Paul L. Caron

Saturday, February 15, 2014

The IRS Scandal, Day 282

IRS Logo 2

Washington Post:  The IRS, the Democrats’ Cat’s Paw, by Ed Rogers:

Encouraged by the lack of a public backlash, an uninquisitive press, cover from the White House and an eager-to-please bureaucracy, the Democrats are boldly counting on the IRS to be their political and policy enforcer.This statement isn’t an overreach by the “vast right-wing conspiracy” or a phony crisis created by hecklers (like me) on the right — it goes back to the early stages of President Obama’s reelection campaign. Remember the case of Romney supporter Frank Vandersloot? Before the 2012 campaign, he was publicly accused of having a “less-than-reputable record” by Team Obama and then found himself the target of IRS and Department of Labor audits. This was just one example of an individual who was persecuted because of his donation to a pro-Romney super PAC, but it served as a sufficient warning and no doubt had a chilling effect on others who were inclined to support the Republican nominee for president in 2012. And we now know that while this was going on, the IRS was actively suppressing conservative organizations seeking tax-exempt status because they opposed the president and the Democrats’ policy positions.

Lois Lerner, the government official at the center of the IRS scandal, took the fifth amendment in a high-profile congressional hearing, then quietly retired from the agencywith a taxpayer-funded pension. She hasn’t been heard from since. The Obama administration has gone into overdrive since the scandal broke to avoid any accountability, with the president famously telling Bill O’Reilly of Fox News only a few weeks ago that there was “not even a smidgen of corruption” in the IRS targeting of conservative groups. Comically, this is still an active and ongoing investigation by the Obama Department of Justice, so you would think the president wouldn’t be able to come to that conclusion quite yet. Of course, no one in the administration can comment on an active and ongoing investigation, so it is the perfect cover for self-preservation and is reassuring to those doing the Democrats’ bidding in the IRS and elsewhere.  Let’s also remember that the Justice Department’s farce of an investigation into the IRS targeting scandal is now being led by trial lawyer and Obama donor Barbara Bosserman. It’s so brazen, I almost admire their audaciousness. In politics, gall pays off.

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Apparently, the ABA Section of Taxation is complicit in the Administration’s “not a smidgen” campaign to ignore the growing narrative of the IRS targeting of 501(c)(4 ) organizations for political reasons. In the Tax Section’s latest News Quarterly, vol. 33, No. 2, it offers an article, “Opinion Point: Restoring Trust in the Internal Revenue Service,” that purports to blame the Cincinnati episode on the 1998 IRS Restructuring Act and states that the IRS is not corrupt.

According to the author, the 1998 Act forced the IRS away from local control in strong District Directors and into “stovepipe” operating divisions with control from Washington. The author then asks rhetorically: “Is it in the national interest for our fellow citizens to believe their Internal Revenue Service has been corrupted? The answer is, ‘NO, BECAUSE IT’S A BRAZEN FALSEHOOD.’”[all caps in original]. Instead of just saying no, the author parrots every Administration supporter on the issue without addressing any of the facts showing that 501(c)(4) groups were, indeed, targeted. A particular recent development (the email from Treasury’s Office of Tax Policy) is almost conclusive evidence that the targeting campaign was spawned in the highest levels of the IRS in Washington but also at even higher levels at the Treasury Department. Instead of showing that there is no corruption in the IRS this article provides an institutional framework to show that, yes, the targeting could only have come on orders from IRS in Washington.

Posted by: TexEcon | Feb 16, 2014 1:13:45 PM