IRS targeting controversy

[3] In October 2017, the Trump administration agreed to settle a lawsuit filed on behalf of more than four hundred conservative nonprofit groups who claimed that they had been discriminated against by the Internal Revenue Service for an undisclosed amount described by plaintiffs' counsel as "very substantial."

The Trump administration also agreed to settle a second lawsuit brought by forty-one conservative organizations with an apology and an admission from the IRS that subjecting them to "heightened scrutiny and inordinate delays" was wrongful.

Treasury regulations interpreting this statutory language apply a more relaxed standard, namely, that the organization "is operated primarily for the purpose of bringing about civic betterments and social improvements".

[20] Public-interest advocacy groups such as Public Citizen and Democracy 21 complained that the IRS and Federal Election Commission were failing to provide adequate oversight for 501(c) nonprofit organizations that were pouring money into political campaigns.

"[36] Beginning in March 2010, the IRS more closely scrutinized certain organizations applying for tax-exempt status under sections 501(c)(3) and 501(c)(4) of the Internal Revenue Code by focusing on groups with certain words in their names.

[37][38][39] In May 2010, some employees of the "Determinations Unit" of the Cincinnati office of the IRS, which is tasked with reviewing applications pertaining to tax-exempt status, began developing a spreadsheet that became known as the "Be On the Look Out" ("BOLO") list.

He stated that "Rather than the Nixonian conspiracy that George Will and The Wall Street Journal editorial page so darkly warned about—with zero evidence—you have a routine bureaucratic procedure meant to bundle potentially problematic applicants together for further review.

"[54] The Coalition for Life of Iowa, a group opposed to abortion rights, was asked to "Please explain how all of your activities, including the prayer meetings held outside of Planned Parenthood are considered educational as defined under 501(c)(3).

"[60] In November 2013, the investigative reporting organization ProPublica requested information from the IRS on 67 nonprofit groups that had spent money on the 2012 elections, including Karl Rove's Crossroads GPS.

[61][62] Inspector General J. Russell George's report recommended that the IRS create clearer rules and conduct more training for employees on 501(c)(4) issues, including gift tax exemptions.

[62] In early May 2013, the Treasury Inspector General for Tax Administration released an audit report confirming that the IRS used inappropriate criteria to identify potential political cases, including organizations with Tea Party in their names.

The IRS used inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based upon their names or policy positions instead of indications of potential political campaign intervention.

[11]The Inspector General concluded, "although the IRS has taken some action, it will need to do more so that the public has reasonable assurance that applications are processed without unreasonable delay in a fair and impartial manner in the future.

[78][79][80] A spokesman for the Inspector General's office in charge of the IRS audit said they had been asked by House Oversight Chairman Darrell Issa (R-CA) "to narrowly focus on Tea Party organizations".

While he had many sources confirming the use of "Tea Party" and related criteria described in the report, including employee interviews and e-mails, he found no indication in any of those other materials that "Progressives" was a term used to refer cases for scrutiny for political campaign intervention.

[82][86][87][88] In late September 2017, an exhaustive report by the Treasury Department's inspector general found that from 2004 to 2013, the IRS used both conservative and liberal keywords to choose targets for further scrutiny, blunting claims that the issue had been an Obama-era partisan scandal.

Montana's then-senator Max Baucus said the allegations were an "outrageous abuse of power," and West Virginia senator Joe Manchin called the IRS's actions "un-American.

[99] Michael Macleod-Ball, chief of staff at the ACLU's Washington Legislative Office, said, "Even the appearance of playing partisan politics with the tax code is about as constitutionally troubling as it gets.

With the recent push to grant federal agencies broad new powers to mandate donor disclosure for advocacy groups on both the left and the right, there must be clear checks in place to prevent this from ever happening again.

"[101] There were rallies by members of the Tea Party in Cherry Hill, New Jersey,[102] as well as across the country protesting selective targeting by the IRS of conservative groups seeking tax-exempt status.

"[113] Catherine Engelbrecht, founder of conservative group True the Vote, filed a lawsuit claiming that her organization's tax-exempt status was unfairly delayed for three years, and alleging that she and her family's small manufacturing business were chosen for retaliatory investigations by the IRS, OSHA, the ATF, and the FBI.

[131] Oversight Committee Chairman Darrell Issa later asserted that Lerner had waived her Fifth Amendment rights by giving partial testimony and that he intended to call her back into the hearings.

Regent University law professor James Joseph Duane told New York magazine that Gowdy's assertion was "extremely imaginative" but "mistaken" because a person who is involuntarily summoned before a grand jury or a legislative body may selectively invoke the right to silence.

[138] On June 9, 2013, Rep. Cummings released portions of an interview transcript in which an anonymous IRS manager who described himself as a "conservative Republican" told Congressional investigators that he had initiated the selected reviews without any involvement from the White House and that the extra scrutiny was not politically motivated.

"[112] Oversight Committee Chairman Issa responded in a statement, "The testimony excerpts Ranking Member Cummings revealed today did not provide anything enlightening or contradict other witness accounts.

[149] These five workers include two people based in Cincinnati who worked on Tea Party cases; according to the IRS the crashes all predate congressional investigations and had occurred between September 2009 and February 2014.

[153] On November 22, 2014, a spokesman for the House Oversight and Government Reform Committee's Republican majority stated that TIGTA investigators told Congress that they had recovered up to 30,000 emails to and from Lois Lerner.

The Republican report (entitled "Additional View of Senator Hatch Prepared by Republican Staff") stated that the IRS had targeted Tea Party groups for "politically motivated reasons," while the Democratic report (entitled "Additional View of Senator Wyden Prepared by Democratic Staff") blamed the agency's failures on "gross mismanagement" that treated groups in the same poor manner regardless of ideology.

[170][171] Those sponsoring the impeachment resolution to remove Koskinen from office accused him of failing to prevent the destruction of evidence in allowing the erasure of back-up tapes containing thousands of e-mails written by Lois Lerner, and of making false statements under oath to Congress.

Representative Cummings said in a statement: "This ridiculous resolution will demonstrate nothing but the Republican obsession with diving into investigative rabbit holes that waste tens of millions of taxpayer dollars while having absolutely no positive impact on a single American.