Paul L. Caron
Dean




Wednesday, December 24, 2014

The IRS Scandal, Day 594

IRS Logo 2U.S. House of Representatives Committee on Oversight and Government Reform, The Internal Revenue Service’s Targeting of Conservative Tax- Exempt Applicants: Report of Findings for the 113th Congress (Dec. 23, 2014) (226 Pages):

The Committee’s investigation has resulted in the following findings to date about the Internal Revenue Service’s inappropriate treatment of tax-exempt applicants:

  • The Internal Revenue Service targeted conservative-oriented applicants for taxexempt status;
  • Unlike applications from conservative groups, the small batch of applications from liberal-oriented groups received additional scrutiny for non-political reasons. Of the applications that received additional scrutiny, only seven contained the word “progress” or “progressive,” all of which were subsequently approved by the IRS, while Tea Party groups were subjected to an unprecedented degree of review and years-long delays.
  • Senior Internal Revenue Service officials covered up the misconduct and misled Congress about the existence and nature of the targeting;
  • The Internal Revenue Service sought to rein in conservative-oriented non-profits as early as 2010;
  • The Administration is using the targeting as pretext to support its proposed regulation to limit political speech of conservative non-profits;
  • Mismanagement among the senior leadership of the Internal Revenue Service contributed to the targeting;
  • The Internal Revenue Service and the Obama Administration knowingly and wrongly blamed line-level employees for the misconduct;
  • Employees of the Internal Revenue Service inappropriately used non-official e-mail to conduct official government business;
  • The Internal Revenue Service has compromised its traditional position as an independent tax administrator;
  • The Obama Administration exhibited a lack of accountability for the IRS misconduct;
  • Lois Lerner’s refusal to testify hindered the Committee’s investigation;
  • The Internal Revenue Service obstructed the Committee’s investigation; and
  • The White House and congressional Democrats obstructed the Committee’s investigation.m

New York Times:  Inquiry Into I.R.S. Lapses Shows No Links to White House:

An 18-month congressional investigation into the Internal Revenue Service’s mistreatment of conservative political groups seeking tax exemptions failed to show coordination between agency officials and political operatives in the White House, according to a report released on Tuesday.

The I.R.S. has admitted that before the 2012 election it inappropriately delayed approval of tax exemption applications by groups affiliated with the Tea Party movement, but the I.R.S. and its parent agency, the Treasury Department, have said that the errors were not motivated by partisanship.

Wall Street Journal, IRS Considered Tax on Donations to Political Groups; Move Could Have Disproportionately Hurt Conservative Activists:

Internal Revenue Service officials considered imposing a tax on large donations to many tax-exempt political organizations in 2011, recently released emails show, a move that could have disproportionately hurt conservative activists.

The discovery comes as part of Republican lawmakers’ broader investigation into the IRS’s treatment of conservative groups. It is further fueling GOP suspicions that some agency officials sought to suppress conservatives’ use of tax-exempt organizations for political speech.

The internal emails “demonstrate that the IRS sought to use the gift tax as one part of a larger effort to crack down on the political speech” of conservative tax-exempt groups, said Rep. Darrell Issa (R., Calif.), the chairman of the House Oversight and Government Reform Committee. ...

The separate IRS effort to impose gift tax on big donors to tax-exempt organizations has gotten less attention. But GOP lawmakers are concerned about the gift-tax effort since it first surfaced in 2011, in part because conservatives have made extensive use of nonprofit entities, such as Crossroads GPS, in recent years for political outreach to voters.

Establishing such groups as tax-exempt entities is attractive, because it allows organizers to keep donors’ identities secret. Imposing a gift tax on those donations could discourage them, advocates fear. The top gift tax rate was 35% in 2011 and is now 40%.

https://taxprof.typepad.com/taxprof_blog/2014/12/the-irs-10.html

IRS News, IRS Scandal, Tax | Permalink

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