IRS Targets Tax-Exempt Applications Of Administration Opponents

Posted On Friday, May 17, 2013

A story that has developed throughout the week, the Internal Revenue Service targeting of conservative groups applying for tax-exempt status, now has criminal implications for top officials of the IRS.  The allegations, which fully came to light with the release of the Treasury Inspector General’s Report, are that beginning in 2010 and continuing for more than 18 months, the IRS used inappropriate criteria to identify tax-exempt applications for review. 

Specifically, the IRS identified organizations with the name “Tea Party,” “Patriots,”  “9/12 Project” or other political sounding names.  The IRS also flagged applications for organizations that identified issues such as government spending, government debt and taxes, that aimed to “make America a better place to live” through advocacy or lobbying, or that included a statement in the application criticizing how the country is being run.  Once these political groups had been identified, the IRS delayed the processing of their applications and issued unnecessary and burdensome information requests. 

In response to the IG Report, Attorney General Eric H. Holder, Jr., indicated that the Justice Department will investigate whether the targeted groups had their civil rights criminally violated and whether false statements were made by IRS officials in violation of criminal statutes.  The statements likely at issue appear to be the potentially false information provided by IRS officials to members of Congress in late 2012. 

One of these officials, acting IRS Commissioner Steve Miller, resigned on Wednesday.  In July of 2012, Miller, then the Deputy Commissioner, testified before a Congressional oversight committee but did not admit to any targeting efforts, despite being questioned about them.  Miller’s resignation came on the heels of news that the IRS had identified two employees in its Cincinnati office, who were primarily responsible for the improper targeting.  According to Miller, the two employees have been disciplined, however there is a debate over whether the improper targeting was actually limited to these employees.