In the wake of revelations Internal Revenue Service (IRS) agents unfairly targeted certain non-profit organizations for enhanced compliance scrutiny, the U.S. Government Accountability Office (GAO) has released a new report detailing IRS’ failure to enact safeguards preventing future instances of unequal scrutiny.
Beginning in 2010, employees of IRS’ Exempt Organizations division, under the supervision of division Director Lois Lerner, violated IRS policies by singling out organizations for special examination based on a group’s name or policy positions with the aim of slowing or preventing the ability of conservative organizations to receive tax-exempt donations in the run-up to the 2012 elections.
Despite prior GAO documentation of IRS internal policy violations, IRS policies still do little to prevent unfairness in the agency’s operations.
‘We Are Watching Them’
Rep. Peter Roskam (R-IL), chairman of the U.S. House Ways and Means Subcommittee on Oversight, says lawmakers must continue to pressure IRS to change its ways.
“It’s an old IRS ploy where they come in and say, ‘We agree with the findings, and we agree to make these changes,’ but then they never […] make the changes,” Roskam said. “So, we are going to continue to do the oversight necessary to keep this in the minds of the American public, and to make sure the IRS knows we are watching them.”
Roskam says Lerner, who resigned with a full federal pension after refusing to testify before Congress about her division’s actions, may yet be prosecuted for her role in the scandal.
“It’s obvious that this administration has no intention of pursuing Lois Lerner, and that’s very unfortunate,” Roskam said. “However, the statute of limitations does not lapse on her activities until well into the next administration. So if there is a different president and a different Justice Department, they may choose to pursue Lois Lerner.”
Follow the Money
Bruce Yandle, dean emeritus of Clemson University’s College of Business and Behavioral Science, says public choice theory explains IRS’ failure to correct its policies.
“Basically, public choice theory states that elements of political behavior are predictable when viewed through the lens of economics,” Yandle said. “The old adage ‘Keep your eye on the money—where it comes from, and where it goes,’ will help you understand the different actions that take place politically.”
‘The Behavior Is the Same’
Yandle says government agencies pursue their own preservation, regardless of politics.
“That makes it all the more interesting, particularly from a public choice standpoint, because the findings say it doesn’t matter whether they are Republicans or Democrats,” Yandle said. “The behavior is the same.”
Yandle says government agencies can be expected to protect those it perceives as a friend and attack those it considers to be an enemy.
“A Federal Trade Commission investigation of antitrust complaints found, systematically, that the FTC was less likely to bring action against a firm located in a district or state of the chairman of their oversight committee,” Yandle said. “In 1999, a study was done on political influences in the IRS by examining rates at which the IRS engages in audits. Examining the data during the [President Bill] Clinton period, the investigators found, systematically, that the IRS frequently had audits in those places where people did not behave well toward Bill Clinton.”
Tony Corvo ([email protected]) writes from Beavercreek, Ohio.
Jim F. Couch, et al., “Political Influence and the Internal Revenue Service,” Cato Institute: https://heartland.org/policy-documents/political-influence-and-internal-revenue-service/