The IRS Scandal Expands
Partisan targeting by the IRS should not be permitted to stand.
On Friday, the Internal Revenue Service issued what it called an apology to Tea Party affiliated and other conservative groups after it was revealed that employees of the agency had been unfairly singling these groups out for further scrutiny in response to their applications for tax exempt status. At the time, the agency said that the activity had occurred last year and that it was limited to a group of IRS employees at a single regional IRS Service Center responsible for processing the applications. In its statement, the agency claimed that this had all occurred without the knowledge of senior IRS employees and, again, that it had only happened last year. A report by the agency’s Inspector General is supposed to be released sometime later this week, but we’ve already learned that it will state that the harassment of conservative groups started earlier that 2011, and that senior IRS officials were aware of it far earlier than the initial statement claimed:
WASHINGTON (AP) — Senior Internal Revenue Service officials knew agents were targeting tea party groups as early as 2011, according to a draft of an inspector general’s report obtained by The Associated Press that seemingly contradicts public statements by the IRS commissioner.
The IRS apologized Friday for what it acknowledged was “inappropriate” targeting of conservative political groups during the 2012 election to see if they were violating their tax-exempt status. The agency blamed low-level employees, saying no high-level officials were aware.
But on June 29, 2011, Lois G. Lerner, who heads the IRS division that oversees tax-exempt organizations, learned at a meeting that groups were being targeted, according to the watchdog’s report. At the meeting, she was told that groups with “Tea Party,” ”Patriot” or “9/12 Project” in their names were being flagged for additional and often burdensome scrutiny, the report says.
The 9/12 Project is a group started by conservative TV personality Glenn Beck. In a statement to the AP, Beck suggested that the revelations were hardly news to him and other conservatives.
“In February 2012, TheBlaze first reported what the IRS now admits to — that they unfairly targeted conservative groups including the 9/12 project,” Beck said, citing his website and TV network. “It is nice to see everyone else playing catch-up and finally asking the same questions that TheBlaze started raising over a year ago.”
Lerner instructed agents to change the criteria for flagging groups “immediately,” the report says.
The Treasury Department’s inspector general for tax administration is expected to release the results of a nearly yearlong investigation in the coming week. The AP obtained part of the draft report, which has been shared with congressional aides.
Among the other revelations, on Aug. 4, 2011, staffers in the IRS’ Rulings and Agreements office “held a meeting with chief counsel so that everyone would have the latest information on the issue.”
On Jan, 25, 2012, the criteria for flagging suspect groups was changed to, “political action type organizations involved in limiting/expanding Government, educating on the Constitution and Bill of Rights, social economic reform/movement,” the report says.
While this was happening, several committees in Congress were writing numerous letters IRS Commissioner Douglas Shulman to express concern because tea party groups were complaining of IRS harassment.
In Shulman’s responses, he did not acknowledge targeting of tea party groups. At a congressional hearing March 22, 2012, Shulman was adamant in his denials.
“There’s absolutely no targeting. This is the kind of back and forth that happens to people” who apply for tax-exempt status, Shulman said at the House Ways and Means subcommittee hearing.
Predictably, news that IRS agents were singling conservative organizations out for further scrutiny has led to something of an “I told you so” argument on the right. As the AP notes in the linked article, there had been complaints from many of these grassroots organizations that they were being subjected to undue scrutiny as part of their application for tax exempt status. At the time, these claims were largely ignored by the mainstream media and the IRS’s denial that anyone was being targeted based on their political beliefs was taken at face value. To some extent, I would argue that these groups are right to feel this way because it turns out that they were right, they were indeed being singled out because of their political beliefs. As The Washington Post explained in an editorial published yesterday, that is a very serious matter:
A BEDROCK principle of U.S. democracy is that the coercive powers of government are never used for partisan purpose. The law is blind to political viewpoint, and so are its enforcers, most especially the FBI and the Internal Revenue Service. Any violation of this principle threatens the trust and the voluntary cooperation of citizens upon which this democracy depends.
So it was appalling to learn Friday that the IRS had improperly targeted conservative groups for scrutiny. It was almost as disturbing that President Obama and Treasury Secretary Jack Lew have not personally apologized to the American people and promised a full investigation.
