Collusion and Corruption at the IRS

They say there are only two sure things in life: death and taxes. Try as we might, it’s virtually impossible to escape the clutches of the Grim Reaper or the Tax Man. Both will get you eventually.

And as anyone who has been through an IRS audit or suffered a tax penalty can attest, the power that the Internal Revenue Service wields is enormous. As John Marshall famously concluded, “the power to tax is the power to destroy.” Indeed it is, and because of this it is imperative that the IRS conducts itself in a sterling manner. The American people should be able to trust that an entity with so much power is completely ethical, fair, and impartial. Anything less would be a grievous betrayal of the public trust and the Constitution.

Sadly, we’re discovering that the IRS has been less than scrupulous in its treatment of conservative non-profits in recent years. According to the admissions of Lois Lerner, head of the IRS division that oversees tax-exempt organizations, “about 75 groups with ‘tea party’ or ‘patriot’ in their names received extra IRS screening between 2010 and 2012.” Specifically, conservative groups applying for non-profit status in TN, TX, KY, and OH were subjected to intrusive questions about their donors and subject to long delays. In some cases, letters were sent to big donors to these groups suggesting that their contributions could be retroactively taxed under the gift tax.

All of this occurred in the run-up to the 2012 elections, but of course officials representing the Obama administration have flatly rejected the notion that politics are behind the IRS’ antics. Unfortunately, as is often the case, the Administration doesn’t have the facts on its side. From a piece in the Wall Street Journal:

“It’s important to understand that the timing of these requests, in the middle of the 2012 campaign, had the effect of stifling political activity. The targeted groups had tax-exempt status that allowed them to participate in certain kinds of political messaging. But any such group receiving IRS missives is immediately going to become cautious, lest it risk the arbitrary wrath of some tax official. The speech-squelching effects may have been especially important in Ohio, which was ground zero in the battle for the White House.

Ms. Lerner’s apology on Friday was unexpected but we’re doubtful that it came as a sudden bolt of conscience. The mea culpa lands ahead of an official report on the tax-fishing incidents by the Treasury Inspector General for Tax Administration. That report was requested by House Oversight Chairman Darrell Issa and Ohio Republican Representative Jim Jordan in June 2012, and the IG is expected to issue its findings soon.

The incident is particularly rich in light of recent efforts by campaign finance reformers to broaden the powers of the IRS and other non-expert agencies to regulate politics, especially nonprofits. The latest campaign finance disclosure bill sponsored by Senators Ron Wyden (D., Ore.) and Lisa Murkowski (R., Alaska), would force trade organizations and 527 and 501(c) groups to disclose their donors, institute real-time reporting requirements and impose draconian penalties for noncompliance.

The bill modifies the tax code to cover political nonprofits, so it also hands more power to regulate politics to the IRS. The bill is a terrible idea on its face, but after Ms. Lerner’s disclosure it looks positively dangerous.”

As the facts clearly indicate, the desired effect of the IRS’s targeting activities was to impose a chilling effect on conservative political speech in 2012 election battle. Unscrupulous bureaucrats engaged in a condemnable abuse of power in order to stifle the free exchange of ideas and thus protect their favored candidate.

Despite what Ms. Lerner would have the American people think, the admitted wrongdoing is much more than merely “regrettable.” It is extremely serious. A government that misuses its power in order to suppress the speech of one to the benefit of another cannot claim to be a protector of freedom. This is the behavior of dictatorships, not free societies. The principle at stake here is one that should transcend party. Today it might be conservatives in Uncle Sam’s crosshairs, but tomorrow it could just as easily be liberals, or Christians, or feminists or environmentalists – name your interest group. The potential for abuse is endless.

The public should be outraged. The ACLU should be in a lather. Congress should aggressively intervene in its oversight role and demand answers. Any abuse of power by one branch of government should be checked by the other branches. Any individuals involved should be fired immediately, and criminal charges should be filed. If the government fails to send a clear message that such abuses will not be tolerated, bureaucrats who feel insulated from accountability will continue to view government as a means to advance personal political views at the expense of the Constitution.

Given its many recent fumbles and the growing impression that the Administration believes itself to be above reproach, a vigorous and public response by the President would be welcomed on this matter. If Mr. Obama truly cherishes the Constitution and embraces America’s culture of free speech then he should be first in line demanding answers. His response, or lack thereof, will speak volumes.