Introducing the IRS's New Slogan

"Better Late than Never!"

One of the groups at the center of the IRS scandal has finally received its tax-exempt status after a three-year delay prompted by a politically driven move to block Tea Party and other conservative groups, many that slammed the president during his re-election, from winning the special status.

TheTeaParty.net, one of the nation's largest Tea Party groups, told Secrets that the long-sought declaration arrived Monday, well over three years after they applied for 501c(4) tax-exempt status in March of 2010, the start of the Tea Party movement. The notice came in a letter from the IRS.

The group said it endured harassment by agents targeting mostly conservative non-profit groups for their political donors, agenda and even reading lists, all against the rules. Those agents were headed by the recently retired Lois Lerner.

"After four years battling Lois Lerner's shock troops, we are relieved that the IRS has relented and finally recognized our right to operate as a non-profit,” said Todd Cefaratti, founder of TheTeaParty.net. “First they tried to ignore us. Then they tried to discredit us. And then they tried to deny our legal rights. Hopefully this is the beginning of the end to a sad chapter in our government’s targeting of its own citizens," he added.

I am sure that the IRS expects praise and congratulations for the mercy and kindness it believes it has shown in this case.

The Falsehoods Surrounding the IRS Scandal

Tired of being told that the IRS scandal is a "fake" one? So is Bradley Smith, who takes apart false claims surrounding the issue:

The Internal Revenue Service's scandalous targeting of tea party and conservative groups refuses to die, as one by one the administration's explanations prove untrue.

We were told that the White House, like the rest of the country, learned about the program on May 10 through a planted question asked of then IRS official Lois Lerner at an American Bar Association conference. Turns out the White House knew earlier. We were told the targeting was the work of a few rogue IRS employees in Cincinnati. Then those employees insisted that they were being managed from Washington.

We were told that no political appointees were involved, but now we know the scandal goes at least to the office of Obama appointee and IRS Chief Counsel William Wilkins. We were told that liberal groups were targeted, too. But then the IRS's inspector general, whose report exposed the harassment, clarified that only conservative groups were targeted.

Now the administration line is that the scandal is nonetheless "phony." That assertion is part of a Democratic counteroffensive contending that the tea party and conservative groups applying for "charitable" tax status never should have sought such IRS approval.

Rep. Xavier Becerra (D., Calif.), chairman of the House Democratic Caucus, argued on "Meet the Press" on May 19 that conservative groups were, "under the guise of a charity, [using] undisclosed millions of dollars to do political campaigns." At a May hearing, Sen. Bill Nelson (D., Fla.) claimed that the groups were supposed to spend their money on "charitable activities," and demanded of the IRS, "How could you all in the IRS allow the tax breaks funded basically by the taxpayer [to be spent] on these political campaign expenditures?"

Liberal columnist Jeffrey Toobin has also taken up the theme that the groups were seeking improper tax advantages. Writing in the May 14 issue of the New Yorker, Mr. Toobin argued that if approved by the IRS, the tea party groups would not pay taxes on contributions received. "In return for the tax advantage," he wrote, these groups "must refrain from traditional partisan political activity, like endorsing candidates."

This attack is wrong on the law, and cynical as politics. As these IRS apologists well know, liberal groups, such as Moveon.org, have long had the same tax status as that requested by the tea party and conservative groups—and that status is not of a "charity."

Your Government at Work (IRS Edition)

So, despite an order to save money because of the sequester, and despite an IRS scandal that should by itself make any talk of bonuses for IRS employees verboten,  the IRS is going to pay out $70 million extra to its workers for a job not-so-well-done.

Gee, imagine how much IRS workers would get if they were actually good at their jobs. 

IRS Follies: More on the Supposed Non-Scandal That Actually Is a Scandal

Another blow to the theory that "rogue agents" in a local IRS office were responsible for targeting conservative groups for extra scrutiny: 

An Internal Revenue Service supervisor in Washington says she was personally involved in scrutinizing some of the earliest applications from tea party groups seeking tax-exempt status, including some requests that languished for more than a year without action.

