IRS ´totally politicized´ by Obamacare, targeting of Tea Party applicants

Targeting conservative and Tea Party nonprofit applicants for harassment during the 2010 and 2012 campaigns was the most obvious, but far from the only illustration of how deeply President Obama politicized the daily operations of the IRS, according to a new report from a congressional oversight panel.

“Most American taxpayers find themselves at the mercy of the IRS — they must turn over sensitive information and even successful efforts to fight off erroneous agency actions can create life-altering turmoil,” said the report that will be made public Tuesday by the House Committee on Oversight and Government Reform.

“Trust in the IRS is essential — Americans want and expect an IRS that treats them fairly and does not discriminate based on factors like race, religion, political beliefs, or legal participation in our democracy. The facts surrounding wrongdoing by the IRS and the agency’s wholly inadequate response have broken the trust that Americans placed in the IRS as a neutral and unbiased enforcer of the tax code,” it said.

The 210-page report was prepared by the majority staff to update the public on the current status of an investigation that has continued for four years. The hope is that doing so will “improve the transparency and accountability of the nation’s tax administration,” the authors said.

Events and decisions that led to the targeting of more than 200 conservative and Tea Party groups, as well as a handful of liberal applicants, received the bulk of attention in the report, but the committee’s investigators also pointed to how what they described as the IRS’s “outsized role in implementing ObamaCare — a highly partisan law rammed through Congress without any meaningful bipartisan compromise — has fundamentally transformed the tax agency.”

The tax agency could add as many as 19,000 new agents to ensure the Obamacare program’s health insurance premium subsidies go only to qualified individuals.

The transformation has produced “an IRS responsive to the partisan policy objectives of the White House and an IRS leadership that coordinates with political appointees of the Obama Administration.”

The inability of tax agency officials “to keep politics out of objective decisions about interpretation of the tax code damaged its primary function: an apolitical tax collector that Americans can trust to treat them fairly.

“Not only did IRS employees allow politics to seep into their work from February 2010 to May 2012, but even after agency officials learned of misconduct, the response from senior agency officials was to manage the fallout rather than quickly expose and correct the misconduct,” the House investigators said.

The targeting activities were led by former IRS Director of Exempt Organizations Lois Lerner and included chronic delays and intrusive questioning of applicants about their political beliefs, as well as demands for donor lists and even the content of prayers offered during meetings.

The report also noted that IRS officials considered at other means of silencing the nonprofit groups, including imposing a gift tax on donations to them: “In late 2010 and early 2011, the IRS initiated audits of five individuals who had donated to 501(c)(4) organizations. Although the IRS denied any broader attempt to tax gifts to 501(c)(4) groups, internal documents suggest otherwise.”

Rep. Darrell Issa, R-Calif., has been chairman of the panel during its IRS probe, but he is ineligible to continue in that role as a result of term limits adopted by House Republicans. Issa will be succeeded in the 114th Congress by Rep. Jason Chaffetz, R-Utah, who has said he plans to continue the investigation.

The report was described in its concluding paragraph as an attempt to update the public on “what we know and what remains clouded in secrecy,” and acknowledged that “recent revelations that e-mails from officials like [Lerner] that the IRS once said were lost forever can now be recovered, and other changes, including the departure of Attorney General [Eric Holder] who refused to empanel an independent investigative team, offers renewed hope that more answers may come in the next Congress.”

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