Political group audits: A sin needing more than IRS apology?

It’s been a tough week for the current administration in the White House. The State Department is under fire over what some are calling a cover-up over the consulate attack in Libya that left four Americans dead back in September. And the Internal Revenue Service is under the gun for apparently targeting some tax-exempt organizations with heavier-than-usual scrutiny.

It’s the latter that prompts this post as it speaks directly to matters of interest to attorneys in the Washington, D.C., area focused on tax law. The agency today openly acknowledged that the IRS screenings made of about 75 groups with names that included words such as “patriot” and “tea party” between 2010 and 2012 were “absolutely inappropriate.”

According to a lot of observers, the actions go beyond inappropriate. Critics are saying that they may have violated what has been called the “10 deadly sins” framed by the 1998 Internal Revenue Service Restructuring and Reform Act and spelled out in detail by the General Accountability Office. Commission of any of the sins is supposed to result in the firing of the employee guilty of such activity.

For example, number three makes it a fireable offense if an IRS official violates the rights of individuals that are protected by the Constitution, such as a tax-exempt organization.

Then there’s number six, which says thou shalt not use the tax code, Treasury Department rules, or IRS policies to retaliate or harass a taxpayer or a taxpayer representative.

The White House is distancing itself from the affair by noting that the IRS is an independent agency. The administration enjoys only two appointees there. The White House also is encouraging a further investigation of the situation.

Meanwhile, the top IRS official who oversees tax-exempt groups has apologized. She says that the activities were the work of a small group of employees in Ohio and that they were not motivated by political bias. Still, she doesn’t say if any punitive action is planned. 

Source: The Washington Post, “IRS targeting of political groups might be one of agency’s ‘sins’,” Joe Davidson, May 10, 2013; NPR.org, “IRS Apologizes For Singling Out Conservative Groups,” Mark Memmott, May 10, 2013

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