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Sunday, May 12, 2013

IRS Political Targeting -- The Story Gets More Serious

The IRS political targeting affair is getting more serious.  AP reports:
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.  [See below.]
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.
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.

On March 22, 2012, IRS Commissioner Douglas Shulman testified before the Subcommittee on Oversight of the House Committee on Ways and Means:

*Chairman Boustany.  One other question.  It has come to my attention and I have gotten a number of letters just recently.  We have seen some recent press allegations that the IRS is targeting certain Tea Party groups across the country requesting what have been described as onerous document requests, delaying approval for tax exempt status, and that kind of thing.    Can you elaborate on what is going on with that?  Can you give us assurances that the IRS is not targeting particular groups based on political leanings?
     *Mr. Shulman.  Thanks for bringing this up.  I think there has been a lot of press about this and a lot of moving information.  I appreciate the opportunity to clarify.
     First, let me start by saying yes, I can give you assurances.  As you know, we pride ourselves on being a non‑political, non‑partisan organization.
     I am the only ‑‑ me and our chief counsel are the only presidential appointees, and I have a five year term that runs through presidential elections, just so we will have none of that kind of political intervention in things we do.
     For 501(c)(4) organizations, which is what has been in the press, organizations do not need to apply for tax exemption.  Organizations can actually hold themselves out as 501(c)(4) organizations and then file a 990 with us.
     The organizations that have been in the press are all ones that are in the application process.  First of all, I think it is very important to emphasize that all of these organizations came in voluntarily.
     They did not need to engage the IRS in a back and forth.  They could have held themselves out, filed a 990, and if we would have seen an issue, we would have engaged, but otherwise, we would not.
     The basic rules around 501(c)(4) organizations are they need to be primarily engaged in promoting the common good and general welfare of their community.  They can be involved in political and campaign activity, but it cannot be their primary purpose.
     When people apply for 501(c)(4) status, what we do is engage them in a number of questions about making sure we understand their primary purpose around this and other sorts of engagement.
     What has been happening has been the normal back and forth that happens with the IRS.  None of the alleged taxpayers, and obviously, I cannot talk about individual taxpayers, and I am not involved in these, are in an examination process.  They are in an application process, which they moved into voluntarily.
     There is absolutely no targeting.  This is the kind of back and forth that happens when people apply for 501(c)(4) status.