“Mistakes were made,” the agency said in a statement. IRS official Lois Lerner explained that staffers used a “shortcut” to sort through a large number of applications from groups seeking tax-exempt status, highlighting organizations with “tea party” or “patriot” in their names. The IRS insisted emphatically that partisanship had nothing to do with it. However, it seems that groups with “progressive” in their titles did not receive the same scrutiny.
If it was not partisanship, was it incompetence? Stupidity, on a breathtaking scale? At this point, the IRS has lost any standing to determine and report on what exactly happened. Certainly Congress will investigate, as House Majority Leader Eric Cantor (R-Va.) promised. Mr. Obama also should guarantee an unimpeachably independent inquiry.
The Wall Street Journal agrees:
Just because you’re paranoid doesn’t mean the IRS isn’t out to get you. We only wish that were a joke. On Friday, an Internal Revenue Service official disclosed for the first time, and by way of apologizing, that the agency that wields the taxing power of the federal government had targeted conservative groups for special scrutiny during the 2012 election season. Apology or not, that can’t be the end of the matter.
The stunning admission didn’t emerge in an official statement by a senior official at the Treasury Department, which supervises the IRS. Instead, IRS Director of Exempt Organizations Lois Lerner disclosed it on Friday in response to a question from the audience at a meeting of American Bar Association tax lawyers in Washington, D.C.
Ms. Lerner acknowledged that the agency had flagged groups with the words “tea party” or “patriot” to have their tax returns inspected, presumably with an eye on the legality of their tax exemption. Ms. Lerner called this “inappropriate,” which it certainly was, and she said it wasn’t done “out of any political bias,” which is hard to believe. If there was no political bias, why were only conservative groups targeted? White House spokesman Jay Carney also called the IRS actions “inappropriate” on Friday, which makes that the word of the day.
It’s important to understand that the timing of these requests, in the middle of the 2012 campaign, had the effect of stifling political activity. The targeted groups had tax-exempt status that allowed them to participate in certain kinds of political messaging. But any such group receiving IRS missives is immediately going to become cautious, lest it risk the arbitrary wrath of some tax official. The speech-squelching effects may have been especially important in Ohio, which was ground zero in the battle for the White House.
Republicans were up in arms Friday about the IRS disclosure, and rightly so. We assume they will use their oversight power in the House to find out what happened, and whether these Cincinnati kids were really operating on their own.
Other than the power to prosecute, the taxing authority is the most awesome power the government has. It can ruin people and companies. When wielded for political purposes, it is a violation of the basic contract the American people have with their government. The abuse admitted by Ms. Lerner can’t be dismissed in a casual apology on a casual Friday as no big deal. It’s a very big and bad deal.
An official with the American Civil Liberties Union called, speaking before the latest revelations had been made public called the idea of the IRS using partisan criteria to target taxpayers “about as constitutionally troubling as it gets.” He’s right. There have been other times in our history when government agencies that are supposed to be politically neutral have been used for partisan purposes. Most famously, this occurred during the Watergate scandal when the Nixon-era IRS was used to target political enemies of the President. Indeed, those activities were part of one of the Articles of Impeachment filed against President Nixon before he resigned from office in 1974. In the wake of that scandal, laws were changed in an effort to ensure that the agency would be less subject to intimidation or abuse by the political branches of government. For example, there are now only a handful of positions in the agency that are subject to Presidential appointment and their terms are staggered such that they don’t coincide with the assumption of power of a particular Administration. This is also true of the Director of the FBI and the members of the Federal Reserve Board and its Chairman, among others. The intention is to give the IRS Commissioner some degree of political independence and it seems as though it has generally worked well. Indeed, the individual served as IRS Commissioner up until last November was appointed by George W. Bush and the position is currently being filled by an Acting Commissioner until President Obama makes his own appointment, who will serve well into the first term of whomever is elected President in 2016.
