The IRS Scandal: A Case Study in Government Tyranny | Eastern NC Now

    Tea Party groups targeted by the IRS for scrutiny and delay were forced to provide such information as:

    Names, addresses, and emails of all their members

    Names, addresses, and emails of everyone who has ever attended any of their meetings

    The names of the donors, contributors, and grantors. If the donor, contributor, or grantor has run or will run for a public office, identify the office. If not, please confirm by answering this question "No".

    The amounts of each of the donations, contributions, and grants and the dates you received them.

    How did the group use these donations, contributions, and grants. Provide Details.

    A copy of every presentation given by every speaker at their meetings

    A copy of the flyer or announcement for each meeting

    Copies of all materials passed out at all meetings

    Biographies of every speaker at their meetings

    "Provide the following information for the income you received and raised for the years from inception to the present. Also, provide the same information for the income you expect to receive and raise for 2012, 2013, and 2014."

    Copies of any contracts the group is a party to

    Copies of all training materials the group has used or will use with the Koch Foundation

    Copies of stories and articles that have been published about the organization and/or any of its members.

    Organizations were told that if the information was not provided, they would not be certified as "tax-exempt." And even if all the information was provided, the IRS would scrutinize it and further delay the application by following up with probing questions. For example, The Coalition for Life of Iowa, a pro-life group, was asked to "Please explain how all of your activities, including the prayer meetings held outside of Planned Parenthood are considered educational as defined under 501(c)(3). Please explain in detail the activities at these prayer meetings. Also, please provide the percentage of time your group spends on prayer groups as compared with other activities of the organization."

    (3) In June 2011, Lois Lerner, Director of the director of the Exempt Organizations Unit of the Internal Revenue Service (IRS), reportedly became aware of what was going on and directed staffers to change to how they vetted nonprofit applications.

    (4) By the spring of 2012, so many conservative groups had complained about the IRS harassing them that Republicans in Congress took notice. Rep. Charles Boustany (R-La.) sent the IRS a letter asking why it was targeting Tea partiers, and Rep. Darrell Issa (R-Calif.) held a hearing in which he grilled then-IRS Commissioner Douglas Shulman, a George W. Bush appointee, over the agency's treatment of conservative groups. Shulman denied that his agency was targeting conservatives, and the controversy remained quiet until Lerner's apology (in May; see below).

    (5) In early May 2013, the Treasury Inspector General for Tax Administration, Michael McKenney, released a preliminary audit report confirming that the IRS used inappropriate criteria to identify potential political cases, including organizations with Tea Party in their names. The final report would be released on May 14.

    (6) On May 10, in advance of the public release of the audit findings, Director of the IRS Exempt Organizations division of the IRS, Lois Lerner, "apologized" for what she termed were "absolutely inappropriate" actions by the IRS. She would then blame the actions on lower-ranked employees out of a Cincinnati office.

    (7) On May 12, Republican and Democratic lawmakers called for a full investigation of the IRS. At a press conference the next day, President Obama called the charges "outrageous" if true, and said those responsible should be held accountable. On May 14, Attorney General Eric Holder ordered the Justice Department to begin an investigation as to whether the conduct amounted to criminal behavior.

    (8) The Treasury Inspector General for Tax Administration found gross violations. His investigation found that of the 296 total conservative non-profit applications reviewed in the audit conduct in December 2012, no work at all was conducted on them for at least 13 months. Of those 296 applications, 108 had been approved, 28 were withdrawn by the applicant because of frustration and seeming harassment, none had been denied, and 160 were left open - without moving them forward - for more than three years and spanning two election cycles, During that time, the organizations were hit with burdensome questions and numerous requests for more information.

    Clearly, the IRS was abusing its power. Clearly, the Obama administration was abusing its government power to silence political opposition.

    (9) In early May, following the Inspector General's report, the House Committee on Oversight and Government Reform, chaired by Rep. Darrell Issa (R-OH), began an investigation into the IRS. Additionally, the House Committee on Ways and Means expanded its ongoing 2011 investigation into possible IRS political targeting.

    On May 22, 2013, in her opening statement to the Oversight Committee, Lois Lerner stated: "I have not broken any laws. I have not violated any IRS rules or regulations. And I have not provided false information to this or any other congressional committee." Lerner then invoked her Fifth Amendment right against self-incrimination and refused to testify.

    House Republicans dismissed Lerner's invocation of the Fifth Amendment as ineffective, with chairman Issa (R- OH) stating: "You don't get to use a public hearing to tell the public and press your side of the story and then invoke the Fifth." Democrats characterized the contempt proceeding as a "witch hunt" geared toward the 2014 midterm elections.

