The Latest on the IRS Scandal

Once again, I want to mention that I am really sick of writing about this issue. But it deserves the maximum amount of attention possible.

First off, it would appear that the Obama administration knew that the IRS was targeting conservative groups for extra scrutiny back in the 2012 campaign:

There were new questions Saturday night concerning if anyone in the White House was aware of the IRS’ targeting of conservative groups.

Inspector General Russell George said he informed a deputy at the Treasury Department in June of 2012 about the probe into the IRS.

The Treasury Department confirmed the timeline but said they did not know the details of the investigation until last week.

It’s the first evidence that someone within the Obama administration knew about the practice during the presidential campaign.

It is unknown whether anyone in the White House was told of the federal investigation.

I can only hope that someone will be allowed to ask questions regarding this issue without hearing complaints that such questions are “offensive.” Speaking of the issue of what certain people knew and when they knew it …

The White House’s chief lawyer learned weeks ago that an audit of the Internal Revenue Service likely would show that agency employees inappropriately targeted conservative groups, a senior White House official said Sunday.

That disclosure has prompted a debate over whether the president should have been notified at that time.

Can we ask questions about this as well?

A story in the Washington Post yesterday about the Internal Revenue Service’s Cincinnati office, which does most of the agency’s nonprofit auditing, clearly contradicted earlier reports that the agency’s targeting of Tea Party groups was the result of rogue agents.

The Post story anonymously quoted a staffer in Cincinnati as saying they only operate on directives from headquarters:

As could be expected, the folks in the determinations unit on Main Street have had trouble concentrating this week. Number crunchers, whose work is nonpolitical, don’t necessarily enjoy the spotlight, especially when the media and the public assume they’re engaged in partisan villainy.

“We’re not political,’’ said one determinations staffer in khakis as he left work late Tuesday afternoon. “We people on the local level are doing what we are supposed to do. . . . That’s why there are so many people here who are flustered. Everything comes from the top. We don’t have any authority to make those decisions without someone signing off on them. There has to be a directive.”

(Emphasis in the original.) Meanwhile, I am pleased to note that Glenn Kessler has eaten his wheaties:

In the days since the Internal Revenue Service first disclosed that it had targeted conservative groups seeking tax-exempt status, new information has emerged from both the Treasury inspector general’s report and congressional testimony Friday that calls into question key statements made by Lois G. Lerner, the IRS’s director of the exempt organizations division.

The clumsy way the IRS disclosed the issue, as well as Lerner’s press briefing by phone, were seen at the time as a public relations disaster. But even so, it is worth reviewing three key statements made by Lerner and comparing them to the facts that have since emerged.

“But between 2010 and 2012, we started seeing a very big uptick in the number of 501(c)(4) applications we were receiving, and many of these organizations applying more than doubled, about 1500 in 2010 and over 3400 in 2012.”

Lerner made this comment while issuing a seemingly impromptu apology at an American Bar Association panel. (It was later learned that this was a planted question — more on that below.) In her telling, the tax-exempt branch was simply overwhelmed by applications, and so unfortunate shortcuts were taken.

But this claim of “more than doubled” appears to be a red herring. The targeting of groups began in early 2010, after the Supreme Court’s decision in Citizens United v. FEC was announced on Jan. 21. The ruling led to increased interest in a tax-exempt status known as 501(c)(4). Most charities apply under 501(c)(3), but under 501(c)(4), nonprofit groups that engage in “social welfare” can also perform a limited amount of election activity.

At first glance, the inspector general’s report appears to show that the number of 501(c)(4) applications actually went down that year, from 1,751 in 2009 to 1,735.

But it turns out that these are federal fiscal-year figures, meaning “2010” is actually Oct. 1, 2009 to Sept. 30, 2010, so the “2010” year includes more than three months before the Supreme Court decision was announced.

Astonishingly, despite Lerner’s public claim, an IRS spokeswoman was not able to provide the actual calendar year numbers. By allocating one-quarter of the fiscal year numbers to the prior year, we can get a very rough sense of the increase on a calendar-year basis. (Figures are rounded to avoid false precision; 2012 is not possible to calculate.)

2009: 1745

2010: 1865

2011: 2540

In other words, while there was an increase in 2010, it was relatively small. The real jump did not come until 2011, long after the targeting of conservative groups had been implemented. Also, it appears Lerner significantly understated the number of applications in 2010 (“1500”) in order to make her claim of “more than doubled.”

Four Pinocchios are given to Lerner for her misstatements, though Kessler notes in the title of his post that she deserves “a bushel.” I couldn’t agree more.

Finally, let it be noted that the best satire has the ring of truth about it.

  1. Richard Fulmer

    Thanks for continuing to report on this.  I do think, however, that the “awarding of Pinocchios” to administration officials for lying to the public tends to trivialize their offense and the seriousness of the administration’s actions. 

  2. Nick Stuart

    Only one comment! 

    Probably because Pejman nailed it. 

    Again demonstrates why there needs to be a “like” button for the prime post as well as comments on the post.

  3. Joker

    Keep at it Pejman, good post. This is a huge deal.

    The point of burocracy is that it has no overt political leaning. A lot of IRS employees have kinda crapped in the nest and do not deserve the protection normally afforded to civil servants.  Many are effectively tenured.

    Their precious retirement benefits must be jeopardized by partisanship. Otherwise any employee approaching retirement can go rogue. And if the penalty is retiring two weeks early like Miller, why not stick it to somebody you disagree with?

  4. Pejman Yousefzadeh
    C

    We aim to please.

    Nick Stuart: Only one comment! 

    Probably because Pejman nailed it. 

    Again demonstrates why there needs to be a “like” button for the prime post as well as comments on the post. · 13 hours ago

  5. Pejman Yousefzadeh
    C

    Columnists can only do so much.

    Richard Fulmer: Thanks for continuing to report on this.  I do think, however, that the “awarding of Pinocchios” to administration officials for lying to the public tends to trivialize their offense and the seriousness of the administration’s actions.  · 18 hours ago

  6. Yeah...ok.

    Didn’t many in the Obama administration owe back taxes when they joined the Washington establishment? How do all these ‘qualified’ bureaucrats earn management positions in government yet they seem unwilling, unable or unconcerned with following regulations for which they are responsible?

    Did the IRS treat Democrats easier than conservatives?

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