House Oversight Hearings Begin on IRS Abuse of Conservative Organizations

Today in Washington, D.C. - May 17, 2013
The Senate was not in session today and will reconvene on Monday at 2 PM, when it will take up S. 954, the farm bill. Yesterday, the Senate voted 97-0 to confirm MIT professor Ernest J. Moniz to be Secretary of Energy.

The House was in session this morning voting on Amendments to and passing HR 1062 (235-161) — "To improve the consideration by the Securities and Exchange Commission of the costs and benefits of its regulations and orders." Amendments approved prior to the passage of the bill were: Sessions (R-TX) Amendment No.1 (voice vote) – Mandates that assessment plans required under this Act include analysis of any jobs added or lost as a result of the regulation, differentiating between public and private sector jobs. Hurt (R-VA) Amendment No.2 (233-163) – Expresses the sense of Congress that rules adopted by the Public Company Accounting Oversight Board (PCAOB) comply with the same standards required of the SEC. Requires the SEC to ensure that any rules adopted by the Municipal Securities Rulemaking Board (MSRB), and other national securities associations comply with the standards set forth in the bill.

The major event of the day, was The House Ways and Means Committee initial hearing to investigate the Internal Revenue Service’s (IRS) admitted practice of targeting conservatives and political opponents of President Obama. Committee Chair, Rep. Dave Camp (R-MI) opened the hearing stating:On May 10, 2013, Lois Lerner, Director of Exempt Organizations for the Internal Revenue Service (IRS) division that oversees tax-exempt groups, finally acknowledged that the agency had been targeting conservative-leaning political organizations.

Four days later, the Treasury Inspector General for Taxpayer Administration (TIGTA) confirmed that, “the IRS used inappropriate criteria to identify organizations applying for tax-exempt status.” The report also confirmed that this abuse of power began as far back as 2010.

This revelation goes against the very principles of free speech and liberty upon which this country was founded. The blatant disregard with which the agency has treated Congress and the American taxpayer raises serious concerns about leadership at the IRS.

Let’s establish the facts that we do know. Based on the TIGTA report we know that for an 18-month period beginning in Spring 2010, IRS employees in the agency’s Determinations Unit employed keywords such as “tea party,” “patriot,” and “9/12” to target applicants for tax-exempt status. These groups were then subjected to further IRS investigation and document requests.

IRS employees later expanded their search to include groups concerned about government spending, debt, taxes, the Constitution, the Bill of Rights, or trying to “make America a better place to live.” Let me repeat that, people were targeted for trying to “make America a better place to live.”

These Americans had their applications delayed for nearly three years, and at least 98 applicants were asked for improper and inappropriate information such as donor lists and whether family members planned to run for public office.

During that delay, and while applications of conservative groups sat untouched for more than a year, other applications with names like “progress” and “progressive” were approved in just a matter of months. The headline in USA Today from earlier this week really says it all: “IRS gave liberals a pass; Tea Party groups put on hold.”

TIGTA’s audit found that some of those cases should have been set aside because of concerns related to their potential political activity, but no such review was done. Without objection, I enter the USA Today news report into the record.

This week, we learned that senior IRS officials knew about this activity almost two years ago, in June 2011, and IRS’s leadership in Washington knew of it in May 2012 – a year ago.

Despite a two-year long investigation by this Committee, the IRS never told the American people or their representatives about this simple truth. In fact, we were repeatedly told no such targeting was happening. That isn’t being misleading, that is lying.

But now, we know the truth – or at least some of it. We also know that these revelations are just the tip of the iceberg. It would be a mistake to treat this as just one scandal. This may be the one generating headlines, but in total I count at least five serious violations of the taxpayers’ right to be treated fairly, honestly and impartially by their government.

First, back in August of 2010, a "White House official" discussed the tax status of a private company – a clear intimidation tactic.

Second, in June 2010, the targeting of conservative groups began.

Third, in May 2011, the IRS started to threaten donors to conservative leaning non-profits that they were liable for certain taxes.

