Investigations and Recriminations for the IRS

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The IRS scandal involving the targeting of certain groups for intense scrutiny when applying for tax exemptions continues to gain momentum. Attorney General Eric Holder announced Tuesday morning that the FBI will launch an investigation to determine whether federal laws were violated by IRS employees involved in, or responsible for, review of Form 1024 applications for tax-exempt recognition. The FBI’s criminal investigation is separate from the Treasury Department’s investigation, released on Tuesday afternoon, which focuses on the facts, events, and timeline of activities by IRS personnel. The report by the Treasury Inspector General for Tax Administration (TIGTA) will likely be used by various Congressional inquiries, beginning with Friday’s House Ways and Means Committee hearings that NPQ reported on yesterday.

Acting IRS Commissioner Steven T. Miller wrote an opinion piece for USA Today, published Tuesday, in which he admits the IRS “should have done a better job handling the influx of applications” for tax exemption. His statement that “[m]istakes were made, but they were in no way due to any political or partisan motivation” rings hollow on two fronts: First, the lack of ownership of any “mistakes,” and second, the assertion that politics had nothing to do with singling out applications from groups believed to be politically conservative is bizarre.

Since the IRS admitted both Friday morning and Friday afternoon that they had singled out conservative groups for scrutiny, it’s more than odd that White House press secretary Jay Carney said Tuesday that “[o]ne person’s view of what actions were taken or what that individual did is not enough for us to say something concretely happened that was inappropriate.” When that “one person” is Lois Lerner, the person who heads the IRS division responsible for processing the exemption applications, and her statements are backed up by draft copies of the Treasury inspector general’s report, Carney sounds like he’s trying to not just slow down the story, but walk it backwards against all credulity.

The credibility of the administration was questioned pointedly by Senate Minority Leader Mitch McConnell (R-KY). In a statement delivered on the Senate floor Tuesday afternoon, McConnell said, “We’ve only started to scratch the surface of this scandal.” Citing news reports that IRS employees in locations other than Cincinnati were involved in the activities, and that other information is coming to light despite administration efforts to distance itself from the story, McConnell said, “We can’t count on the administration to be forthcoming about the details of this scandal—because so far they’ve been anything but.”

Other groups and individuals have reported that they have been targeted by the IRS for audits and other scrutiny as a result of political activity. NPQ reported on Monday that a pro-Israel group believes its application for tax-exempt status was a target of suspicion by the IRS. This group, Z Street, is pursuing litigation against the IRS in federal court. Frank VanderSloot, co-chair of Mitt Romney’s national finance committee, was singled out for attention on the Obama campaign website. Two months later, VanderSloot was selected for audit by both the IRS and by the U.S. Labor Department. KMOV-TV anchor Larry Conners claims that he was singled out for IRS attention not long after he conducted a wide-ranging interview with President Obama that challenged his views and statements on several subjects. His Facebook post became the topic of an article on the Politico web site. Politico attempted to interview Conners, but he said his employer prohibited him from giving interviews on the topic of his comments about his interactions with the IRS.

In the New York Times, campaign-finance watchdogs are concerned that the IRS’s addressing of political activities by tax-exempt groups is seriously flawed. “We would far rather see scrutiny of these big fish—the groups that spent hundreds of millions of dollars to influence elections—than to see the resources spent on hundreds of small groups that appeared to spend very little on elections,” said Paul S. Ryan, senior counsel at the Campaign Legal Center.—Michael Wyland