The IRS scandal’s evolving narrative

We saw yet another congressional hearing on the Internal Revenue Service scandal yesterday in which both sides continued to establish beachheads with their partisan narratives. The Democrats have circled around the president by demanding that each witness from the beleaguered agency concede there is not yet any direct link to the White House. The House majority has been able to prove that the guidance and decisions for the operation came from Washington.

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Of course, as Kim Strassel pointed out brilliantly in the Wall Street Journal a couple of months ago, when the president of the United States gives dozens of speeches naming some of the targeted groups — suggesting they might be operating illegally and possibly controlled by foreign corporations – it’s pretty clear to IRS managers that the administration disfavors these people.  After all, when the president’s campaign website publicly called out Romney contributors by name, one of them had three tax audits in four months.

So this is not an irrational place for congressional Democrats to make their stand.  First they offered their preferred defense through the mainstream media: that a couple of rogue agents in Cincinnati had become overzealous, but that the service remained nonpartisan and professional overall.  When this didn’t sell, and interest persisted thanks to the large numbers of organizations that had been thrust into limbo by the agency refusing to rule on their status, the defense morphed into something really curious.

As I understand it, Americans are now asked to believe one of two visions about the political profiling by the IRS.  The preferred version by congressional Democrats is that all political groups on the right and left were equally targeted, and that the training manual shows this to be the case.  It wasn’t just the “tea party,” “patriot,” and “9/12” groups. People are indeed abused because they are thought to have political leanings, but all of them equally. A corollary case asserts that the agency itself is not at all biased regarding center-right groups, just of people who are critical of the government.

Let’s first examine the theory that the IRS is an agency with no institutional political proclivities. Responding to a Freedom of Information Act request from Americans for Limited Government, the IRS revealed last month that 200 of its “employees” actually work full-time for the National Treasury Employees Union.  They use their government job titles, like “tax specialist” and “internal revenue agent,” but are paid by the taxpayers to work all day for a union that gave 94 percent of its contributions to Democrats in 2012, and 97 percent in 2010.  Forty-three of these union operatives are paid over $100,000 a year.  (And that’s just the full-time IRS employees.

The other, less-popular theory for how this all just happened was articulated by one of the Republican members of the House Oversight and Government Reform committee hearing yesterday: that the IRS is “too poorly managed to be capable of concocting a scheme this sophisticated.”

Whatever, as the kids say. There is pretty good evidence from the now-legendary Cincinnati IRS outpost in the gun-and-bible belt that the abuse runs far deeper than what has been disclosed so far in the congressional hearings.  In my area, the questionnaires were so targeted, invasive and intimidating that one young man who helped organize a Cincinnati tea party group came to find out that members of other scrutinized groups were routinely asked whether they had any association with him. Considering the national obsession with privacy, this is remarkably aggressive.

The most interesting story yet, which I imagine will be more public before long, is the curious tale of a group that wanted to do a get-together of patriots in Southwest Ohio.  They decided that they would probably not be worried about profitability, so they ultimately decided to register as a corporation and not to apply for tax-exempt status.  When they filed their tax return, the IRS rejected it and told them they must file as a 527 political organization, even though the government had no information about the organization’s purpose whatsoever.  All the IRS had was the name – We the People Convention, Inc.

This tax return and exchange of letters had nothing to do with the tax-exempt section of the IRS, its “test cases” or anything else that was the subject of yesterday’s hearing.  This seems to indicate that the entire agency is on the lookout for anything that might be an organization troubled by what’s going on in Washington.  It doesn’t strain the imagination to consider the possibility that huge chunks of the federal government are doing what they can to frustrate and bully people that might not be in sympathy with the current federal management.

I think this investigation is far from over, and might provide some fresh insight to the American people about both the dark side of government expansion into our lives, and the fallacy of assuming even–handed treatment on political matters from government agencies that have partisan loyalties in their DNA.

Alan Smith is a writer for R Street. Click here to see more.

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