This has been a difficult few weeks for
the IRS.
In March Rep. Charles Boustany (R-La.), chairman of the
House Ways and Means oversight subcommittee chastised the agency upon
discovering a series of IRS training videos that parodied “Star Trek” and
“Gilligan’s Island.” The videos cost the IRS approximately $60,000. The IRS
initially refused to make the videos public. They later did after mounting
criticism.
In April the American Civil Liberties
Union released documents obtained under the Freedom of Information Act showing
that the IRS criminal tax division believed the agency could access e-mails and
text messages without obtaining a warrant. Rep. Charles Boustany demanded the IRS
present its policies for when search warrants are needed to review private
e-mails and communications.
Last week the IRS announced that it was
changing its policy to require search warrants both for criminal and civil tax
proceedings.
Last week we found out that an IRS
employee at the Covington campus had been charged with destroying at least 800
fiduciary income tax returns. “Fiduciary” is a fancy term for a trust, and the term
includes an estate which receives income and has to pay income tax. The employee
– Brady James – is only 30 years old, and he could be facing a maximum prison
term of 20 years.
One has to wonder what Brady James was thinking.
Last Friday an IRS employee – Lois Lerner,
head of the IRS tax-exempt division – responded to a question concerning tax-exempt
applications by conservative groups at an American Bar Association conference. A
firestorm ignited, and the IRS quickly scheduled a media conference call for
the same day.
She apologized for “inappropriate”
targeting of conservative political groups during the 2012 election. IRS employees
in Cincinnati singled out approximately 75 organizations using “patriot” or
“tea party” in their name. The IRS was trying to get ahead of an AP news
report, as well as an expected report by the Treasury Inspector General for Tax
Administration.
Why Cincinnati? The IRS breaks up its
work functions into units, and these units are located throughout the country.
The unit under discussion handles the review of applications for tax-exempt
status, and that unit is located in Cincinnati.
The number of organizations filing for tax-exempt status has more
than doubled since 2010. To handle the volume, the IRS centralized its review
of the applications in Cincinnati. Makes sense, as it allows the development of
expertise within the unit and consistency in the process.
Until it goes wrong. Terribly wrong.
The IRS for example responded to the Richmond (VA) Tea Party’s application
by requiring additional documentation on 17 different matters. When it did so,
the IRS responded by requiring documentation on 53 additional matters. Oh, and
the Richmond Tea Party had two weeks to respond.
“We made some mistakes,” said Lois Lerner.
“Some people didn’t use good judgment. For that we are apologetic.”
Heartfelt apology, isn’t it?
Lerner went on to explain that low-level
employees initiated the IRS practice. It was not motivated by bias, she said.
COMMENT: Who would even think of bias? Do not pay attention
to the fact that groups with words like “progressive” in their name did not
receive the same scrutiny.
"It's the line people that did it without talking to
managers," Lerner continued. "They're IRS workers, they're revenue
agents."
COMMENT: Are there no supervisors in Cincinnati? She makes it sound like her revenue agents are doing whatever they want, without review and apparently without accountability. I am throwing the B.S. flag on Ms. Lerner.
Lerner told the AP that no high-level IRS officials knew about the practice.
COMMENT: This
means some non high-level will take the fall, of course. Hey, there are perks
to being a high-level.
Friday was not Lerner’s best moment. At
one point she said, "I'm not good at math." Granted, she is an
attorney and not an accountant, but still. That is not a comforting comment from an IRS high-level.
Good grief.
