IRS Commissioner tells Noem IRS audit process remains at risk for abuse and targeting

IRS Commissioner tells Noem IRS audit process remains at risk for abuse and targeting

Washington, D.C. – Rep. Kristi Noem, a member of the House Ways and Means Committee, questioned IRS Commissioner John Koskinen yesterday on a new Government Accountability Office (GAO) report that detailed flaws in the IRS audit selection process that could lead to targeting of organizations based on their political beliefs and other First Amendment protected views. The GAO is the nonpartisan investigative arm of Congress.

In the wake of the Lois Lerner scandal—which revealed the IRS targeted conservative groups – the House Ways and Means Committee asked the GAO to look into the IRS audit process for tax-exempt organizations. Noem and the committee were concerned the IRS could use its vast auditing power to target groups the same way. These fears were confirmed in the GAO’s report and Noem’s line of questioning.

GAO’s final report shows the current audit process is ripe for improper targeting. According to the GAO, “the control deficiencies GAO found increase the risk that EO (Exempt Organizations unit) could select organizations for examination in an unfair manner—for example, based on an organization’s religious, educational, political, or other views.”

The GAO report’s supporting findings include:

· IRS’s audit procedures are not sufficiently documented or followed, and in some instances, GAO found that even the IRS did not have a record of why certain cases were selected for audit.

· The same small group of people have been reviewing audit referrals, which are essentially third-party complaints made to IRS, for years without sufficient review or oversight of their decisions.

· Management within IRS does not consistently monitor selection decisions, which could allow people with bias to unfairly select organizations for audit.

The full report can be read here.