There is no evidence in this case that there was outside political pressure on the IRS in this particular case, of course, but that doesn’t mean that there aren’t serious issues raised by the fact that groups were being targeted based on their political ideology. In it’s initial statement, the IRS claimed that this was an isolated incident and that only a small handful of workers were involved. The latest revelations, though, suggest that there was something more pervasive going on, and the fact that senior IRS officials were aware of the problem two years ago raises other serious issues. As noted above, when this issue was being investigated by Congress last year, outgoing IRS Commissioner Douglas Shulman testified that there was no political targeting going on. Now however, we know that individuals within the IRS as highly place as the agency’s Chief Counsel were aware that it was in fact happening way back in 2011. Did Shulman know about this as well, or was this information kept from him for some reason? If he did know, what did he do in response to it, and why did he tell Congress that there wasn’t any targeting going on when he testified in March of 2012? Finally, did anyone at the Treasury Department, of which the IRS is a part, have any knowledge of what was going on here, and what did they do to try to stop it if they did?
At the very least, this is a matter that demands Congressional investigation, and there are already indications that committees in both the House and the Senate will be taking this matter up. I’d also argue that the people involved in this matter, including supervisors who were aware of what was going on, should be disciplined, or even terminated, for allowing it to continue. There may also be grounds for a criminal investigation if it turns out that any of the IRS employees involved broke any laws in this matter. This isn’t a matter that should be taken lightly, and the IRS’s apology should not be permitted to be the end of this matter.
There should be an investigation, but it doesn’t sound like what happened was anything other than corner-cutting.
The number of groups filing for this tax-exempt status more than doubled from 2010 to 2012, to more than 3,400. To handle the influx, the IRS centralized its review of these applications in an office in Cincinnati.
Lerner said on Friday this was done to develop expertise among staffers and consistency in their reviews. As part of the review, staffers look for signs that groups are participating in political activity. If so, IRS agents take a closer look to make sure that politics isn’t the group’s primary activity.
As part of this process, agents in Cincinnati came up with a list of things to look for in an application. As part of the list, they included the words “tea party” and “patriot,” Lerner said.
“It’s the line people that did it without talking to managers,” Lerner told the AP on Friday. “They’re IRS workers, they’re revenue agents.”
In all, about 300 groups were singled out for additional review, Lerner said. Of those, about a quarter were singled out because they had “tea party” or “patriot” somewhere in their applications.
Lerner said 150 of the cases have been closed and no group had its tax-exempt status revoked, though some withdrew their applications.
So basically, according to the IRS, ‘tea party’ or ‘patriot’ were words used to filter out groups that should be looked for additional review. Basically, some employee decided that ‘tea party’ pointed to a group’s overall political nature and didn’t follow procedure.
If the story holds, the IRS wasn’t singling out conservative groups for further scrutiny. There were 300 groups selected, of which the Tea Party was 75. That’s not even singling out, in any known use of the term, actually.
Tea party exempt orgs were obviously all over the place 2010 forward. So many new orgs claiming exempt status, only natural they get flagged by IRS. Getting exempt status is a great way to make more money, which I am sorry to say is the main goal of tea party peddlers. If you are doing nothing wrong you will be fine, which was the case for most of these orgs. Would be interested in how many tea party type groups formed in the past few years benchmarked against similar organizations, I would bet it is exponentially high
You cannot justify this by being “short handed” or tea party bashing. What’s to say that all Mexican surname people souldn’t be targeted to inquire of their legal status? What’s to stop the IRS from singling out single white males between the ages of 18-30 – you know, the ones that are profiled to be the latest assault-weapon murderers, and inquiring into their their credit, their bank accounts? Think it can’t happen? Well it just did. Every American should be outraged over the intimidation tactics used by a “handful” of employees who represented the IRS in each and every way. To sit back and justify it means you don’t have clear concept of what this misuse of power means to your individual rights and freedom.
Let me break this down for you: applying for tax-exempt status is not like walking down the street or simply being. It’s a real thing, with criteria to be met. Any organization that wants to be tax-exempt has to be ready to show that they meet the criteria. It’s not intimidation for the IRS to review these organizations.
@Modulo Myself: Bu the IRS is admitting its employees unfairly targeted conservative groups. So it does mean there was some sort of intimidation or vindictiveness involved in the process.