    (10) In June 2013, the IRS revealed that it had selected political groups applying for tax-exempt status for intensive scrutiny based on their names or political themes. In other words, they were intentionally targeting conservative groups - particularly ones with the name "Tea Party" or "Patriot" or "912" in their name. It admitted that it improperly frustrated and held up their applications. Judicial Watch has recently confirmed (thanks to documents obtained under the Freedom of Information Act) that the targeting began in 2010.

    (11) In August 2013, Democratic congressman Chris Van Hollen (Md) filed suit against the IRS seeking to overturn a rule that had been on the books since 1959 which allowed social welfare groups to engage in political activity. For 54 years, the IRS has respected that rule and has allowed 501(c)(4) groups to engage in political activity, as long as it wasn't their primary mission. That rule has been widely interpreted as allowing such tax-exempt groups to spend 49% of their money on politics - without disclosing where that money came from.

    It was this 1959 IRS rule that was at the center of Tea Party scandal.

    However, more insidiously, the law suit had a lot to do with the greater flexibility granted to groups to engage in political expression with the 2010 Citizens United Supreme Court decision.. This case overturned many previous restrictions on political campaign spending and allowed nearly unlimited and often anonymous spending by corporations and other groups to influence elections. Some Tea Party leaders began forming political action committees as offshoots of their 501(c)-tax-exempt organizations - 501(c)(4) groups - to spend money to influence elections or at least to become politically involved.

    So, in 2012, Obama won re-election, although very narrowly. Tea Party groups were actively speaking out against Obamacare and his bail-out policies, and everything else. And now they have been empowered to continue being active, by the Citizens united decision. Tea Party groups started raising money and pouring money into what is called "anonymous politics" - not being part of the Republican or Democratic parties. Ordinary citizens, exercising their right of political expression in groups (where there is more power than being exercised at the individual level).

    In September 2010, it was reported by The New York Times that almost all of the biggest players among third-party groups, in terms of buying television time in House and Senate races since August of that year, have been 501(c) organizations, and their purchases have heavily favored Republicans.... Remember, the Tea Party movement essentially started in 2009 - 2010. [CNBC's Rick Santelli was on the floor of Chicago's mercantile exchange in Feb. 2009, ranting about the government's bail-out policy and announced: He urged all capitalists to join him to start a new Tea Party movement].

    Between 2010 and 2012, the number of applications the IRS received each year seeking 501(c)(4) certification doubled, many being Tea Party groups and other conservative groups. Democrats became worried. By early 2012, House and Senate Democrats started pressuring the IRS to scrutinize 501(c) non-profit applications and make sure they aren't seeking the status to engage in political activity.

    Van Hollen, who was chairman of the Democratic Congressional Campaign Committee, by filing the lawsuit sought to force the IRS to draft new rules requiring that the tax-exempt 501(c)(4) groups strictly comply with the section of the IRS code that requires such groups to be "operated exclusively for the promotion of social welfare." Van Hollen and the Democratic Congressional Campaign Committee sought to limit conservative 501(c) non-profit groups from pouring money into political campaigns.

    Apparently, Van Hollen didn't like how Democrats were responding to the emerging scandal which had just broken 2 months earlier and was hoping to emphasize the point that under the Obama administration, the IRS was merely trying to resolve the legal issues surrounding political activities by tax-exempt groups and return to the intention of the IRS code for tax exemption - to further social work.

    Jay Sekulow and his American Center for Law & Justice, represented 41 Tea Party groups and sued the IRS over what he called "Political Targeting." He said that Van Hollen's agenda raises "serious First Amendment issues."

    Sekulow said: "Political speech is protected by the First Amendment. Anonymous pamphleteering is as old as our country, and deserves just as much constitutional protection." He also said: "If Van Hollen wants to change the code, he should do that through the legislative process" and not try to by-pass the rightful branch, the legislative branch, by going to the improper branch, the judicial branch (or the federal courts).

    (12) On January 15, 2014, the FBI announced that it had found no evidence warranting the filing of federal criminal charges in connection with the affair. The FBI stated it found no evidence of "enemy hunting" of the kind that had been suspected, but that the investigation did reveal the IRS to be a mismanaged bureaucracy enforcing rules that IRS personnel did not fully understand. The officials indicated, however, that the investigation would continue.

    Disturbingly, in February, while the investigation by the Department of Justice (DOJ) was ongoing, President Obama stated there was "not a smidgeon of corruption" at the IRS.

