Paul L. Caron

Wednesday, May 20, 2015

The IRS Scandal, Day 741

IRS Logo 2National Review, Conservative Group Uncovers New Roots of IRS Scandal:

A group of lawyers who have been investigating the origins of the IRS scandal for the past year-and-a-half say they’ve uncovered the real roots of the IRS scandal — and they’ll surprise both liberals and conservatives alike. The group, Cause of Action, which has subpoenaed thousands of pages of documents from the agency and is still embroiled in litigation with it, says the targeting of conservative groups resulted as much from IRS personnel merely following the instructions laid out in their employee handbook, the Internal Revenue Manual, as from any political bias at the top.

When the scandal broke nearly two years ago, the IRS and the Obama administration pointed the finger at a few bad apples in the agency’s Cincinnati office. The agency’s inspector general blamed the inappropriate targeting of tea-party groups on the “ineffective management” of top bureaucrats. Many reporters, particularly on the right, including here at National Review, concluded that top D.C. official Lois Lerner and her colleagues in the IRS’s Exempt Organizations office had orchestrated events from the outset.

Dan Epstein, executive director of Cause of Action, is a former attorney and investigator for the House Oversight Committee. He and his team, a group of 13 attorneys funded by the Koch brothers’ sprawling network of donors, say none of these stories fully explain what happened at the IRS between 2010 and 2014 and that, in fact, the targeting was baked in the cake. That is, the Internal Revenue Manual, the handbook by which IRS employees are required to abide, mandates the sort of scrutiny that delayed the processing of the applications of hundreds of conservative nonprofit organizations. Cause of Action has laid out its case in a confidential, 35-page memo obtained by National Review. They concluded that many of the IRS officials involved in the scandal were just following the rules. ...

Epstein’s team at Cause of Action is adamant that most of the IRS personnel involved in the scandal executed their duties properly. “Clearly, Jack Koester, John Shafer, and Cindy Thomas executed their employee obligations precisely,” their report says. “Indeed, in the course of merely two business days, the employees in the Exempt Organizations group accurately elevated this Tea Party issue as ‘newsworthy’ or having the ‘potential to become newsworthy.’”

The team’s conclusion: The Internal Revenue Manual must be fundamentally reformed in order to prevent future targeting. “While there are certainly complex or new issues that would warrant or even require an employee to elevate the issue to a manager, the IRS’s desire to be portrayed in a positive light by the media is certainly not one of those issues,” they say.

Tax-law experts agree. Craig Engle, the founder of the bipartisan political-law group at the Washington law firm Arent Fox, says that allowing IRS personnel, ultimately at the national level, to determine what issues are newsworthy creates a sort of self-fulfilling prophecy. The Internal Revenue Manual as it stands now virtually “requires the national office to do something” about cases it deems newsworthy, Engle says. As a result, he says, the IRS “created a task for itself that it would be impossible to administer evenhandedly, let alone on a bipartisan basis. It’s no wonder they got caught.”

IRS News, IRS Scandal, Tax | Permalink


"The team’s conclusion: The Internal Revenue Manual must be fundamentally reformed"

Yes, the standard operating procedure for brushing a scandal under the rug. Blame the system and promise to make changes at the offending agency. Then carry on as usual after the public has been snowjobed.

It happens all the time, why is the media playing along? The same reason they don't cover genocide in Libya, Yemen, Syria, and Iraq.

Posted by: wodun | May 20, 2015 10:30:56 AM

This was the first time non-Democrats had started to organize and protest like Democrats do so this was new to the IRS but Democrat activist groups have been applying for tax exempt status for decades so the issue itself is hardly new.

This article ignores the fact that nonprofits have been around a loooooong time and been engaged in activism and politics the entire time.

It was only when non-Democrats did this that it became an issue at the IRS. Also, some of the groups were not Republican but they were related to Israel, a country that Obama and the Democrats detest.

There wasn't just a political angle but also a racial one in determining who was persecuted.

Posted by: wodun | May 20, 2015 10:27:33 AM

The problem with that determination is it lacks an explanation for why review was not evenly applied. If, as suggested, proper review is reserved for conservative agencies, that would still qualify as targeting.

Posted by: James | May 20, 2015 9:31:20 AM

Apparently the rule is: "If the NY Times or Jon Stewart will give us a hard time, change rules and enforcement as necessary to get them off our backs." The IRS outsources politically biased enforcement to the media.

Posted by: AMTbuff | May 20, 2015 8:20:11 AM