Politics

BOMBSHELL REPORT: IRS Targeted ‘Icky’ Conservative Groups

Top IRS officials specifically targeted tea party groups and misled the public about its secret political targeting program led by ex-official Lois Lerner, according to a bombshell new congressional report.

The Daily Caller has obtained an advance copy of a House Oversight and Government Reform Committee report set to be released Tuesday morning that definitively proves malicious intent by the IRS to improperly block conservative groups that an IRS adviser deemed “icky.” (That’s right. “Icky.”)

“The Committee has identified eight senior leaders who were in a position to prevent or to stop the IRS’s targeting of conservative applicants,” the Oversight report states. “Each of these leaders could have and should have done more to prevent the IRS’s targeting of conservative tax-exempt applicants.”

Here are six major takeaways from the report:

1. The IRS admitted that the front office was “spinning” about the targeting rumors as early as 2012, after IRS commissioner Douglas Shulman denied the tea party targeting to Congress.

“This is what the front office and [IRS Chief of Communications and Liaison] Frank [Keith] are spinning about now,” an IRS legislative affairs office employee wrote in an email to co-workers, referring to a news article on Shulman’s dishonest testimony before the House Ways and Means Committee, in which he denied rumors of improper targeting.

2. Then-IRS commissioner Steven T. Miller almost broke down and told the truth about the tea party targeting at a July 2012 hearing, but Lerner’s sidekick Nikole Flax told him not to.

“I am beginning to wonder whether I should do [Chairman] Boustany[’s hearing] and affirmatively use it to put a stake in politics and c4,” Miller wrote in an email to Flax.

Flax replied, “[I]f the hearing is as generic as I recall, seems like you are too senior.  Would be silly to think the c4 issues won’t come up – but I think Sarah [Hall Ingram] could handle it fine as well.”

3. The IRS definitely treated tea party applications by a different standard than applications from other (c)(4) groups.

“Normal (c)(4) cases we must develop the concept of social welfare, such as the community newspapers, or the poor, that types,” Lerner underling Stephen Seok said in testimony published in the report. “These [Tea Party] organizations mostly concentrate on their activities on the limiting government, limiting government role, or reducing government size, or paying less tax.  I think it[‘]s different from the other social welfare organizations which are (c)(4).”

4. Lois Lerner expressed her frustration about having to potentially approve a lot of groups, and her colleagues in the agency assured her that she wouldn’t have to.

“Lois [Lerner] would like to discuss our planned approach for dealing with these cases. We suspect we will have to approve the majority of the c4 applications,” IRS official Holly Paz wrote to colleagues.

IRS official Don Spellman replied, “This line in particular stood out: ‘We suspect we will have to approve the majority of c4 applications.’ That’s an interesting posture.”

Deputy Division Counsel Janine Cook replied, “[G]uess they are thinking they’ll have suspicions about reality but the paper/reps will pass muster.”

5. So the IRS reached out to outside advisers to help come up with ways to deny tax-exempt status to “icky” organizations.

“It appears that the org is funneling money to other orgs for political purposes,” a Cincinnati-based IRS agent working under Lois Lerner wrote to tax law specialist Hilary Goehausen in April 2013. “However, I’m not sure we can deny them because, technically, I don’t know that I can deny them simply for donating to another 501(c)(4). . . .  Any thoughts or feedback would be greatly appreciated.”

“I think there may be a number of ways to deny them,” Goehausen replied. “Let me talk to Sharon [Light] tomorrow about it and get some ideas from her as well. . . .This sounds like a bad org. :/ . . .  This org gives me an icky feeling.”

6. A May 2011 email from a lawyer in the IRS chief counsel’s office made clear that the agency sought to use a new “gift tax” to target donors to nonprofit political groups.

The lawyer wrote that the “plan is to elevate the issue of asserting gift tax on donors to 501(c)(4) organizations to the Chief Counsel and the Commissioner.”

Follow Patrick on Twitter