The Cynics Were Right (The IRS Scandal Gets Official Confirmation)

The Treasury Inspector General for Tax Administration’s (TIGTA) report on the targeting of Tea Party and other conservative groups was released late today. If you were to step back in time to May 1st, you would have said that everything being alleged to have been occurring were paranoid delusions. Today we find that the cynics were absolutely correct. First, the conclusions of the report:

  1. The Determinations Unit developed and used inappropriate criteria to identify applications from organizations with the words Tea Party in their names….
  2. The Determinations Unit developed and began using criteria to identify potential political cases for review that inappropriately identified specific groups applying for tax-exempt status based on their names or policy positions instead of developing criteria based on tax-exempt laws and Treasury Regulations….
  3. While the team of specialists reviewed applications from a variety of organizations, we determined during our reviews of statistical samples of I.R.C. § 501(c)(4) tax-exempt applications that all cases with Tea Party, Patriots, or 9/12 in their names were forwarded to the team of specialists. [I’ll discuss the specialists a little later.]
  4. Organizations that applied for tax-exempt status and had their applications forwarded to the team of specialists experienced substantial delays. As of December 17, 2012, many organizations had not received an approval or denial letter for more than two years after they submitted their applications….
  5. [T]he Determinations Unit requested irrelevant (unnecessary) information because of a lack of managerial review, at all levels, of questions before they were sent to organizations seeking tax-exempt status….

So let’s look at all the allegations that had been alleged. First, that Tea Party groups were targeted. They were.

Next, that a “special unit” had been developed to look at them. There was such a special unit (see the reference above to a team of specialists).

Next, that information was requested from Tea Party groups that shouldn’t have been. True again.

There’s more, though. First, this scandal was not caused in Cincinnati. As Joe Kristan noted in his analysis,

Although the processing of some applications with potential significant political campaign intervention was started soon after receipt, no work was completed on the majority of these applications for 13 months. This was due to delays in receiving assistance from the Exempt Organizations function Headquarters office.

That means a big part of the problem was in Washington, not just in Cincinnati, as the spinners would like us to believe. [Emphasis in original.]

So Washington was involved. And like a bad infomercial, there’s more (from the TIGTA report):

After being briefed on the expanded criteria in June 2011, the Director, EO, immediately directed that the criteria be changed. In July 2011, the criteria were changed to focus on the potential “political, lobbying, or [general] advocacy” activities of the organization. These criteria were an improvement over using organization names and policy positions. However, the team of specialists subsequently changed the criteria in January 2012 without executive approval because they believed the July 2011 criteria were too broad. The January 2012 criteria again focused on the policy positions of organizations instead of tax-exempt laws and Treasury Regulations. After three months, the Director, Rulings and Agreements, learned the criteria had been changed by the team of specialists and subsequently revised the criteria again in May 2012.

These directors are in Washington, not Cincinnati. And these are people one to three levels below the IRS Commissioner. The chance of either then-IRS Commissioner Douglas Shulman or current Acting Commissioner Stephen Miller having been truthful in their testimony to Congress–where both individuals denied having any knowledge of the targeting of Tea Party Groups–is about zero in my eyes.

The TIGTA report was commissioned because,

TIGTA initiated this audit based on concerns expressed by members of Congress. The overall objective of this audit was to determine whether allegations were founded that the IRS: 1) targeted specific groups applying for tax‑exempt status, 2) delayed processing of targeted groups’ applications, and 3) requested unnecessary information from targeted groups.

TIGTA was not asked (and has no conclusions on) why this practice began. Did someone at the IRS spontaneously decide that targeting organizations on the right (politically) was a great idea? Did someone at the White House ask the IRS to implement this policy? We don’t know the answer to that question. Since we know that other offices were involved (El Monte and Laguna Niguel), why were they involved? Who directed them to be involved? There are plenty of questions that still need answering.

I suspect the Congressional hearings will be a spectacle.

ABC published a list of some of the questions. Some are ridiculous and obviously impossible to answer (one asked for all stories published about an applicant).

Congressman Darrell Issa (R-CA, Chairman of the House Oversight Committee):

“How dare the administration imply that they’re going to get to the bottom of it,” said Issa in an interview on CBS’s “This Morning.”

“This was the targeting of the president’s political enemies effectively and lies about it during the election year so that it wasn’t discovered until afterwards,” he added. “The fact is this is the kind of investigation that has to be open and transparent to the American people.”

EPA waives fee requests for “green” groups but not conservative groups. While I won’t be covering this in detail, it sure looks like a pattern. And the FCC helps pro-net neutrality groups but not conservative groups on Freedom of Information Act requests. It’s the appearance of impropriety that’s the issue…and there’s more than an appearance here.

It has been an interesting few days to be a tax blogger.


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