IRS Targeted Political Groups, But DOJ Declines to File Criminal Charges

Published November 6, 2017

After examination of nine years of nonprofit organizations’ applications for tax-exempt status, an October report by the U.S. Treasury Inspector General for Tax Administration (TIGTA) concludes the Internal Revenue Service (IRS) improperly targeted political groups.

Beginning in 2010, employees of IRS’ Exempt Organizations (EO) division, under the supervision of Lois Lerner, singled out organizations for special examination based on a group’s name or assumed policy positions.

Lerner and her employees used a “be on the lookout” (BOLO) list to select tax-exempt applicants for increased scrutiny, requesting members’ financial records, speeches, and other documentation.

TIGTA determined the actions violated IRS policies. The IRS sweeps also included liberal groups whose names included the targeted words and phrases.

No Charges Filed

TIGTA’s report comes one month after the U.S. Department of Justice DOJ announced its decision not to file charges against Lerner for her role in the scandal.

On September 8, U.S. Department of Justice (DOJ) Assistant Attorney General Stephen Boyd, appointed by President Donald Trump in April, sent a letter to House Committee on Ways and Means Committee chairman Congressmen Kevin Brady (R-TX) and Tax Policy Subcomittee Peter Roskam (R-IL), announcing DOJ’s decision against pursuing charges against Lerner.

“Further, the Department concluded that the IRS’ mishandling of tax-exempt applications disproportionately impacted applicants affiliated with Tea Party groups and similar organizations,” Boyd wrote. “However, the Department reported that its investigation had not uncovered evidence of criminal intent by any IRS official. The Department therefore stated that it was closing the investigation and would not pursue criminal charges.”

Disagrees with DOJ

Roskam says he’s convinced Lerner broke at least one federal law.

“She likely violated section 1663 of the IRS code, which makes a law so that no one can have access to taxpayer information outside of the Internal Revenue Service,” Roskam said. “By using her own personal email, she put personal, confidential and private taxpayer information at risk.”

DOJ’s decision to let Lerner skate was surprising, Roskam says.

“Her conduct rose to a level that was so provocative, and the evidence we found was so overwhelming, that I was quite surprised by the attorney general’s response not to move forward.”

Political Concerns

There may be good reasons for DOJ’s decision to end the case, says Allen Mendenhall, associate dean and executive director of Faulkner University’s Blackstone & Burke Center for Law and Liberty.

“It’s common for prosecutors to drop an investigation if they determine they can’t get charges to stick,” Mendenhall said. “Maybe that’s what happened here, or maybe others working for [Attorney General Jeff] Sessions were concerned about the appearance of politicizing DOJ, in the same way they would be charging Lerner with politicizing the IRS.”

Prosecuting Lerner might have set a bad political precedent, Mendenhall says.

“For government agencies to maintain their legitimacy, they can’t be seen as arms of political parties that change as the leadership changes, so perhaps appearances factored into the decision,” Mendenhall said. “If the DOJ of the current administration were to prosecute the leaders of previous administration, then a precedent would be set for future administrations to prosecute the leaders of previous administrations whenever there’s a change in party leadership,”

Calls for More Oversight

Listening to voters’ concerns and more aggressive congressional oversight of the executive branch are two ways Congress can help prevent government abuse, Roskam says.

“We need to listen to constituents who bring concerns to our attention and use the oversight tools Congress has not only in oversight committees but also in appropriation committees,” Roskam said.

The IRS scandal may not matter much to the many people who have been conditioned to expect the federal government to be abusive, Mendenhall says.

“We’ve been conditioned and habituated to accept as normal these instances of government excess and abuse,” Mendenhall said. “At this point, many people are already skeptical of the IRS and do not like being taxed. It’s not clear to me, however, that this eroded credibility will affect the everyday thinking of ordinary citizens going about their quotidian routines.”