Internal Revenue Service Corruption

[Guest Fed Up]

Listened to CSpan yesterday. I found it interesting how the Justice Department did not know who had jurisdiction over the IRS and whether it was an independent agency like the Federal Reserve.

[Guest LAW]

Speaker John Boehner today addressed the growing IRS scandal whereby administration officials admitted to wrongfully targeting conservatives and political opponents of President Obama, and reportedly gave preferential treatment to liberal groups and allies of the White House. Boehner said:

“The IRS admitted to targeting conservatives, even if the White House continues to be stuck on the word ‘if.’ My question isn't about who is going to resign. My question is who's going to jail over this scandal?”

The House Ways & Means Committee will hold a hearing to investigate the IRS this Friday at 9:00 AM ET, and the Oversight & Government Reform Committee will hold a hearing next Wednesday.

[Guest ProPublica]

The same IRS office that deliberately targeted conservative groups applying for tax-exempt status in the run-up to the 2012 election released nine pending confidential applications of conservative groups to ProPublica late last year.

 

The IRS did not respond to requests Monday following up about that release, and whether it had determined how the applications were sent to ProPublica.

 

In response to a request for the applications for 67 different nonprofits last November, the Cincinnati office of the IRS sent ProPublica applications or documentation for 31 groups. Nine of those applications had not yet been approved—meaning they were not supposed to be made public. (We made six of those public, after redacting their financial information, deeming that they were newsworthy.)

 

On Friday, Lois Lerner, the head of the division on tax-exempt organizations, apologized to Tea Party and other conservative groups because the IRS’ Cincinnati office had unfairly targeted them. Tea Party groups had complained in early 2012 that they were being sent overly intrusive questionnaires in response to their applications.

 

That scrutiny appears to have gone beyond Tea Party groups to applicants saying they wanted to educate the public to “make America a better place to live” or that criticized how the country was being run, according to a draft audit cited by many outlets. The full audit, by the Treasury Department’s inspector general for tax administration, will reportedly be released this week. (ProPublica was not contacted by the inspector general’s office.) (UPDATE May 14: The audit has been released.)

 

Before the 2012 election, ProPublica devoted months to showing how dozens of social-welfare nonprofits had misled the IRS about their political activity on their applications and tax returns. Social-welfare nonprofits are allowed to spend money to influence elections, as long as their primary purpose is improving social welfare. Unlike super PACs and regular political action committees, they do not have to identify their donors.

 

In 2012, nonprofits that didn’t have to report their donors poured an unprecedented $322 million into the election. Much of that money — 84 percent — came from conservative groups.

As part of its reporting, ProPublica regularly requested applications from the IRS’s Cincinnati office, which is responsible for reviewing applications from nonprofits.

 

Social welfare nonprofits are not required to apply to the IRS to operate. Many politically active new conservative groups apply anyway. Getting IRS approval can help with donations and help insulate groups from further scrutiny. Many politically active new liberal nonprofits have not applied.

Applications become public only after the IRS approves a group’s tax-exempt status.

On Nov. 15, 2012, ProPublica requested the applications of 67 nonprofits, all of which had spent money on the 2012 elections. (Because no social welfare groups with Tea Party in their names spent money on the election, ProPublica did not at that point request their applications. We had requested the Tea Party applications earlier, after the groups first complained about being singled out by the IRS. In response, the IRS said it could find no record of the tax-exempt status of those groups — typically how it responds to requests for unapproved applications.)

Just 13 days after ProPublica sent in its request, the IRS responded with the documents on 31 social welfare groups.

 

One of the applications the IRS released to ProPublica was from Crossroads GPS, the largest social-welfare nonprofit involved in the 2012 election. The group, started in part by GOP consultant Karl Rove, promised the IRS that any effort to influence elections would be “limited.” The group spent more than $70 million from anonymous donors in 2012.

 

Applications were sent to ProPublica from five other social welfare groups that had told the IRS that they wouldn’t spend money to sway elections. The other groups ended up spending more than $5 million related to the election, mainly to support Republican presidential candidate Mitt Romney. Much of that money was spent by the Arizona group Americans for Responsible Leadership. The remaining four groups that told the IRS they wouldn’t engage in political spending were Freedom Path, Rightchange.com II, America Is Not Stupid and A Better America Now.