Holly Paz, who until recently was a top deputy in the division that handles applications for tax-exempt status, told congressional investigators she reviewed 20 to 30 applications. Her assertion contradicts initial claims by the agency that a small group of agents working in an office in Cincinnati were solely responsible for mishandling the applications.

Ron Fournier points out that second-term Obama administration scandals are biting into the president's approval ratings:

There is a common element to the so-called Obama scandals—the IRS targeting of conservatives, the fatal attack in Benghazi, and widespread spying on U.S. journalists and ordinary Americans. It is a lack of credibility.

In each case, the Obama administration has helped make controversies worse by changing its stories, distorting facts, and lying.

The abuse of trust may be taking a toll on President Obama's reputation.

A CNN/ORC poll of 1,104 adult Americans June 11-13 shows the president's job approval rating at 45 percent, down 8 percentage points in a month.

Among young voters, only 48 percent approve of the president's performance, a 17-point decline since the last CNN/ORC poll. These are the president's most loyal supporters, and the future of American politics.

The drop in presidential approval is across the board, affecting Obama's standing on every issue measured: The economy (down 2 points); foreign affairs (down 5 points); federal budget (down 4 points); terrorism (down 13 points); and immigration (down 4 points).

Asked for the first time by CNN/ORC about the president's handling of "government surveillance of U.S. citizens," 61 percent of Americans said they disapprove.

Pants on Fire (Jim McDermott Edition)

Politifact is not exactly known for being a propaganda organ for the Vast Right Wing Conspiracy, but even it is forced to call shenanigans on Congressman Jim McDermott:

At a House Ways and Means committee hearing Tuesday, Rep. Jim McDermott, D-Wash., listened closely to the stories from members of groups that were snagged when the IRS cast a wide net for politically active organizations seeking tax-exempt status. All of the groups advocate for conservative causes, from opposing gay marriage to promoting a broad tea party agenda.

While McDermott said he was sorry they had been singled out, and that "the IRS has unequivocally made a mistake here," he was more focused on the lack of clear legal rules that should guide the IRS.

"Let’s not get lost," McDermott said. "During the Bush administration liberal groups were targeted without any concern by Mr. Issa or anyone else in this committee." (Rep. Darrell Issa, R-Calif., is chair of the House Oversight and Government Reform Committee.)

This caught our eye. Were liberal groups targeted when a Republican held the White House? And if so, were the circumstances back then similar to what has come to light today?

[. . .]

McDermott said liberal groups were targeted during the Bush administration. While some liberal groups were audited, the numbers we could find were small, largely confined to 501(c)(3) nonprofits where the rules are more strict, and stemmed from complaints levied by outsiders.

In contrast, the current case was fueled by internal bureaucratic rules applied to a significantly larger number of organizations. A group’s name or its policy agenda triggered the IRS action, rather than a complaint or the group’s specific activities. While there is an element of truth in McDermott’s statement, the systematic nature of the IRS actions between 2010 and 2012 represents a distinctly different set of circumstances.

We rate the statement Mostly False.

Dare we hope that the rest of the media will pick up this pushback and force McDermott to retract? I mean, holding politicians accountable for their misstatements and fibs is a big part of the media's job. Isn't it?

Lame Excuses for the IRS Scandal Get Lamer and Bite More Dust

Recall that from the outset, after it was revealed that the IRS was targeting conservatives and conservative groups applying for tax-exempt status, IRS-apologists came out with the claim that the unwarranted scrutiny was the result of staffers in Ohio offices who went rogue.  As such, according to the apologists, we were not supposed to think that the agency as a whole was rotten to the core; just that there were a few isolated bad apples who in no way, shape, or form were representative of the IRS as a whole.

That theory never held much water to begin with. It holds even less water now: 

An IRS staffer in Cincinnati told congressional investigators that a Washington official was the driving force behind the targeting of Tea Party organizations in 2010, and showed unprecedented interest in those groups’ tax-exempt applications.

Elizabeth Hofacre, the Cincinnati staffer, said that she started receiving applications from Tea Party groups to sift through in April, 2010. Hofacre’s handling of those cases, she said, was highly influenced by Carter Hull, an IRS lawyer in Washington.

