Paul L. Caron
Dean


Friday, July 31, 2015

The IRS Scandal, Day 813

IRS Logo 2Wall Street Journal editorial, The Taxman’s Politics: New Evidence That IRS Bias May Have Extended to Tax Audits:

The Obama Administration has made a two-year career of dismissing concern about IRS policies targeting conservative tax-exempt groups. That evasion just got harder. New information shows the agency may have shown similar bias in tax audits.

A new Government Accountability Office report says protocols in place at the IRS Exempt Organizations unit made it possible for groups to be unfairly targeted for audit “based on the organization’s religious, educational, political, or other views.” That’s our emphasis. The report also shows a process that allowed reviewers to wield significant discretion over whether certain groups were selected for scrutiny. ...

The IRS is dismissing the findings as hypothetical. At a House Ways and Means hearing Thursday, IRS Commissioner John Koskinen told Rep. Peter Roskam that “at this point we do not have indications that anyone improperly was selected for an exam.” But information from Treasury Inspector General for Tax Administration J. Russell George suggests IRS audit selection has already led to improperly selected audits.

In fiscal years 2013 through 2015, Mr. George initiated 102 internal investigations based on complaints by tax-exempt groups and individuals who say they were unfairly targeted for audit. It’s not public how many of those 102 may have been improperly targeted. But according to the House Ways and Means Committee, 12 presented facts so egregious that the IRS referred them to the Justice Department for criminal prosecution. Not for tax evasion, mind you, but for improper conduct by IRS employees.  

A criminal referral is a big step, suggesting the audit selections met a high bar of evidence that IRS employees may have knowingly violated the law when choosing an audit target. Thursday’s hearing also included testimony from groups that believe they were improperly audited. ...

Mr. Koskinen, the IRS director, has already shown through his previous stonewalling that his assurances can’t be trusted. We hope Congress keeps digging into the growing evidence of a politicized tax agency.

New York Times editorial, The I.R.S. Gives Up on ‘Dark Money’:

The federal government has all but surrendered to the powerful, rich donors whose anonymous contributions threaten to undermine the 2016 elections. The commissioner of the Internal Revenue Service, John Koskinen, signaled as much on Thursday when he told a House committee that there would be no change in the tax code in 2016 to end its growing abuse by political operatives using nonprofit “social welfare” institutions to disguise the identities of affluent campaign contributors.

“I don’t want people thinking we are trying to get these regs done so we can influence the election,” Mr. Koskinen declared later to reporters. The statement was remarkable for blessing further procrastination at the I.R.S., whose clear obligation is to enforce existing law in a way that would end the current flood of “dark money” financing politics. The commissioner said the earliest that tighter rules could take effect would be 2017. The I.R.S. has been increasingly timorous on this issue ever since House Republicans opened partisan hearings into complaints that I.R.S. officials have been biased against conservative political groups that claim tax exemptions as nonprofit social welfare groups.

The fact is, the I.R.S. should be dedicated to enforcing the law against phony social welfare claims by all political schemers, from the right or the left. This abuse of the tax law mushroomed after the Supreme Court’s reckless Citizens United decision in 2010 that ended limits on campaign spending by corporations and unions. Since 2006, when only $5.2 million was spent by exempt organizations that do not disclose donors, spending increased 60-fold, to more than $300 million in the 2012 presidential cycle, according to the Center for Responsive Politics. An even bigger infusion is expected in 2016 from big-money donors shielded by the social welfare fiction. ...

It is a gross insult to taxpayers to make them underwrite the brazen evasions of campaign operatives bundling dark money. The abuse is compounded by the latest I.R.S. retreat from its responsibility.

https://taxprof.typepad.com/taxprof_blog/2015/07/the-irs-scandal-day-81.html

IRS News, IRS Scandal, Tax | Permalink

Comments

And today, we learn that Organizing for America, Obama's former campaign organization that received preferential treatment getting tax exempt status, is being ordered by the President, along with several other non-profits, to engage in political activism in an effort to pressure congress to support this giving Iran nuclear weapons deal.

Where is the IRS now? Still doing what Obama tells them to do.

Posted by: wodun | Jul 31, 2015 10:09:52 AM

Methinks that if the WSJ is complaining from the right and NYT is complaining from the left, on the same general topic, the IRS is probably steering the correct course.

Posted by: Publius Novus | Jul 31, 2015 2:09:49 PM