I don’t like these groups, but they have rights and those rights should be defended and respected.
There’s a simple answer to this: let’s see a list of liberal-oriented groups that got asked the same kinds of questions the Tea Party groups were asked. I’m sure that Media Matters, Center for American Progress, American Bridge, New America Foundation, the Open Society Institute, et al, were studied just as closely.
They also targeted organizations who wanted to educate people about the Constitution and the Bill of Rights.
Harvard’s tax exempt status was never in jeopardy.
Oh, and they targeted Jewish organizations as well. One is interesting because the lawsuit in one of those cases is scheduled to have hearings on July 2. What fun, systemic corruption of the basic rule of law and Constitution. I wonder if the statute of limitations runs out before Obama leaves office? If not, some people could have a real rough road ahead.
’He has, through his subordinated and agents, endeavored…to cause, in violation of the constitutional rights of citizens, income tax audits or other income tax investigation to be initiated or conducted in a discriminatory manner,’ — Section 1, Article 2, the impeachment articles of Richard Nixon.
Drafted by House Democrats with Hillary Clinton on staff, btw.
Well, with tax revenues falling short of paying for the cost of government, it should only be expected that some IRS agents might look at some groups that they might be confused as tax protester groups when they give themselves names like “Tea Party”. Maybe, the only dumber thing some political groups could do would be to name themselves with something that sounds like al Qaeda associates or something. Creating names after the legendary Boston Tea Party tax protest and not expecting some sort of IRS scrutiny goes beyond amazing for me. Some names just ask for problems with government or police agencies.
@Jenos Idanian #13: Also, let’s see the key search words that might appear in a left-leaning organization’s applications, like “progressive”.
Has anyone access to the list of search words, or a link to such? Modulo Myself, I’m not nearly as comfortable with this as you are!
The IRS Commissioner should be fired tomorrow. This is utterly intolerable. Heads should roll, someone in a position of genuine power should be fired. This is not some phony bullsh!t like Benghazi or even just sheer stupidity like Fast and Furious, this is a real thing, this is a real scandal, someone should pay the price. And it should be thoroughly investigated.
Fire anyone who was involved up to the head of the IRS. I don’t like the tea party, but there is no room for this kind of crap. Zero tolerance.
Equal protection under the law is for everyone. My political opponents are every bit as entitled to it as I am.
Organizations named with politically charged words are being scrutinized to see if they are participating in political activity that would violate their tax-exempt status.
The Republicans are howling, but that’s what Republicans do. It this howl a more meaningful howl than Benghazi, Birth Certificate or Death Panels? Who can tell?
I’m not seeing the deep harm here, other than that far too many political organizations are given tax-exempt status and we should be staffing the IRS adequately to scrutinize all of them.
That’s fine, as long as it is being done without regard for the political views of the organizations in question. If there is targeting, well that is a problem.
Perhaps Harvard didn’t have to worry about their tax exempt status (though I don’t really think it’s as liberal as you seem to) but yes, liberal churches have had to worry about their tax exempt status.
As has the NAACP
So don’t act like unique martyrs here. This isn’t the first time it’s happened. It isn’t even the first time in ten years. The IRS should not target groups based on political beliefs, regardless of whether they are liberal or conservative. Anyone responsible for this should be fired.
If an organization tries to register as a 501(c)(4) “social welfare” organization, and they have the words “tea party” in their name, they should be scrutinized … and so should a liberal group with an obviously political sounding name.
… and here’s the thing, we don’t know that didn’t also happen.
I’d have a little more sympathy/outrage if the additional IRS scrutiny had actually been something that shouldn’t have happened anyway. Let’s be honest, most of the groups registering as 501(c)(4) aren’t anything close to the type of organizations that section was intended to cover. (http://www.irs.gov/pub/irs-tege/eotopici03.pdf)
Right now, this whole “scandal” sound to me more like when one of my kids gets caught doing something wrong, and immediately starts screaming about how unfair it is that their brother didn’t get in trouble too when he did the same thing last week.
