Paul L. Caron
Dean


Saturday, August 13, 2016

The IRS Scandal, Day 1192

IRS Logo 2Daily Signal, Accountability for IRS? What’s Next After New Court Decision:

The IRS has not stopped targeting conservative groups seeking nonprofit status, a federal appeals court has ruled in deciding to reinstate a lawsuit against the agency.

The U.S. Court of Appeals for the District of Columbia Circuit overturned a decision by a lower court that threw out the lawsuit because the Internal Revenue Service had promised voluntarily to end discriminatory practices.

The IRS insisted “there is no reasonable expectation” that discrimination will reoccur, the ruling noted, because the tax agency has “suspended until further notice” tactics it used to target the applications of tea party and other conservative groups for nonprofit status.

That reassurance was unsatisfactory to the appeals court because it appeared temporary. “There is a difference between the controversy having gone away and simply being in a restive stage,” Senior Judge David B. Sentelle, who was appointed by President Ronald Reagan, wrote in a unanimous decision by a three-judge panel. As a result, Sentelle wrote in the opinion released Friday, citing case law, the IRS “is free to return to [its] old ways—thereby subjecting the plaintiff to the same harm, but, at the same time, avoiding judicial review.”

Conservatives greeted the decision as proof that the tax agency isn’t serious about cleaning up its act. “They only stopped the targeting while people were paying attention. They had no intention of stopping the illegal conduct altogether,” lawyer John Eastman told The Daily Signal. ...

While the federal appeals court declined to hold individuals inside the IRS personally responsible for damages, it did agree with Eastman’s argument that political discrimination inside the agency was an ongoing problem. Any suggestion that the IRS no longer targets conservative groups, Sentelle wrote, “is absurd” in light of the fact that “two of the appellant-plaintiff’s applications remain pending.” ...

Conservatives celebrated the decision, which remanded the lawsuit to a lower court for trial and makes possible further discovery, a pretrial procedure that allows plaintiffs to search for additional pertinent information. ... In his interview with The Daily Signal, Eastman, former dean of Chapman University School of Law in Orange, California, predicted the discovery will unearth new facts about the IRS that are “going to be even more explosive than anything we’ve seen so far.”

Plaintiffs would look for evidence of collusion among government agencies, Eastman explained. It would be illegal, for example, if the IRS shared information about conservative nonprofits with the FBI for additional review.

That’s within the realm of possibility, Eastman said, considering the experience of Catherine Engelbrecht, founder and president of True the Vote. After her organization, which aims to curb voter fraud, applied for nonprofit status in 2010, Engelbrecht told The Daily Signal, she came under investigation by three government agencies all at once. As first reported by National Review in 2013, the IRS requested she turn over every social media post she’d ever written, lists of political organizations she has addressed, and information on any family members interested in running for public office.

Engelbrecht and her family’s business became the target of probes by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Occupational Safety and Health Administration as well as the FBI. If any evidence of collusion exists among these agencies, Eastman told The Daily Signal, government employees involved could face “serious, five-years-in-prison types of felonies.”

https://taxprof.typepad.com/taxprof_blog/2016/08/the-irs-scandal-day-1192.html

IRS News, IRS Scandal, Tax | Permalink

Comments

Could the IRS get the case mooted by approving the remaining two applications? I was going to say I didn't know why they didn't do that already, but I realized why. Keeping those two applications open allowed them to move to dismiss as moot and delay things an extra few months before they lost. Now they can approe those two applications and, I bet, make a new motion for mootness, one that would probably win, unless the question remains of money damages.

Posted by: Eric Rasmusen | Aug 13, 2016 12:23:26 PM

Try Obama's IRS defense the next time you are in court for doing something illegal. The But I Stopped Defense wouldn't fly.

Posted by: wodun | Aug 13, 2016 2:55:35 PM

Mr. Rasmusen: There can be no monetary liability assessed in this case, based on the D.C. Circuit’s decision. The Court of Appeals affirmed the dismissal of the Bivens counts against the individuals, along with the wrongful disclosure counts against the U.S. The former would have permitted money damages against the individuals, while the latter would have permitted claims for “actual” damages against the United States. Both sets of counts were dismissed. Slip op. 5, 7, 10. What survived are the APA claims for declaratory and injunctive relief, i.e., requests for equitable relief requiring the IRS to cease from using BOLO lists and to complete the processing of the various plaintiffs’ IRC 501(c)(4) claims. It is not clear how declaratory relief would lie, since the Declaratory Judgment Act, by its terms does not pertain to federal taxes.

Mr. wodun: Generally, in order to obtain an injunction, a plaintiff must prove an imminent threat. So if the applications are granted, what is the imminent threat?

Posted by: Publius Novus | Aug 13, 2016 6:00:37 PM

Publius,

Still waiting for some straight answers. As a self-described authority on federal law, you're not off the hook:

http://taxprof.typepad.com/taxprof_blog/2016/08/the-irs-scandal-day-1181.html

Posted by: MM | Aug 13, 2016 10:02:48 PM

Mr. MM: You are the only one who has ever described me as an authority on anything, a characterization I would never accept in any event. And I have answered all of your questions, though you choose, without any authority or reasoning yourself, to disagree with a few of my responses. May I recommend that you "get a life?"

Posted by: Publius Novus | Aug 14, 2016 8:54:22 AM

Publius,

I've never claimed authority on federal law, that's your racket. But I spent quite a bit of time and effort reasoning my way through the statutes, and quoted them where relevant to make my arguments.

So long as you frequent this blog and make lazy political arguments, I feel an obligation to hold your feet to the fire. But I'll be happy to get a life just as soon as you answer those few direct questions I put to you. They should be easy, after all, you're an expert on the law, and stated categorically that it hadn't been violated.

So, either you're unable or unwilling to simply quote the law as written. Which is it?

Posted by: MM | Aug 21, 2016 11:50:38 AM