 2014 7:19:39 AM

I will try to answer again.

Here are the key points from the earlier posting (as best I remember them):

1. Please don't hide behind anonymity. You have something to say; you should not be ashamed to identify yourself. Are you Darrell Issa?

2. Here is the email. Readers can determine for themselves what it says:

3. All of the substantive comment except the opening paragraph is not Ms. Madrigal's words. Rather it is a cut and paste of comments made on an independent law prof blog. Many have attributed those words to Ms. Madrigal not knowing that it was just a cut and paste of a third party's comments.

4. So, let's focus on the first paragraph since those are her words. Here are those words.

Don’t know who in your organizations is keeping tabs on c4s, but since we mentioned potentially addressing them (off-plan) in 2013, I’ve got my radar up and this seemed interesting…

5. Now the conspiracy theorists (apparently including you) focus on the works "off-plan." (Keeping tabs is not a problem, because the IRS is supposed to keep tabs on exempt organizations of all stripes.) Now, the conspiracy theorists read "off-plan" as an indication of secret, nefarious activity. Everyone in today's world knows that, if indeed you want to conduct secret nefarious activity, you don't do it in organization emails. Those emails are the easiest thing to discover, so I doubt that Ms. Madrigal would have used that communication vehicle for such activity.

6. So what do her words "off-plan" mean? I don't know. You give no indication that you know either. Without more, I don't think "off-plan" can be fairly read on its own within the context of the email as meaning that she and the recipients were doing something secret and nefarious. It may just mean that they are considering something that is not on the IRS formal business plan. Various components of the IRS and Treasury (and, I suspect, every agency) do that all the time within their respective areas of responsibility.

7. Moreover, "off-plan" -- whatever it means -- does not mean that Obama had any knowledge of or approved in any way what Ms. Madrigal and the recipients of the email were doing. There is no indication that whatever they were doing was instigated, known to, imagined, or approved by the White House or by Obama.

8. The only way the email can constitute proof of anything that you claim is by assuming facts not in existence (or at least not in the email which is the only proof of scandal that you cite). I doubt that this will be impressive to you because you do assume / imagine the key facts that support your narrative. I assume nothing. I want proof. You have not offered it.

I have a longer more polished answer yesterday, but did not keep a copy. But this is the guts of it.

Jack Townsend

Posted by: Jack Townsend | Feb 18, 2014 8:17:59 AM

Oh, and one other point, please provide your name rather than hiding behind anonymity.

Jack Townsend

Posted by: Jack Townsend | Feb 18, 2014 7:51:49 AM

Still waiting, Mr. Townsend.
Just to refresh your memory, the June 2012 email was sent by Ms. Madrigal, counsel in the Treasury Department's Office of Tax Policy, to, inter alia, Lois Lerner, that a recent Court of Appeals case might undermine some of the 501(c)(4) activity. Coincidence in an election year filled with 501(c)(4) "Tea Party" applications? Surely not.

Posted by: TexEcon | Feb 17, 2014 8:34:20 PM

Mr. Townsend,
Please explain Ruth Madrigal's email of June 2012 in the context of how this is not a scandal.

Posted by: TexEcon | Feb 16, 2014 6:44:01 PM

Actually, getting Lois Lerner's testimony under oath is easy. Darrell Issa and his minions know exactly how to do that. Give her immunity so that they can work their way up the imagined chain to Obama. Giving her immunity will not be a big deal if they can really get to Obama. But, what Darrell Issa and his minions know is that the trail does not lead to Obama, hence they are better off by just insinuating that it could get to Obama rather than granting the immunity that would show the truth or falsity of the insinuation.

Now, my question for the tea party readers of this daily aggregation of tea party news, if you say it is a scandal long enough, will that make it a scandal? When Tax Prof Blog hits "The IRS Scandal, Day 1000" will it then be a scandal? Remember this apt saying by Vladimir Ilyich Lenin:

“A lie told often enough becomes the truth.”

That is the only hope for this "scandal," since the facts are not consistent with the claims.

Jack Townsend

Posted by: Jack Townsend | Feb 16, 2014 3:27:12 PM