The IRS also sent ProPublica the applications of three small conservative groups that told the agency that they would spend some money on politics: Citizen Awareness Project, the YG Network and SecureAmericaNow.org. (No unapproved applications from liberal groups were sent to ProPublica.)

 

The IRS cover letter sent with the documents was from the Cincinnati office, and signed by Cindy Thomas, listed as the manager for Exempt Organizations Determinations, whom a biography for a Cincinnati Bar Association meeting in January says has worked for the IRS for 35 years. (Thomas often signed the cover letters of responses to ProPublica requests.) The cover letter listed an IRS employee named Sophia Brown as the person to contact for more information about the records. We tried to contact both Thomas and Brown today but were unable to reach them.

After receiving the unapproved applications, ProPublica tried to determine why they had been sent. In emails, IRS spokespeople said ProPublica shouldn’t have received them.

“It has come to our attention that you are in receipt of application materials of organizations that have not been recognized by the IRS as tax-exempt,” wrote one spokeswoman, Michelle Eldridge. She cited a law saying that publishing unauthorized returns or return information was a felony punishable by a fine of up to $5,000 and imprisonment of up to five years, or both.

 

In response, ProPublica’s then-general manager and now president, Richard Tofel, said,

 

"ProPublica believes that the information we are publishing is not barred by the statute cited by the IRS, and it is clear to us that there is a strong First Amendment interest in its publication.”

ProPublica also redacted parts of the application to omit financial information.

 

Jonathan Collegio, a spokesman for Crossroads GPS, declined to comment today on whether he thought the IRS’s release of the group’s application could have been linked to recent news that the Cincinnati office was targeting conservative groups.

 

Last December, Collegio wrote in an email: “As far as we know, the Crossroads application is still pending, in which case it seems that either you obtained whatever document you have illegally, or that it has been approved.”

 

This year, the IRS appears to have changed the office that responds to requests for nonprofits’ applications. Previously, the IRS asked journalists to fax requests to a number with a 513 area code — which includes Cincinnati. ProPublica sent a request by fax on Feb. 5 to the Ohio area code. On March 13, that request was answered by David Fish, a director of Exempt Organizations Guidance, in Washington, D.C.

 

In early April, a ProPublica reporter’s request to the Ohio fax number bounced back. An IRS spokesman said at the time the number had changed “recently.” The new fax number begins with 202, the area code for Washington, D.C.

 

http://www.propublic...nfidential-docs

[Guest PEER]

Will the IRS be handling the payments to OBAMACARE?

[Guest Our America Initiative]

The American people need to understand that these types of government abuses of power are happening every day. As long as we have an IRS and a tax code that is designed to reward some and punish others, it will be used as a massive tool of government force. And when laws such as the Patriot Act and the NDAA are enacted, the provisions of those laws WILL be used to trample our rights.

 

Spreading that understanding and mobilizing Americans to stand up for our rights is exactly why the Our America Initiative was founded, and exactly why we want and need your support for our Live Free Projects. Your contribution today at Our America allows us to sponsor the campus rallies, arrange the media appearances and use state-of-the-art communications tools to reach the millions of individuals who can, when organized, push back against the very abuses that are dominating the news these past few days.

 

I have made the personal decision that I cannot sit by and let liberty and freedom be destroyed by our very own government. I hope you will make that same decision, and join me in supporting Our America. Your contribution, no matter how small -- or how large, goes directly to finance the fight for liberty. Please take a moment to help.

 

We can win this fight. Never before in our lifetimes has the nation been more ready to demand a smaller, less costly and less abusive government. The Our America Initiative has a critical role to play in restoring liberty, and you have a critical role to play in making our work possible.

 

Governor Gary Johnson

Honorary Chairman

Our America Initiative

[Guest Guest]

May 15, 2013

Statement by the President

East Room

6:21 P.M. ED

 

THE PRESIDENT: Good afternoon, everybody. I just finished speaking with Secretary Lew and senior officials at the Treasury Department to discuss the investigation into IRS personnel who improperly screened conservative groups applying for tax-exempt status. And I look forward to taking some questions at tomorrow’s press conference, but today, I wanted to make sure to get out to all of you some information about what we’re doing about this, and where we go from here.