Fourth, in March of 2012, the Huffington Post published the confidential 2008 donor list of the National Organization for Marriage, a conservative tax-exempt organization.

And fifth – but unlikely the final transgression – ProPublica announced that the IRS had leaked confidential applications for tax-exempt status from conservative groups.

Mr. Miller, with all due respect, this systemic abuse cannot be fixed with just one resignation. And, as much as I expect more people need to go, the reality is this is not a personnel problem. This is a problem of the IRS being too large, too powerful, too intrusive and too abusive of honest, hardworking taxpayers.

There isn’t a person I come into contact with back home – or anyone in this country frankly – who does not fear the IRS. They fear getting something wrong on their tax filings. And, they fear the IRS’ ability to audit them and wreak havoc in their lives. Especially when all they are trying to do is improve their lives, let alone, God forbid, trying to “make America a better place to live,” which is what the IRS targeted them for.

Under that kind of thinking, every civic group in America is at risk – the Knights of Columbus, the Rotary, the JC’s, the American Legion and VFW clubs. I’m sure you’re aware of the saying that the power to tax is the power to destroy. Well, under this Administration, the IRS has abused its power to tax, and it has destroyed what little faith and hope the American people had in getting a fair shake in Washington.

This will not stand. Trimming a few branches will not solve the problem when the roots of the tree have gone rotten. And, that is exactly what has happened with our entire tax system – it is rotten at the core, and it must be ripped out so we can start fresh. Only then will the American people get a tax system that treats them fairly and honestly, as they deserve.

And, while that is a larger discussion, it is directly tied to the issue before us today – how and why our tax system has gone so far off-track. Many questions still remain:
Why did the IRS repeatedly target the American people and then keep that fact covered-up for so long?
Who started the targeting, who knew, when did they know and how high did it go?
Who leaked private taxpayer information?
Why were the names of donors asked for, and what was done with those lists before they were supposedly discarded?
When did the Administration know about each of these, and what was its reaction?
Listening to the nightly news, this appears to be just the latest example of a culture of cover-ups – and political intimidation – in this Administration. It seems like the truth is hidden from the American people just long enough to make it through an election.

The American people have a right to the truth, to a government that delivers the facts, good or bad, no matter what. President Obama promised to be different and to deliver a better government, the most transparent in history.

He was right. America deserves better. It is time to end the corruption at the IRS and fix a tax code that allows Washington and the IRS to pick who wins and who loses in America.

I expect nothing less than total cooperation by the IRS and this Administration as we investigate what happened and what we must do to fix it.Rep Camp remarked at the hearing, "The reality is, this is not a personnel problem, “This is a problem of the IRS being too large, too powerful, too intrusive and too abusive of honest, hardworking taxpayers. ... This appears to be just the latest example of a culture of coverups and political intimidation in this administration. It seems like the truth is hidden from the American people just long enough to make it through an election.”

USA Today noted, "The panel's top Democrat, Rep. Sandy Levin, D-Mich., said he, too, wanted to find out why the IRS targeted conservative groups for extra scrutiny, and that IRS officials responsible should be fired. But he took exception to the injection of campaign politics into the hearing. 'If instead this hearing becomes an effort to score political points, it will be a disregard of the duties of this committee,' he said." USa Today also noted, "The agency's chief watchdog testified Friday that the Internal Revenue Service has not fully addressed the problems that led it to improperly subject Tea Party and other conservative groups to extra scrutiny. 'We do not consider the concerns in this report to be resolved,' Treasury Inspector General for Tax Administration J. Russell George said."

David Weigel at Slate noted "By general acclimation, the greatest Moment from today's battering of the IRS (with an assist from the bored, doomed outgoing acting commissioner) came when Pennsylvania Rep. Mike Kelly went buck wild. After pressuring the witness a few times and getting non-answers, Kelly finally just went on a tirade about the IRS, the "monster under the bed," the force that terrifies hard-working Americans. When he finished, Kelly earned spontaneous applause from the public seats."

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