Just because you are a conservative and paranoid, doesn’t mean the IRS is not after you. And, assuming the AP was not hacked again, this is precisely what happened. In a stunning disclosure, the supposedly impartial Internal Revenue Service has admitted and apologized for flagging and subjecting to extra reviews, conservative political groups – those that included the words “tea party” or “patriot” – during the 2012 election to see if they were violating their tax-exempt status. No such privilege was apparently afforded to groups identifying themselves as “liberal.”
The Internal Revenue Service is apologizing for inappropriately flagging conservative political groups for additional reviews during the 2012 election to see if they were violating their tax-exempt status.
Lois Lerner, who heads the IRS unit that oversees tax-exempt groups, said organizations that included the words “tea party” or “patriot” in their applications for tax-exempt status were singled out for additional reviews.
Lerner said the practice, initiated by low-level workers in Cincinnati, was wrong and she apologized while speaking at a conference in Washington.
Many conservative groups complained during the election that they were being harassed by the IRS. They said the agency asked them an inordinate number of questions to justify their tax-exempt status.
Certain tax-exempt charitable groups can conduct political activities but it cannot be their primary activity.
It does make one wonder, just how far the IRS goes to make the lives of conservatives a living hell: will all 2012 tax audits be those who on their facebook profile admit to liking Ron Paul? And just how far does the IRS invade personal privacy to determine how any one tax filer is indeed, a “conservative?” But don’t worry – aside from the obvious persecutions, America is a free country for one and all.
One wonders: how long until “conservatives” engage in “tax-avoiding” blowback and really give the IRS reason to persecute them. Alternatively, one wonders the IRS is simply limited by logistical considerations, due to the notional difference in number of actual tax filings submitted by “conservatives” vs “liberals” and the prepondrance of one group over the other…
March 23, 2012
Landmark Legal Foundation sent a letter on Friday to the Treasury Department’s Inspector General for Tax Administration requesting an investigation to determine whether officials with the Internal Revenue Service have engaged in misconduct in dealing with applications from Tea Party groups seeking tax-exempt status under section 501 (c) (3) of the Internal Revenue Code.
“Landmark Legal Foundation requests an immediate investigation into possible misconduct by the Internal Revenue Service’s Exempt Organization (EO) Divisoin that calls into question the integrity of federal tax administration and IRS programs,” said the letter signed by Landmark President Mark Levin.
“Recent media reports indicate that the EO Division is using inappropriate and intimidating investigation tactics in the administration of applications for exempt status submitted by organizations associated with the Tea Party movement,” Levin wrote.
As CNSNews.com reported earlier this month, the American Center for Law and Justice, which says it represents nearly 20 Tea Party organizations nationwide, put out a statement on March 7 complaining about what it perceived to be improper treatment of Tea Party groups by the IRS.
“This appears to be a coordinated attempt to intimidate Tea Party organizations by demanding information that is outside the scope of legitimate inquiry and violates the First Amendment,” ACLJ Chief Counsel Jay Sekulow said in a statement.
“These organizations have followed the law and applied for tax exempt status for their activities as Americans have done for decades,” Sekulow said. “The problem here is the IRS has gone beyond legitimate inquiries and is demanding that these organizations answer questions that actually violate the First Amendment rights of our clients.”
“This intimidation campaign is as onerous as what the IRS did to the NAACP in the 1950’s and is simply unacceptable,” said Sekulow. “We will aggressively defend our clients and are prepared to take the IRS to court if necessary.”
In his letter to the inspector general, Landmark’s Levin said that the types of inquiries the IRS was making of Tea Party groups were inappropriate.
“The information demanded in many cases goes far beyond the appropriate level of inquiry regarding the religious, charitable and/or educational activities of a tax exempt entity,” said Levin.
“The inquiries are not relevant to these permitted activities,” Levin wrote. “Inquiries extend to organizational policy positions and priorities, personal and poltiical affiliations, and associations of staff, board members and even family members of staff and board members.”