I’ve reviewed the Treasury Department watchdog’s report, and the misconduct that it uncovered is inexcusable. It’s inexcusable, and Americans are right to be angry about it, and I am angry about it. I will not tolerate this kind of behavior in any agency, but especially in the IRS, given the power that it has and the reach that it has into all of our lives. And as I said earlier, it should not matter what political stripe you’re from -- the fact of the matter is, is that the IRS has to operate with absolute integrity. The government generally has to conduct itself in a way that is true to the public trust. That’s especially true for the IRS.

 

So here’s what we’re going to do.

 

First, we’re going to hold the responsible parties accountable. Yesterday, I directed Secretary Lew to follow up on the IG audit to see how this happened and who is responsible, and to make sure that we understand all the facts. Today, Secretary Lew took the first step by requesting and accepting the resignation of the acting commissioner of the IRS, because given the controversy surrounding this audit, it’s important to institute new leadership that can help restore confidence going forward.

 

Second, we’re going to put in place new safeguards to make sure this kind of behavior cannot happen again. And I’ve directed Secretary Lew to ensure the IRS begins implementing the IG’s recommendations right away.

 

Third, we will work with Congress as it performs its oversight role. And our administration has to make sure that we are working hand in hand with Congress to get this thing fixed. Congress, Democrats and Republicans, owe it to the American people to treat that authority with the responsibility it deserves and in a way that doesn’t smack of politics or partisan agendas. Because I think one thing that you’ve seen is, across the board, everybody believes what happened in -- as reported in the IG report is an outrage. The good news is it’s fixable, and it’s in everyone’s best interest to work together to fix it.

 

I’ll do everything in my power to make sure nothing like this happens again by holding the responsible parties accountable, by putting in place new checks and new safeguards, and going forward, by making sure that the law is applied as it should be -- in a fair and impartial way. And we’re going to have to make sure that the laws are clear so that we can have confidence that they are enforced in a fair and impartial way, and that there’s not too much ambiguity surrounding these laws.

 

So that's what I expect. That's what the American people deserve. And that's what we’re going to do.

 

Thank you very much.

END

6:25 P.M. EDT

[Guest LAW]

May 16, 2013

 

President Obama Appoints Daniel Werfel as Acting Commissioner of Internal Revenue

 

WASHINGTON – President Obama today announced the appointment of Daniel Werfel as Acting Commissioner of Internal Revenue, effective Wednesday, May 22. As Acting Commissioner, Mr. Werfel will lead efforts to ensure the IRS implements new safeguards to restore public trust and administers the tax code with fairness and integrity. Mr. Werfel has agreed to serve through the end of the fiscal year.

 

President Obama said, “Throughout his career working in both Democratic and Republican administrations, Danny has proven an effective leader who serves with professionalism, integrity and skill. The American people deserve to have the utmost confidence and trust in their government, and as we work to get to the bottom of what happened and restore confidence in the IRS, Danny has the experience and management ability necessary to lead the agency at this important time.”

 

Mr. Werfel, 42, currently serves as Controller of the Office of Management and Budget (OMB), where he has led efforts across the federal government to improve Federal program integrity, including all areas of financial management, financial reporting, accounting standards, improper payments, and financial systems, among others. Prior to his current role, Mr. Werfel served in multiple career civil service capacities at OMB, including as Deputy Controller, Chief of the Financial Integrity and Analysis Branch, Budget Examiner in the Education Branch, and Policy Analyst in the Office of Information and Regulatory Affairs. Mr. Werfel has also served as a Trial Attorney in the Department of Justice's Civil Rights Division.

 

Mr. Werfel is a recipient of both national and local awards from the Association of Government Accountants for his contributions to Federal financial management. During the Bush Administration, he was the recipient of the Presidential Rank Award for Meritorious Service. Mr. Werfel also served as a member of the Federal Accounting Standards Advisory Board from 2006 to 2009.

 

Mr. Werfel holds a Masters Degree in Public Policy from Duke University, a Juris Doctor from the University of North Carolina at Chapel Hill, and a Bachelors Degree in Industrial and Labor Relations from Cornell University.

[wiley]

Our country needs to move forward. We really need to make penalties severe for those in charge as there are for American taxpayers.