IRS Tax Issue Developments


7/18/13: As the House Oversight and Government Reform Committee prepares for another hearing today to consider testimony related to the May Treasury Inspector General For Tax Administration’s (TIGTA) report on the handling of tax-exempt status requests, more evidence is coming out that confirms that IRS employees had no political motivation and did not single out only one political ideology for extra scrutiny.

A recent letter from the Oversight Committee’s Ranking Minority Member Elijah Cummings to Committee Chairman Darrel Issa provides additional evidence that IRS employees did not act with political motivation in reviewing requests for tax-exempt status.  This information confirms the findings of the May TIGTA report and the 30-day review conducted by Danny Werfel, the acting head of the IRS.

Congressman Cummings’ letter includes information from a TIGTA investigatory official who was tasked with reviewing 5,500 e-mails from Tax Exempt Organization employees.  Part of his statement is below:

“Review of these e-mails revealed that there was a lot of discussion between the employees on how to process the Tea Party and other political organization applications. There was a Be On the Lookout (BOLO) list specifically naming these groups; however, the e-mails indicated the organizations needed to be pulled because the IRS employees were not sure how to process them, not because they wanted to stall or hinder the applications.  There was no indication that pulling these selected applications was politically motivated.  The e-mail traffic indicated there were unclear processing directions and the group wanted to make sure they had guidance on processing the applications so they pulled them.  This is a very important nuance.”  

Despite the fact that this information was available before the release of the original TIGTA report on May 14, it was not included in that report.  Congressman Cummings has asked Chairman Issa to recall J. Russell George, the Treasury IG for Tax Administration, to find out why this information was not included in the original report or revealed by him in subsequent Oversight Committee hearings.

In addition to uncovering previously undisclosed information confirming that IRS employees did not act with political motivation, Congressman Cummings’ letter provides new evidence that not just conservative groups were selected for scrutiny of their tax-exempt status requests.  His letter includes evidence that groups with “progressive” and “occupy” in their names were also referred for review to ensure they met the tests of political activity set by the Tax Code.

There has been a lot of misinformation circulating about this issue. Every substantive review has found that there was no evidence of political motivation by IRS employees charged with reviewing applications for tax-exempt status.