@anjin-san: Maybe you and MR should consider chilling on this for a day or two. Right now, the howler monkeys of the Right are whipping this up into a full on witch burning. And maybe this time, for once, they’re actually right. But I’ve seen enough whining about enough BS to be willing to wait to bring out the boards and the nails until we actually have a little more information…
As have we all. If it’s BS, let’s find out and then we can laugh at the right for being idiots like we always do. I am not proposing that anyone be summarily fired without proof of wrongdoing or incompetent management.
That being said, using the power of government to punish people because you don’t like their politics is contrary to the American way as I see it. As Democrats, liberals, whatever, we need to make sure that our feet are firmly planted on the moral high ground, not simply assume that we are looking down on Republicans/conservatives from a lofty perch because of past performance.
Frankly, before we know if this is true and have a copy of the full list no serious judgement is possible. If all they did was to look for groups with a high likelyhood of political motivation I don’t see a scandal. That’s the law and some prioritizing has to be made if we want to limit government expenditures. In that case the bias against conservative groups would simply be due to the higher mobilization of the tea party in that timeframe.
If, on the other hand, keywords were chosen according to political viewpoints and/or out of proportion to the prevalence of such applications that would be the first real scandal in quite a while and heads should roll freely and frequently.
So political groups formed to advance their political ideals under the guise of education applied for tax exempt status and were scrutinized for it. Well to become a 501(c)3 holder one must:
“To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.”
So political groups had to answer more questions to get tax exempt status? I hope we find out they did this to leftist groups as well. For far too long, churches on both sides have gotten away with campaigning from the pulpit. And SuperPacs somehow gain 501(c)3 status while doing nothing but campaigning. I hope this “scandal” ends with stripping tax exempt status from the large majority of “charities” that hold it. This country can solve part of its revenue problem and we won’t have to put up with the one sided information that comes from these political “education” groups.
The latest news is that the IRS General Counsel knew in 2011 that “Tea Party” groups were being singled out for close scrutiny.
The IRS Commissioner testified in 2012 that “Tea Party” groups were not being singled out for close scrutiny.
Did the General Counsel know things the Commissioner did not know, or was the Commissioner lying under oath?
I always knew Obama was a 1970’s Republican but never realized until now he was Richard Nixon.
@Jenos Idanian #13:
What we know is that words like “tea party” and “patriot” and “constitution” were part of a list used to identified groups that might need further scrutiny. Before I get too upset, I’d like to be able to see the entire list. If the words above were essentially The List, that’s definitely a problem. But excuse me for being cynical, so far it strikes me that most of the howling (from the professional victims on the right) is occurring simply because these words were (appropriately from my point of view) part of such a list.
… in short, related to the quote above, I’m not sure “singled out” is an accurate description, just yet.
Based on the statements and actions of many of that most famous schools most famous graduates, it is safe to say, the school spends little of their resources educating on the Constitution and Bill of Rights.
No martyrdom. But those subjected to this admitted increased scrutiny that asked for information not normal policy to require have been pointing out the IRS’s actions for some time now. Everyone in media and elsewhere discounted it as being beyond pale that such blatant illegal and immoral actions would occur. Well, they did. They’ve been admitted to. Admitted in advance of the IG report so we can assume the effort is to blunt the real truth. Now those who had faith that such things could never happen are reevaluating their belief in decent government.
Oh, and by the way, try to take the guns now. No need to fear the government, they’d never target individuals based on political beliefs. (sarc).
I thought it was the IRS’s job to deal with tax problems! Just because some don’t like who they’re investigating sounds stupid to me. Didn’t hear any moaning from those on the right when Citizens United became law as that benefited conservatives!! It strikes me nothing is a problem if it goes in favor of Republicans. After all if the tea party and other right wing groups are all about anarchy anyway. They should be investigated!!
I find this whole outrage funny when I remember all the pop-up ads begging me to join the fight to have the IRS investigate Media Matters’ tax exempt status. I seem to remember this being a big thing on the right for a while – even Fox had guests on that were pushing for a movement to force the IRS to do this. And somehow no one seems to mind when state governments pass laws that single out abortion clinics with restrictions and regulations that no other outpatient medical clinics need to follow.
