Paul L. Caron

Tuesday, October 18, 2016

The IRS Scandal, Day 1258: Judge Orders IRS to Clear Tea Party Application Backlog Within Month

IRS Logo 2American Center for Law and Justice, Major Victory: IRS Ordered to Issue Outstanding Determinations & Answer for Political Targeting of Citizens:

Three years after we filed a lawsuit on their behalf, and for some, nearly seven years after they submitted their applications for tax-exempt status, the grassroots conservative groups that were targeted by the IRS for their political views are finally receiving some of the relief to which they have long been entitled—determinations on those applications.

In early August, the federal appellate court for the District of Columbia Circuit held that the plaintiffs who filed suit in Linchpins of Liberty, et al. v. United States, et al. in 2013 had set forth allegations sufficient to obtain actual evidence about the IRS’s targeting of conservative tax-exempt applicants based on their names and political positions. The D.C. Circuit thus reversed the decision of the district court (which had previously dismissed the claims on the grounds that the IRS had apparently ceased the targeting conduct) and sent the case back to the lower court, explaining that the IRS had failed to demonstrate that either the targeting scheme, or its effects on plaintiffs, had actually ended.

Last week, District Judge Reggie B. Walton held a status conference to resume the lower court proceedings in the case. While the IRS’s attorney once again took the position that most of the claims are moot because most of the plaintiff organizations have received determinations, the court picked up where the D.C. Circuit left off, and ordered that the IRS cease delaying determinations on any outstanding tax-exempt applications of Tea Party groups and other grassroots organizations. He gave the IRS thirty days to comply.

It will be seven years this December since one of our clients awaiting a final determination – Albuquerque Tea Party – submitted its tax-exempt application. Another client – Unite in Action – has been waiting six and a half years since filing its application in May 2010. As a result of Judge Walton’s order, these years-long application processes are finally concluding, and the organizations are receiving the review and determinations they deserve. This is a major victory.

Judge Walton also agreed with our position, affirmed by the appellate court, that the IRS cannot obtain dismissal of the case simply by issuing the remaining determinations but must also produce evidence showing that any negative effects of the targeting on plaintiffs have been completely and irrevocably eradicated. Specifically, we urged, and the court agreed, the IRS must answer such questions as: What was the determination process prior to the targeting? How and why did the targeting begin? What treatment did plaintiffs’ applications receive during the targeting? What assurances are currently in place that plaintiffs will not suffer further retaliation or discriminatory treatment at the hands of the IRS?

As a result of this order, the IRS will, at long last, be required to disclose the details of the lawless and unconstitutional Tea Party targeting scheme. The court’s requirement that the IRS give account for its conduct is a tacit acknowledgment that plaintiffs—as well as the American public—deserve honesty and transparency from their government.

We are pleased that the court has taken this first step and look forward to a resolution of this case that will hopefully include the first judicial acknowledgment of the unmistakably unconstitutional nature of the IRS’s egregious political targeting of U.S. citizens.

IRS News, IRS Scandal, Tax | Permalink


Nothing, huh, Pubs?

Not a really a surprise, from the self-appointed arbitrar of the facts...

Posted by: MM | Oct 20, 2016 7:03:53 PM


I'll respond despite my better judgment, though there's plenty of irony in you demanding sources that you've already decided to reject arbitrarily because you don't like the facts reported. That's a personal problem, by the way, and one of the oldest logical fallacies in the book.

Nowhere in that TIGTA report does it name Mr. Shafer as the manager responsible for developing the original BOLO list. Nor does it state that he approved its widespead use by the EO unit. To this day, the official who was responsible for the original BOLO list has never been personally identified. Even Lois Lerner claimed she didn't know:

"In July 2010, the IRS developed what was called a BOLO list. It instructed agents to send [Elizabeth] Hofacre applications from organizations involved with the Tea Party movement. Investigators have not yet established who created or authorized that list; such lists did not exist before 2010."

And Shafer has stated publically he had no knowledge of the original BOLO list:

"Investigators asked him [Shafer] about the development of the BOLO notice that told agents to flag Tea Party files. Shafer said he didn't know much about it. Investigators asked him what happened to the applications after they were identified as Tea Party cases. He said he didn't know."

Why is your first act in these discussions to always cherry-pick, equivocate, and make false and misleading statements? In looking back at past discussions, you've been trying to pin this on Mr. Shafer exclusively, which matches exactly Representative Cummings' talking points. He's been actively undermining Congressional oversight since a month in to the scandal back in 2013.

I'd also love to know who was running "Group 7822" which replaced the BOLO process and kept conservative groups' applications buried for years, some still pending approval. Of course, you're the last person I'd ask for the unvarnished truth on these issues...