“Finally,” said Levin, “reports that Tea Party-related organizations are being singled out for the IRS’s intrusive inquries raises serious questions about the propriety of the personnel involved in the evaluation of tax exemption applications.”
Landmark Legal Foundation also asked the inspector general to “determine whether the relevant IRS employees are acting at the direction of politically motivated superiors.”
The Treasury Inspector General for Tax Administration provides “independent oversight of IRS activities.”
Barack Obama owes his presidency in no small part to the power of rhetoric. It’s too bad he doesn’t appreciate the damage that loose talk can do to America’s tax system, even as exploding federal deficits make revenues more important than ever.
At his Arizona State University commencement speech last Wednesday, Mr. Obama noted that ASU had refused to grant him an honorary degree, citing his lack of experience, and the controversy this had caused. He then demonstrated ASU’s point by remarking, “I really thought this was much ado about nothing, but I do think we all learned an important lesson. I learned never again to pick another team over the Sun Devils in my NCAA brackets… President [Michael] Crowe and the Board of Regents will soon learn all about being audited by the IRS.”
Just a joke about the power of the presidency. Made by Jay Leno it might have been funny. But as told by Mr. Obama, the actual president of the United States, it’s hard to see the humor. Surely he’s aware that other presidents, most notably Richard Nixon, have abused the power of the Internal Revenue Service to harass their political opponents. But that abuse generated a powerful backlash and with good reason. Should the IRS come to be seen as just a bunch of enforcers for whoever is in political power, the result would be an enormous loss of legitimacy for the tax system.
Our income-tax system is based on voluntary compliance and honest reporting by citizens. It couldn’t possibly function if most people decided to cheat. Sure, the system is backed up by the dreaded IRS audit. But the threat is, while not exactly hollow, limited: The IRS can’t audit more than a tiny fraction of taxpayers. If Americans started acting like Italians, who famously see tax evasion as a national pastime, the system would collapse.
One reason why Americans don’t act like Italians is that they see the income-tax system as basically fair in execution. A tax audit or a tax-fraud prosecution is still seen, usually, as evidence that someone has done something wrong. If it comes instead to be seen as “just politics” then the moral component of the system will be gone. For the system to work, people have to believe that it is fundamentally fair.
This is why the IRS is so strict with its own employees. Paul Caron, a professor at the University of Cincinnati who writes the TaxProf blog, noted in response to Mr. Obama’s remarks that the law calls for the termination of IRS employees who make audit threats for illegitimate reasons. He suggested that Mr. Obama’s “joke” might be grounds for firing if he were an IRS employee.
He’s not, of course, but as the president his words carry much more weight and he should be much more careful. That’s particularly true given that people still haven’t forgotten about the Obama administration’s other tax issues – the appointment of Tim Geithner as Treasury secretary despite an inexcusable failure to pay $34,000 in Social Security and Medicare taxes while working for the International Monetary Fund, and the scandals involving Tom Daschle and others whose appointments failed. (When the Geithner issue came up, news reports indicated that IRS employees were very upset. They can be fired over a simple late filing or a failure to report a mere $500 in income, making Mr. Geithner’s “pass” on much more serious questions quite demoralizing.)
The notion that people who are audited are probably just “enemies of the regime,” coupled with the idea that big shots get a pass – that, as Leona Helmsley is reputed to have said, “taxes are for the little people” – is a recipe for widespread tax evasion. That’s how things work in Italy, and in many other countries around the world. But do we want things to work that way here?
Mr. Obama has been accused of not appreciating the importance of financial capital to the proper functioning of the economy. But ill-chosen remarks like his ASU audit threat suggest that he also doesn’t appreciate the role of moral capital. That, too, is essential to the proper functioning of a modern economy. As he looks for ways to pay for the spending campaign he’s already embarked upon, he’d be well-advised to avoid comments that undercut the very tax system he’ll be depending on.