The IRS Scandal to Date

For those of you not in the US, you may not be up on the IRS scandal. You may even be wondering what the IRS is and why we Americans care so much.

The Internal Revenue Service (or IRS) is the bane of many Americans lives. Every April 15th, taxes are due to the IRS. And they have the power to do what’s called an audit if they smell shenanigans. An audit is where they force you to turn over proof that you don’t owe them money. Proof for the last seven years. And if they get really energetic, they can go back to the first return you ever did.

Nobody much likes them, but pretty much everyone thinks of them as fair. (Or, at least, that if you were in trouble with them, it was most likely your own fault).

Or, at least they did until May 2014.

Some groups here in the US started noticing that they were being asked to do a lot of audits. These groups all had a similar ideology, what’s labeled conservative here in the US. Especially groups belonging to a new political player on the scene of our two party politics, the Tea Party which is very far “right” or conservative. (Why the conservatives are on the right and the liberals on the left is a long conversation, best left to another post some other time). So the Federal Bureau of Investigations (the FBI) decided to open a probe of the IRS. Which doesn’t necessarily mean anything, of course. Just that they’re curious as to what’s there. Interestingly enough, the attorney general Eric Holder was the one who asked for it. (Why interesting? Well, let’s just say that Eric Holder has some real issues in his character). But the probe revealed some “inappropriate criteria” were used. Everyone agrees the IRS should be scrutinizing groups that are trying to masquerade as something they’re not, (certain groups in the USA get tax breaks while others don’t – the rules are complex) but that wasn’t was going on.

So now the investigation began as to exactly what criteria was used, for how long, and who knew about it. And another grand American tradition: lawsuits. Expensive lawsuits.

There was some initial thought that perhaps a lot of groups were being targeted, regardless of ideology, but that was found to not be the case. Conservative groups were overwhelmingly targeted. Beginning in March 2010 through May 2013, the IRS targeted groups with certain words in their names. Yes, really. It started in Cincinnati and grew like a cancer to other offices in Washington D.C. (the main seat of Federal government) and California. The groups were put on a “Be On the Lookout” list. A number of the conservative groups had their applications dragged out for years, while liberal groups were approved on the spot. It is true that some of the groups had good reason to be investigated. But the majority of them simply had the “bad luck” to be aligned with certain political groups. And investigation in 20113 revealed that higher officials knew about this as early as mid 2011. In 2012, IRS Commissioner Douglas Shulman was asked about it and denied it was happening – then resigned his post before the controversy came to light. And refused to apologize it happened on his watch for awhile. (Always amusing).

This was only the beginning of “coincidences” like that. And the usual fighting over who knew what and when.

In May 2013, the Treasury Inspector General for Tax Administration released an audit report which confirmed the IRS was using inappropriate criteria. This audit report found that: “some IRS employees were ‘ignorant about tax laws, defiant of their supervisors and blind to the appearance of impropriety'”. Before the audit was released, Director of the IRS Exempt Organizations division Lois Lerner answered a question before the House Ways and Means committee, saying the IRS was apologetic for inappropriate actions. (This question was later revealed to be planted). She asserted that it was only lower level employees and not centrally planned, but the Treasury Inspector General for Tax Administration report showed that Lerner herself had been informed at a meeting she had attended on June 29, 2011. An IRS watchdog (J. Russell George) was criticized for not bringing the issue to light earlier, but claimed he wanted to be sure of the facts.

So a deeper investigation began by the House Committee on Oversight and Government Reform. Which began, as you might expect, with Lois Lerner. Who said, and I quote: “I have not done anything wrong. I have not broken any laws. I have not violated any IRS rules or regulations. And I have not provided false information to this or any other congressional committee.” She then pled the 5th. (The amendment against self-incrimination). Which is an interesting plea for someone who hasn’t done anything wrong or broken any laws. However, since she had told part of the story to Congress already, she was found to have waived 5th Amendment rights. (You don’t get to tell just part of the story and not be questioned about it). There’s a lot of controversy over whether or not she can selectively invoke silenced, since she was called before a grand jury. In May 2013, former Commissioner Shulman stated he was “absolutely sure” he had not told anybody in the White House about the targeting, despite the fact he visited the White House on a regular basis. (Though not as often as some have asserted).

Needless to say, when the whole thing went public, people were not happy.

There were demonstrations in front of the White House, in Cherry Hill, and other places. Obama denounced the IRS for the targeting of the groups. There was a call for Acting Commissioner of the IRS, Steven Miller, among others, to resign. And, of course, Lois Lerner. She refused to resign and was placed on administrative leave, then retired in September 2013.

Then the controversy died down a bit – until this past week. When the IRS, again an organization obsessed with people keeping records, claimed to be missing emails from Lerner.

I’ll give you a moment to imagine how that went down.

So then it turned out that it was not just Lerner – seven people involved in the investigation were mysteriously “missing” emails. Not that anybody actually thinks this is feasible, you will remember. And it sure was a funny coincidence that at least one of those people visited the White House a lot. Until, that is, it turned out the IRS has known this for months.

You would think the very least the IRS could do is apologize, right? Right?

Well, they’re not doing that.

Now, lawmakers are calling on the National Security Administration (NSA) to release the emails. (An agency that got in hot water not long ago for, well, keeping records on Congress it wasn’t supposed to). If the NSA’s record keeping proves better than the IRS, there’s really only one conclusion to be drawn.

The NSA ought to be in charge of collecting taxes.

More on this story as it unfolds.