Hofacre said that she integrated questions from Hull into her follow-ups with Tea Party groups, and that Hull had to approve the letters seeking more information that she sent out to those organizations. That process, she said, was both unusual and “demeaning.”

“One of the criteria is to work independently and do research and make decisions based on your experience and education,” Hofacre said, according to transcripts reviewed by The Hill. “Whereas in this case, I had no autonomy at all through the process.”

“I thought it was over the top,” she added, in interviews held by investigators in both parties from the House Oversight and Ways and Means committees. “I am not sure where it came from, but it was a bit unusual.”

Hofacre, who oversaw Tea Party applications from April, 2010, to October, 2010, said Hull eventually became slow to endorse her letters. She eventually took another position within the IRS that year, after dealing with what she called “irate” applicants.

“And I see their point,” Hofacre said. “Even if a decision isn’t favorable, they deserve some kind of treatment and they deserve, you know, timeliness.”

The story goes on to state the following entirely unremarkable conclusion:

[t]he investigators’ interviews with Hofacre and another Cincinnati staffer, Gary Muthert, cast some doubt on statements from the former acting IRS commissioner, Steven Miller, and other agency officials that the targeting of Tea Party groups was limited to Cincinnati.

Accountability Has Become Such an Antiquated Concept

Gene Healy  on the president who is never there:

"Hey, don't look at me -- I'm just the president!" That's the common thread in President Obama's response to his recent scandal eruptions, from IRS harassment of Tea Partiers to his Justice Department's spying on AP reporters. Like everybody else, Obama learns about these things via cable news, according to press secretary Jay Carney.

Obama's flight from responsibility punctured the stratosphere in his recent speech on "the Future of Our Fight against Terrorism" at the National Defense University in D.C. In the speech Obama seemed to position himself as the loyal opposition to his own administration.

He worried that "perpetual war ... will prove self-defeating, and alter our country in troubling ways." Look at the current situation at Guantanamo Bay, Citizen Obama chided, "where we are force-feeding detainees who are being held on a hunger strike ... Is this who we are? Is that something our founders foresaw?" Obama pronounced himself "troubled" by the proliferation of drone strikes in an ever-expanding war and "the possibility that leak investigations may chill the investigative journalism that holds government accountable."

All valid concerns, compassionately expressed. So how can we get this guy into the room when the big decisions are being made?

Mitt Romney may have had his faults as a candidate. No, check that; Mitt Romney most certainly had his faults as a candidate. But I have a hard time believing that he would have been as disengaged a president as the guy we actually re-elected in November of last year has turned out to be.

Scandal Watch (More IRS Follies)

Sigh . . .​

• ​The IRS has problems with you if you are a conservative group that wants to apply for tax-exempt 501(c)(4) status. By contrast, the IRS has no problems whatsoever with itself when it wants to spend money like it is going out of style.
• 88 IRS employees have documents related to the investigation of the IRS's targeting of conservative groups.​ Remember that this story is allegedly only a "so-called scandal," and remember as well--as the CNN story points out--that the initial explanation given for the targeting of conservative groups is that a select few "low-level employees" in one local office decided to go rogue.
• Does this​ read like just a "so-called scandal" to you?

A group of anti-abortion activists in Iowa had to promise the Internal Revenue Service it wouldn’t picket in front of Planned Parenthood.

Catherine Engelbrecht’s family and business in Texas were audited by the government after her voting-rights group sought tax-exempt status from the IRS.

Retired military veteran Mark Drabik of Nebraska became active in and donated to conservative causes, then found the IRS challenging his church donations.

While the developing scandal over the targeting of conservatives by the tax agency has largely focused to date on its scrutiny of groups with words such as “tea party” or “patriot” in their names, these examples suggest the government was looking at a broader array of conservative groups and perhaps individuals. Their collective experiences at a minimum could spread skepticism about the fairness of a powerful agency that should be above reproach and at worst could point to a secret political vendetta within the government against conservatives.

The emerging stories from real people raise questions about whether the IRS scrutiny extended beyond applicants for tax-exempt status and whether individuals who donated to these tax-exempt organizations or to conservative causes also were targeted.

