Republicans, Democrats Agree: IRS “Delinquent” With Treatment of Tax-Exempt Organizations
“The Obama IRS was grossly incompetent, it improperly targeted groups for political reasons, and it stonewalled various investigations”
WASHINGTON, D.C.—U.S. Sen. John Thune (R-S.D.), a member of the tax-writing Senate Finance Committee, which has jurisdiction over the IRS, issued the following statement after the Finance Committee released the findings of its bipartisan report on its investigation into the IRS’s treatment of organizations applying for tax-exempt status:
“I applaud Chairman Hatch and Ranking Member Wyden for conducting this bipartisan and in-depth investigation of the IRS’s behavior with respect to its treatment of certain conservative organizations that applied for tax-exempt status,” said Thune. “This report confirms what a lot of us already knew – the Obama IRS was grossly incompetent, it improperly targeted conservative groups for political reasons, and it stonewalled various investigations into reported misbehavior. Most importantly, this report confirms that the IRS let down the American people and lost what little trust and confidence taxpayers had left in the agency.”
Bipartisan findings of the report include (courtesy of the Senate Finance Committee):
- During the years 2010 to 2013, IRS management failed to provide effective control, guidance and direction over the processing of applications for tax-exempt status.
- Top IRS managers did not keep informed about the applications involving possible political advocacy and thereby forfeited the opportunity to provide the leadership that the IRS needed to respond to the legal and policy issues presented by these applications.
- Lois Lerner, who headed the Exempt Organizations Division, became aware of the Tea Party applications in early 2010, but failed to inform her superiors about their existence. While under Lerner’s leadership, the Exempt Organizations Division undertook no less than seven poorly planned and badly executed initiatives aimed at bringing the growing number of applications from Tea Party and other groups to decision. Every one of those initiatives ended in predictable failure and every failure resulted in months and years of delay for the organizations awaiting decisions from the IRS on their applications for tax-exempt status.
- The Committee also found that the workplace culture in the Exempt Organizations Division placed little emphasis or value on providing customer service.
o Few if any of the managers were concerned about the delays in processing the applications, delays that possibly harmed the organizations ability to function for their stated purposes.
- The Committee made a number of recommendations to address IRS management deficiencies as follows:
o The Hatch Act should be revised to designate all IRS, Treasury and Chief Counsel employees who handle exempt organization matters as “further restricted.” “Further restricted” employees are precluded from active participation in political management or partisan campaigns, even while off-duty.
o The IRS should track the age and cycle times of applications for tax-exempt status to detect backlogs early in the process and allow management to take steps to address those backlogs.
o The Exempt Organizations Division should track requests for assistance from both the Technical Branch and the Chief Counsel’s office to ensure the timely receipt of that assistance.
o A list of over-age applications should be sent to the Commissioner on a quarterly basis.
o Internal IRS guidance should require that employees reach a decision applications no later than 270 days after the IRS receives that application. Employees and managers who fail to comply with these standards should be disciplined.
o Minimum training standards should be established for all managers within the EO Division to ensure that they have adequate technical ability to perform their jobs.
Issuance of the report was delayed for more than a year after the IRS belatedly informed the Committee that it had not been able to recover a large number of potentially responsive documents that were lost when Lois Lerner’s hard drive crashed in 2011.
o By failing to locate and preserve records, making inaccurate assertions about the existence of backup data, and failing to disclose to Congress the fact that records were missing, the IRS impeded the Committee’s investigation. These actions had the effect of denying the Committee access to records that may have been relevant and, ultimately, delayed the investigation’s conclusion by more than one year.
A timeline can be found here.