    (13) On April 9, the House Committee on Ways and Means voted to send a letter to the Department of Justice referring former IRS Exempt Organizations Division Director Lois G. Lerner for criminal prosecution. The Committee's nearly three-year investigation uncovered evidence of willful misconduct on the part of Ms. Lerner. In particular, the Committee found that Ms. Lerner used her position to improperly influence IRS action against conservative organizations, denying these groups due process and equal protection rights under the law. The Committee also found she impeded official investigations by providing misleading statements in response to questions from the Treasury Inspector General for Tax Administration. Finally, Lerner risked exposing, and it was actually alleged (even in a lawsuit) that she did expose, confidential taxpayer information, in apparent violation of IRS section 6103 by using her personal email to conduct official business.

    (14) Two months later, on June 13, the IRS notified Republican congressional investigators that it had lost Lerner's emails from January 2009 to April 2011 because of a mid-2011 computer crash. The emails were under subpoena as part of the congressional investigation. June 19, the IRS said that the damaged hard drive containing Lerner's missing emails had been disposed of more than two years prior.

    On July 9, 2014, Republicans released an April 13, 2013 email from Lerner in which she cautioned colleagues to "be cautious about what we say in emails."

    (15) On September 5, the IRS said it lost additional emails of five workers under congressional investigation, blaming computer crashes. These five workers include two people based in Cincinnati who worked on Tea Party cases. According to the IRS, the crashes all predate congressional investigations and had occurred between September 2009 and February 2014.

    (16) On September 5, 2014, the Senate Permanent Subcommittee on Investigations released its report on the scandal, finding that inappropriate screening criteria were definitely used but concluded that there was no intentional wrongdoing or political bias in the use of the criteria. A few months later, in December, Chairman Issa released a new report that found that "the IRS's inability to keep politics out of objective decisions about interpretation of the tax code damaged its primary function: an apolitical tax collector that Americans can trust to treat them fairly."

    (17) In January 2015, the US Senate requested that the White House produce all communications it has had with the IRS since 2010.

    (18) On August 5, 2015, the Senate Finance Committee released a report that concluded that management at the IRS had been "delinquent in its responsibility to provide effective control, guidance, and direction over the processing of applications for tax-exempt status filed by Tea Party and other political advocacy organizations" and that it was only guilty of poor planning and oversight.

    (19) In October 2015, the Justice Department notified Congress that there would be no charges against the former IRS official Lois Lerner or against anyone else in the IRS. The investigation found no evidence of illegal activity or the partisan targeting of political groups and found that no IRS official attempted to obstruct justice. The DOJ investigation did find evidence of mismanagement and Lerner's poor judgement in using her IRS account for personal messages but said "poor management is not a crime."

    (20) Four days after the Justice Department closed its investigation, 19 members of the House Oversight and Government Reform Committee led by the Committee's Chairman, Jason Chaffetz (R-UT), filed a resolution to impeach IRS Commissioner John Koskinen. Those sponsoring the impeachment resolution to remove Koskinen from office accused him of failing to prevent the destruction of evidence in allowing the erasure of back-up tapes containing thousands of e-mails written by Lois Lerner, and of making false statements under oath to Congress. In a statement released by the Committee, Chaffetz said Koskinen "failed to comply with a congressionally issued subpoena, documents were destroyed on his watch, and the public was consistently misled. Impeachment is the appropriate tool to restore public confidence in the IRS and to protect the institutional interests of Congress."

    (21) Last month, as part of an ongoing investigation into the IRS scandal and an ongoing inquiry by Judicial Watch, the government released names of 426 organizations which had been improperly targeted by the IRS because of their politics. Another 40 were not released as part of the list because they had already opted out of being part of the class-action suit. That total is much higher than the 298 groups the IRS' Inspector General identified back in May 2013, when investigators first revealed the agency had been subjecting applications to long and potentially illegal delays, and forcing them to answer intrusive questions about their activities.

    (22) Courts have already ruled against the IRS. For example, in 2016, the Sixth Circuit Court of Appeals did so and noted in its ruling: "501(c)(4) groups may not collect tax-deductible donations, but they may engage in relatively unfettered political advocacy, including election advocacy. 501(c)(4) groups range from national organizations-including the American Civil Liberties Union, the National Rifle Association, and the Sierra Club-to local neighborhood associations."

    (23) There has been a lawsuit filed by Judicial Watch and its investigation into the scandal continues. It has just received almost 700 pages of documents (61% redacted) under the Freedom of Information Act which proves the scheme by the Obama administration to target Tea Party groups into silence and inactivity in political elections. Its current lawsuit is seeking at least 7000 pages of documents related to the IRS scandal that have been hidden from Congress and the American people. The IRS, under the Obama administration, intentionally sought to restrict Tea Party activity and especially in political elections.