Scandal Watch (The Saga that Won't End)

The latest:​

• ​The IRS targeting of conservative groups is only a "so-called scandal" in the eyes of some, who coincidentally, probably don't like conservatives all that much. Equally coincidental, I am sure, those calling the IRS scandal a "so-called scandal" are members of the media, which we are repeatedly assured is never ideologically biased and treats both sides of the partisan divide fairly and honorably.
• ​Rich Lowry points out that the IRS scandal--which really is much more than a "so-called scandal"--"is a scandal of administrators and bureaucrats, of otherwise faceless people endowed with immense power over their fellow citizens and running free of serious oversight from elected officials." Which makes you feel good about all of the legislation passed that puts more power in these people's hands, right?
• Eric Holder​ is in trouble, as he is facing possible perjury allegations regarding his comments on the Justice Department's investigation of Fox News reporter James Rosen. He has responded to the allegations by inviting media outlets to a discussion with him on how the issue could have been better handled, and what can be done in the future to conduct leak investigations without shredding the First Amendment. Here's the catch: the discussion with the media outlets was supposed to be off the record. So presumably, Holder would discuss better ways to conduct leak investigations and media outlets could not tell the public--the same public that may actually be concerned about the shredding of the First Amendment--anything about his comments. To their credit, a host of media outlets refused to meet with Holder under these conditions. Oh, and the attorney general is “also beginning to feel a creeping sense of personal remorse” over how the leak investigation was handled, which is nice to know. Too bad he refuses to let the public find out how his "creeping sense of personal remorse" will translate into a change in policy at the Justice Department.

Scandal Watch (A Continuing Series)

So, let's review the latest:​

• ​Concerning the IRS scandal, we learn that Lois Lerner was "directly involved" in the targeting of conservative groups. This included signing letters that contained "a list of detailed questions of the kind that a Treasury inspector general’s audit found to be inappropriate."
• Organizing for Action is a 501(c)(4), which means that it is supposed to act in a non-partisan capacity when engaging in advocacy. So naturally, the president of the United States--who is anything but non-partisan--has signed a fundraising letter on behalf of Organizing for Action​, which includes a request to register at this site, which as you will note, contains the name of the non-non-partisan president of the United States in its URL. As of two weeks ago, Organizing for Action has not yet applied for tax-exempt status from the IRS, but I am willing to bet dollars to donuts that when they do, they will encounter no problems whatsoever with their application. To be sure, the IRS won't want to cause yet another scandal by giving yet another prominent 501(c)(4) applicant a hard time, but the point is that plenty of equivalent conservative groups have had to encounter a hard time at the hands of the IRS, while liberal groups have gotten nothing but the kindest cooperation.
• I am pleased to note that Jonathan Turley​ has decided to continue to eat his Wheaties:

Recently, Attorney General Eric Holder appeared before the House Judiciary Committee to answer questions about the administration's sweeping surveillance of journalists with the Associated Press. In the greatest attack on the free press in decades, the Justice Department seized phone records for reporters and editors in at least three AP offices as well as its office in the House of Representatives. Holder, however, proceeded to claim absolute and blissful ignorance of the investigation, even failing to recall when or how he recused himself.Yet, this was only the latest attack on the news media under Holder's leadership. Despite his record, he expressed surprise at the hearing that the head of the Republican National Committee had called for his resignation. After all, Holder pointed out, he did nothing. That is, of course, precisely the point. Unlike the head of the RNC, I am neither a Republican nor conservative, and I believe Holder should be fired.

• ​Also eating their Wheaties: The Wall Street Journal ​editorial board:

Like dumber follows dumb, the scandal of politicized IRS tax enforcement has been followed by calls for a "special prosecutor." Republicans are predictably leading this call against a Democratic Administration, but this is one case in which the GOP should hope it doesn't get its way.

The case for a special counsel is that Attorney General Eric Holder can't be trusted to investigate his Administration, and that the Administration will stonewall Congress. We don't trust Mr. Holder either, but letting him pass the buck to a special prosecutor is doing him a favor. This scandal is best handled in Congressional hearings that educate the public in the next year rather than wait two or three years for potential indictments.