I’d love to have a government full of employees that aren’t politically motivated – I’m afraid that ship has sailed.
@beth: Oh, look, one of our brave patriots downvoted Beth for pointing out that the Right was demading the IRS investigate the tax exempt status of a left-leaning group.
And meanwhile JKB is using this to stoke his usual mastubatory fantasies of armed rebellion against the jackbooted thugs of the police and post office.
What a lovely summer this is going to be…
Just pointed out that going after the guns would be futile now that the Obama administration has handed the “can’t trust the government” crowd a, well, smoking gun.
I know what you are thinking, some low-level IRS employees did this, some mid-level State employees failed to assist their colleagues when they were under attack, Obama ran around drawing red lines everywhere against White House policy.
Well, that provokes the question of just what kind of Administration are they running over there? And who is in charge? Not Obama? Not Hillary at State or the IRS Administrator? Not the political appointees? Or the upper level career employees? Everybody just running around doing what ever they want. Violating laws and debasing the faith in government.
Has government become ungovernable?
If so, shouldn’t we seek to limit its size and scope to some governable level? Especially, if Democrats are going to be trying to govern?
What we need is a guy like George W. Bush. That guy was responsible for everything. Heck, some say he’s responsible for what’s going on now.
@JKB: Gosh, JKB, were you this upset when the IRS under Bush went after Pasadena’s All Saints Church because the minister dared to give a speech opposing the Iraq War? Were you this upset when the church was cleared of any wrongdoing, the the IRS continued to claim they’d committed crimes?
No, of course you weren’t. You don’t give a damn about corruption. You don’t give a damn about the size of government. You want a win for your team. And to fantasize about murdering government officials.
Someone should check and see what tax protester cases were going on around the time this all started.
If a bunch of tax protester groups with the name “Patriot” or “Tea-Party” were stuck in the whole mess, then yeah, I can see how a policy of a higher level of scrutiny of groups with those words in their names could have gotten started.
And probably there is at least one group that claims to be a “Tea Party” group as well as a tax-protesting group out there. (You know, usually headed up by some grifter who charges $$ to explain to dumb marks why they don’t have to pay income taxes.)
Dude, don’t be projecting your fantasies on me. It makes me feel sticky.
Why would anyone wish to harm government officials. I say keep watch, point out their malfeasance and let the disrepute of the “profession” do the work. But also, work to reduce the extent of government wherever possible so just by beneficial consequence we end up with fewer government officials and employees.
@Jenos Idanian #13:
Apples and oranges there sir — As far as we currently know, the only organizations applying for 501 status were questioned. Tea Party groups — and progressive groups like the ones you listed — who received their status prior to 2011 were not investigated.
This isn’t to say that the targeting of 75 tea party groups for heightened scrutiny wasn’t a case of profiling. And this entire thing needs to be seriously investigated.
Just let’s try and keep some perspective.
BTW, has the IRS released a list of all the 300 groups that were investigated? And how many of those groups were denied their status?
BTW, hope some folks remember the following passage then next time they attack the ACLU as godless conservative haters:
BTW, I’d suggest the WSJ’s most recent article on this story as it provides some very useful background — including a summary of the rational for why the IRS claim that this was *not* politically motivated:
Again, there’s no question that investgations need to happen on this, and if this all proves to be true, a number of managers at the Cincinnati Office need to go.
@beth: I find this whole outrage funny when I remember all the pop-up ads begging me to join the fight to have the IRS investigate Media Matters’ tax exempt status. I seem to remember this being a big thing on the right for a while – even Fox had guests on that were pushing for a movement to force the IRS to do this.
Let me draw the picture for you:
1) Media Matters declared that Fox News was an arm of the Republican Party.
2) Media Matters was actively calling for and acting to destroy Fox News.
3) Media Matters was trying to destroy an arm of the Republican Party.
That is about as partisan as it gets, Beth…
@Jenos Idanian #13: Congratulations. That is the single dumbest thing you’ve ever said at OTB. You should be very proud of yourself.
@wr: Why am I not surprised that you can’t grasp a simple logical chain. If A=B and B=C, then A=C.