Curious IRS timing

Coverage of the IRS targeting of conservative groups has not peaked.  It may have just started.  Coverage of my Leadership Institute’s 2011-2012 IRS audit spread yesterday to the lead editorial of the Wall Street Journal, the nation’s top-circulation newspaper.

The scandal of deliberate IRS targeting and interminable blocking of conservative groups’ applications for tax-exempt status has by no means run its course.  Congressional investigators are digging up more facts about this abusive practice, and there’s no way to predict how many more heads will fall in the executive branch.  Soon there may be public-spirited whistleblowers inside the executive branch willing to expose abusive conduct, including information about who ordered those abuses and who knew about those abuses but took no steps to stop the illegal practices.  Some guilty people may decide to confess and implicate others in order to reduce the criminal charges they know they are about to face.

Certainly the scandal about IRS targeting the applications of conservative groups is far from over, and I agree with the statements of a number of congressional leaders who hope that those in the IRS who behaved abusively lose their jobs and suffer applicable civil and criminal penalties.  But the original scandal about applications for tax-exempt status may widen now to include deliberate IRS persecution of existing conservative groups.

In 2011 and 2012, the IRS audited the Leadership Institute’s operations for 2008.  The audit cost LI more than $50,000 in legal fees and hundreds of man-hours of work by our staff.  We had to produce 23,430 pages of documentation to provide the information demanded in that audit.  As the Wall Street Journal editorial yesterday morning showed, the timing of the audit coincided with the period for which the IRS is now being investigated for stonewalling applications by new conservative groups for tax-exempt status.  And the WSJ editorial mentions that, during this period, the IRS office in Cincinnati asked an applicant, the Hawaii Tea Party, about its relations with LI.  The IRS Baltimore office was conducting the audit of LI – a sign of coordination between the IRS offices, not just a couple of rogue IRS agents in Cincinnati.

On July 26, 2012, the IRS informed LI that the audit was over and that our tax-exempt status would continue.

It’s one thing to try to kill nascent conservatives groups; it’s quite another and even more serious thing to persecute existing conservative groups which already have tax-exempt status.  No one at the IRS could be sure whether or not a brand new group might be effective, but it’s very easy for them to target existing groups which have already proven their effectiveness.

Large numbers of conservative groups are headed by good friends of mine, many of whom I have personally trained over the years or who are Leadership Institute graduates.  Virtually every significant conservative organization employs LI graduates.  As a result, many friends of mine who lead conservative non-profit groups have told me in confidence that they have suffered from long and costly IRS audits in recent years.

Many groups choose not to reveal publicly that the IRS is auditing them, for fear that an IRS audit will scare away some of their donors or that publicly complaining would cause the IRS to persecute their organizations even more.  But I know there’s a clear IRS practice of auditing conservative groups.

Ordinarily, information about abuses in IRS auditing practices is a deep, dark secret.  Targets chose to suffer in silence for the reasons I have mentioned, and those calling the shots at the IRS believed there was no chance at all that they would ever be held accountable for specially targeting conservative groups.  But yesterday’s Wall Street Journal lead editorial shows that public outrage about IRS misbehavior has risen to such a level that the Congress and the news media may look into the IRS targeting of existing conservative groups for audits.  That is a consummation greatly to be desired.  There’s another great can of worms to be opened, and the sooner, the better.

Maybe guilty people may actually be held accountable for abuses of power by the IRS.  That’s a rare and precious opportunity.

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