The staffers in the Cincinnati field office were making high-level decisions on how to evaluate the groups because a decade ago the IRS assigned all applications to that unit. The IRS also eliminated an automatic after-the-fact review process Washington used to conduct such determinations.
Marcus Owens, who oversaw tax-exempt groups at the IRS between 1990 and 1999, said that delegation “carries with it a risk” because the Cincinnati office “isn’t as plugged into what’s [politically] sensitive as Washington.”
Owens, now with the firm Caplin & Drysdale, said that before the agency’s most recent reorganization, it had a series of “tripwires in place” that could catch unfair targeting, including the fact that the IRS identified its criteria for special scrutiny in a public manual.
“There’s no longer that safety valve, and as a result, the IRS has been rolling the dice ever since,” said Owens, who worked at the agency for nearly a quarter-century and now represents some organizations seeking tax-exempt status.
The IRS came under withering attack from GOP lawmakers Sunday. Sen. Susan Collins of Maine, a moderate Republican, described the practice as “absolutely chilling” and called on President Obama to condemn the effort.
“This is truly outrageous,” she said on CNN’s “State of the Union,” adding that even though White House spokesman Jay Carney has said the matter deserves an investigation, “the president needs to make crystal clear that this is totally unacceptable in America.”
In March 2012, then-IRS Commissioner Douglas H. Shulman, who was appointed by President George W. Bush, told Congress that the agency was not targeting conservative groups. On Sunday, the agency declined to answer questions about whether senior officials asked IRS exempt organizations division chief Lois G. Lerner and her staff in Cincinnati about this heightened scrutiny before testifying it did not take place.
“There has to be accountability for the people who did it,” House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) said on NBC’s “Meet the Press,” adding: “And, quite frankly, up until a few days ago, there’s got to be accountability for people who were telling lies about it being done.”
The appendix of the inspector general’s report — which was requested by the House Oversight and Government Reform Committee and has yet to be publicly released — chronicles the extent to which the IRS’s exempt organizations division kept redefining what sort of “social welfare” groups it should single out for extra attention since the 2010 Supreme Court ruling Citizens United v. Federal Election Commission. That decision allowed corporations and labor unions to raise and spend unlimited sums on elections as well as register for tax-exempt status under Section 501(c)(4) of the tax code, as long as their “primary purpose” was not targeting electoral candidates.