Congressman Darrell Issa (R-Calif.) released a report Tuesday concluding that the Internal Revenue Service knowingly and systematically targeted conservative organizations under the watch of agency leaders.
The report excerpts emails from IRS employees that sought to find loopholes to disqualify or delay conservative political groups from 501(c)(4) status, which confers tax exempt status and anonymity for donors.
According to the IRS definition, in order to be tax exempt, a 501(c)4 must be organized for the general social welfare. They are allowed to lobby, but only for issues that relate directly to their social welfare mission. A group that presented itself as a general welfare organization, but was really a partisan political group would not properly be classified as a 501(c)(4).
An Icky Feeling
“I’m not sure we can deny them because, technically, I don’t know that I can deny them simply for donating to another 501(c)(4),” one IRS agent wrote, and another replied, “This sounds like a bad org … This org gives me an icky feeling.”
By October of 2010, the backlog of c4 applications from conservative groups awaiting approval from the Washington office had grown to 60, whereas only seven in the backlog could be identified as progressive, the report said.
Senior Leadership
The report alleges that former senior officials in the IRS were responsible for corruption, including Commissioner Doug Shulman and Deputy Commissioner Steven Miller.
The report charges that Miller lied to Congress during a 2012 hearing by not disclosing the targeting when asked about it. It cited an internal email by Miller in which he considered going to the hearing to “put a stake in politics and c4.”
The report also cites an email from Cindy Thomas, head of the IRS’s Cincinnati office, to Lerner, accusing IRS leaders of downplaying their role in creating the backlog of applications.
“I feel as though Cincinnati employees and EO Determinations was basically thrown under a bus and that the Washington office wasn’t taking any responsibility for knowing about these applications, having been involved in them and being the ones to basically delay processing of the cases,” Thomas told the committee in an interview.
Conservative groups were first flagged for additional scrutiny in applications filed by the Cincinnati office.
The report cited emails from Lois Lerner, former director of the Exempt Organizations Division, as evidence of systemic bias. Referring to a tea party test case, Lerner wrote in 2011 that “it would be great if we can get there without saying the only reason they don’t get a [c3 status] is political activity.”