• ​And finally, let us take note of the fact that Stuart Stevens is in danger of depleting the world's Wheaties supply:

In Dan Brown’s new novel, Inferno, the lead character is struck with amnesia, unable to remember critical events even as he’s trying to save the world. Let’s borrow that useful plot device and imagine if American journalists woke up and couldn’t remember who was president. It would be interesting to ask them a few questions:

What would you think of a president under whom the IRS targeted his harshest political opponents, during his reelection campaign?

What would you think of a president whose obsession with leaks and secrecy was so great that he used the Justice Department to obtain phone records of reporters, in violation of Justice’s established procedure?

What would you think of a president whose head of the Department of Justice signed a criminal warrant against a leading journalist working for the news organization most critical of the president—and monitored the movements of the journalist and even went after his mother’s phone records?

What would you think of an administration that directed the president’s press secretary repeatedly to deliver false information concerning the death of an American ambassador?

These are not hypothetical questions—and yet there is an entire class of journalist so invested in a certain moral and ethical image of the president its members are unable to entertain facts that might tarnish that image. They are the pro-Obama equivalent of Birthers, never letting emerging facts cloud the conclusion they’ve already committed to hold.

The same journalists who did not hesitate to assume the worst of previous Republican administrations—E.J. Dionne, Walter Pincus, Jack Shafer, to name a few—are now tying themselves in knots trying to explain that there is nothing to see when the IRS probes Obama’s enemies or that the Justice Department secretly seizing the phone records of one of their peers and his mother was really a good thing. One has to wonder if it were their mother and her records, how that mother-son conversation would play out.

“Well, Mom, you know, the president has to do these things, and I’ve told you time and again not to email Aunt Sally about my sources. Is that any way to keep hope alive?”

Stevens was Mitt Romney's chief strategist in the 2012 presidential election. If he strategized as tough as he wrote this column, we might now have a new president.​

The IRS Scandal Continues to Unfold

If "senior White House officials were focused on shielding" the president, then that necessarily means that they were not focused on serving the American people by getting to the bottom of this scandal. Right?​

As soon as White House counsel Kathryn Ruemmler heard about an upcoming inspector general’s report on the Internal Revenue Service, she knew she had a problem.

The notice Ruemmler saw on April 24 gave her a thumbnail sketch of a disturbing finding: that the IRS had improperly targeted tea party and other conservative groups. She shared the news with White House Chief of Staff Denis McDonough and other senior White House aides, who all recognized the danger of the findings.

But they agreed that it would be best not to share it with President Obama until the independent audit was completed and made public, in part to protect him from even the appearance of trying to influence an investigation.

This account of how the White House tried to deal with the IRS inquiry — based on documents, public statements and interviews with multiple senior officials, including one directly involved in the discussions — shows how carefully Obama’s top aides were trying to shield him from any second-term scandal that might swamp his agenda or, worse, jeopardize his presidency.

The episode also offers a glimpse into the workings of Obama’s insular West Wing, which has struggled to cope in recent weeks with the IRS scandal, the continued fallout from last year’s deadly attack in Benghazi, Libya, and the Justice Department’s tracking of journalists as part of leak investigations.

But Ruemmler and McDonough’s careful plan for the IRS was upended on May 10, when Lois Lerner, a senior official at the agency, broke the news by admitting that the IRS had given extra scrutiny to conservative groups seeking tax-exempt status.

Senior White House officials were stunned to see the IRS trying to get ahead of its own story — and in doing so, creating a monstrous communications disaster for an administration that appeared not to know what its agencies were up to.

I'll refer back to Stephen Bainbridge​ on the issue of whether the president can be made aware of what is going on in his government without seeming to influence an investigation (short version: yes, he can--to coin a phrase). More from the good Professor Bainbridge here. Meanwhile, it is nice to see that the members of the Wall Street Journal's editorial board have eaten their Wheaties:

Every day brings new revelations about who knew what about the IRS targeting conservative groups during President Obama's re-election campaign, but the overall impression is of a vast federal bureaucracy run amok. While the White House continues to peddle the story of a driverless train wreck, taxpayers are being treated to a demonstration of the dangers of an unwieldy and unaccountable administrative state. Look, Ma, no hands!