Posted by: MM | Oct 19, 2016 9:01:23 PM

Not exactly. The TIGTA report alone without the additional information from both TIGTA and IRS employee testimony paints an incomplete picture. You have to remember TIGTA is an audit agency, not an investigative one. They evaluate processes and ask some questions but they cannot subpoena anything or compel testimony.
Getting back to my questions after reading the TIGTA report and various testimony…
1) Who ordered the tea party cases moved to DC? Maybe I’m reading a different TIGTA report but all mine says is that the Acting Director of the Technical Unit (in DC) ordered some cases to DC. I don’t know who that was at the time and we don’t know if anyone told him to do it. I would note that the Technical Unit reported to Holly Paz who reported to Lois Lerner

2) Who decided to treat them different from all other cases with the extra-long wait times and intrusive/illegitimate questions? This isn’t addressed very well in the TIGTA report. It focuses a lot on what was happening and a lot less on why/who. From Carter Hull’s (Technical Unit specialist first assigned some tea party test cases in the spring of 2010) testimony we learn that sometime in the fall of 2010 he finished his work on the cases and made his recommendations but he was never given approval to go forward with his recommendations. Instead he was instructed by Lois Lerner’s Technical Advisor that the cases would need to be run through her and the Office of Chief Counsel. He testified that this was the first time anything like this had ever happened. Then nothing appears to happen until the summer of 2011 when the Office of Chief Counsel got back with Hull and said they needed updated information because the info on the application was now dated (since they had been sitting on it) and they wanted to send out another letter asking for information. Around this point Hull was taken off the case but we do know that those particular (and many other) tea party cases continued to languish while the executives and lawyers in DC kept going in circles. Cindy Thomas (head of the Cincinnati office) testified that she was continually asking DC for guidance during this time and that all of the tea party cases they had were in a holding pattern because DC would never give them direction. So, does that mean it was Lerner who was behind it - or Lerner and the Office of Chief Counsel – or did someone else tell them to do it?

3) Who in the office of Chief Counsel was involved and why? I never saw any “who’s” in office of Chief Counsel identified. Or for that matter any “why’s”. Hull testified that it was unusual.

Posted by: sigh | Oct 19, 2016 7:06:42 PM

Mr. MM: I don’t know where you get your information, but mine comes from the TIGTA ROI “Inappropriate Criteria Were Used etc.” A redacted version is available online. It has a detailed timeline. ROI, pp. 30-42. There is no question but that the BOLO was developed and used in Cincinnati in August 2010 by the supervisor of the Determinations Unit [John Shafer]. ROI, p. 30. “The BOLO listing was developed by the Determinations Unit in order to replace the existing practice of sending separate e-mails to all Determinations Unit employees as to cases to watch for, potentially abusive cases, cases requiring processing by the team of specialists, and emerging issues.” ROI p. 33. The Director, EO [Lerner] learned of the BOLO almost a year later, in July 2011. ROI, p. 30. Those are the facts. BTW, Mr. sigh’s questions are answered in the ROI as well.

Posted by: Publius Novus | Oct 19, 2016 9:01:33 AM


I'm wondering if you're uniformed or just dishonest? Please use some basic reading comprehension:

Shafer did not develop the BOLO list. He claims he flagged the first Tea Party group for scrutiny because "it was a new, high-profile issue."

Liz Hofacre created the formal BOLO list that was then institutionalized and rolled out to everybody to use in the EO division in order to target groups based on their names and political positions. She claimed that a manager at the Cincinatti office instructed her to do so.

I'd just like to know who in the IRS gave the green light to this BOLO list and instructed everybody to behave in a politically discriminatory way and violate these groups' right to Equal Protection before the law.

I know from past discussions that you really don't care who made this decision to go after groups you don't like politically. And since you have nothing useful to contribute to the discussion, I'll just take your flippant and misleading comments for what they are: the end result of a hack living in a bubble...

Posted by: MM | Oct 19, 2016 6:56:06 AM

he IRS cannot obtain dismissal of the case simply by issuing the remaining determinations but must also produce evidence showing that any negative effects of the targeting on plaintiffs have been completely and irrevocably eradicated.

That can't be done without a time machine.

Good to see the judge not fall for the but I stopped beating someone so its totally cool defense.

Posted by: wodun | Oct 19, 2016 12:42:45 AM

The BOLO list is irrelevant. It has existed for some time yet nothing like the tea party scandal ever took place before. The key issues/questions are:
1) who ordered the tea party cases moved to DC
2) who decided to treat them different from all other cases with the extra-long wait times and intrusive/illegitimate questions
3) who in the office of Chief Counsel was involved and why

I’m not holding my breath. The court may make the IRS give answers but they can’t make them give honest answers (given the destruction of records)

Posted by: sigh | Oct 18, 2016 6:46:02 PM

Mr. MM: Then how do I know that it was Screening Group Manager John Shafer, the "Cincinnati supervisor" and self-identified Republican, who developed the first BOLO list? Pay attention.

Posted by: Publius Novus | Oct 18, 2016 11:09:47 AM

How about who, specifically, developed the original BOLO list that used names and political positions as criteria? This mystery official has never been named publicly.

Posted by: MM | Oct 18, 2016 7:49:18 AM