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May 13, 2013
Editorial: A troubling failure of IRS integrity

TaxCheats.jpg

(May 13 -- By the Editorial Board)

Groups of a particular breed that have pumped in waves of secret cash polluting our politics have long demanded closer scrutiny.

But the way the Internal Revenue Service botched some initial reviews - targeting organizations with "tea party" or "patriot" in their names and others with a conservative bent - is going to make it extremely difficult to do the required vetting.

The apparent abuses will only feed the paranoia of some on the right that the government is out to get them - and could further poison the political climate on Capitol Hill. While some Democrats are calling for a full investigation, it's mostly Republicans who are on the warpath, vowing to hold hearings and conduct their own probes.

The IRS apologized on Friday, but saying sorry isn't enough. If this is as bad as it looks, heads ought to roll.

Because taxation is such a sweeping government power, the IRS must have complete integrity and be free of any partisan taint. President Barack Obama, after three long days of silence on the controversy, said Monday that the misdeeds, if they happened, would be "outrageous" and people responsible must be held "fully accountable." He has to follow through.

The list of officials who should accept responsibility and resign certainly goes as high as Lois G. Lerner, who is in charge of the IRS division that oversees tax-exempt groups. She claimed on Friday that she learned of the effort from news reports, but several media outlets report that a draft of an inspector general's audit due out this week says she was briefed in June 2011. By then, the unit was not only on the lookout for tea party groups, but also those focusing on government spending or the federal debt, or wanting to "make America a better place to live" or "criticize how the country is being run."

It appears that Lerner recognized the problem. Six days after the briefing, she took part in a conference call that broadened the lookout list from any ideological focus to any groups involved with lobbying or advocacy. In February 2012 when news articles began publicizing complaints from tea party groups that their tax-exempt applications were being unfairly delayed and scrutinized, Lerner ordered the unit to stop issuing requests for more information.

In the conference call with reporters Friday, she said "front-line" staffers did not have any partisan motives, but were only trying to find an efficient way to screen a flood of applications between 2010 and 2012 after the U.S. Supreme Court lifted limits on corporate and union spending in political campaigns. About 75 groups were selected for extra review.

These groups operate under section 501(c)(4) of the federal tax code as "social welfare" organizations that are supposed to be prohibited from political activity as their primary focus. They have mushroomed in recent years, supporting both Democratic and Republican candidates and causes.

Because their tax status allows them to collect unlimited amounts from individual and corporate donors who can stay anonymous, they are even more pernicious than "super PACs" that, like them, can raise and spend unlimited sums, but have to disclose donors.

The truth is that some of these groups do skirt or even flout the law and should be subject to extra scrutiny. If that needed crackdown is a casualty of this controversy, the outrage will only be compounded.

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