In his press events, Mr. Obama has said that while he learned about the Cincinnati rogues on the news, he plans to "hold accountable those who have taken these outrageous actions." But the White House began its response by pushing the line that the IRS is an "independent agency," and Mr. Obama has since given the impression that he sits atop a federal government which he does not, and could not possibly, control.

White House senior adviser Dan Pfieffer encouraged that fable on this Sunday's news shows, implying that the Treasury's internal process for handling the unfair treatment of political targets trumped the President's right to know. When CNN political correspondent Candy Crowley asked Mr. Pfieffer why the White House and top Treasury officials weren't notified, he explained that Treasury's investigation was ongoing and "Here's the cardinal rule: You do not interfere in an independent investigation."

Now there's a false choice. The Treasury Inspector General's report, for starters, was an audit, not an inviolable independent investigation. He lacked subpoena power and could bring no criminal charges. Having the President know of the IRS's mistakes so that he could act to correct the problem was not a bridge too far or even clouding the purity of the process. Those things could have been done simultaneously without compromising Treasury's investigation.

Some adult supervision at the White House would be very useful right now. Too bad we don't seem to have it.​

Good Question

As Stephen Bainbridge notes,​ any general counsel of a publicly held corporation would tell the CEO of that corporation about the presence and activities of misbehaving employees.

So why on Earth weren't Barack Obama and/or Treasury Secretary Jack Lew ​informed earlier about misconduct at the IRS? It's one thing to want to make sure that there isn't interference in the process from inappropriate quarters. But it is quite another to be left completely ignorant. Quoth Bainbridge:

. . . First, telling the POTUS about an investigation governmental misconduct in now way suggests that the President interfered with said investigation. Second, the President is not the only one who can interfere with an investigation. To the contrary, if you buy the logic of the "administration officials," it appears that they interfered with the process.

If Ken Lay had told Congress that his Enron subordinates had kept him out of the loop so that it wouldn't appear as though he had interfered with an investigation of the fraud, the Congressmen who adopted Sarbanes-Oxley--an act Obama has often praised--would have howled in derision. And rightly so. Obama should be held to no less a standard.

In short, the guy at whose desk the buck stops should not want to be kept out of the loop.

The number of questions that need to get answered just keeps increasing, now doesn't it?

Metastasis of the IRS Scandal

​When Lois Lerner goes before the House to testify regarding the IRS's targeting of conservative groups, she is not going to offer much actual testimony at all:

A top IRS official in the division that reviews nonprofit groups will invoke the 5th Amendment and refuse to answer questions before a House committee investigating the agency’s improper screening of conservative nonprofit groups. 

Lois Lerner, the head of the exempt organizations division of the IRS, won’t answer questions about what she knew about the improper screening — or why she didn’t disclose it to Congress, according to a letter from her defense lawyer, William W. Taylor III. Lerner was scheduled to appear before the House Oversight Committee on Wednesday.

“She has not committed any crime or made any misrepresentation but under the circumstances she has no choice but to take this course,” said a letter by Taylor to committee Chairman Darrell Issa (R-Vista). The letter, sent Monday, was obtained Tuesday by the Los Angeles Times.

It would be wrong to conclude from Lerner's decision to plead the Fifth alone that she has ​committed any crime. She has the right to remain silent and negative inferences cannot be drawn from that right. Still, as anyone with a brain will tell you, it doesn't look good politically that Lerner is taking the Fifth.

​It also doesn't look good that a Houston-based non-profit dedicated to fighting voter fraud has had its application for tax-exempt status on hold for the past three years. You know, just saying.

And while we're talking about this, it also doesn't look good that the IRS was aware of the facts underlying this scandal back in 2012.​ I trust that there is no longer any real argument over whether this story qualifies as a scandal, though I am sure that there are some outlying pundits who continue to try to deny the reality of the situation.