Skip to comments.Transcript of Lois Lernerís Remarks at Tax Meeting Sparking IRS Controversy
Posted on 05/11/2013 11:52:39 AM PDT by Brad from Tennessee
Lois Lerners Response to Tea Party Question
In response to a question about the IRSs handling of Tea Party exemption applications, asked at the May 10 meeting of the Exempt Organizations Committee of the Tax Section of the American Bar Association, Lois Lerner, Director of the IRSs Exempt Organizations office, made the following response:
We get about 60,000 applications for tax exemption every year, most of them are 501(c)(3) organizations. But between 2010 and 2012 we started seeing a very big uptick in the number of 501(c)(4) applications we were receiving and many of these organizations applying more than doubled, about 1500 in 2010 and over 3400 in 2012. So we saw a big increase in these kind of applications, many of which indicated that they were going to be involved in advocacy work.
So our line people in Cincinnati who handled the applications did what we call centralization of these cases. They centralized work on these in one particular group. They do that for efficiency and consistency something we do whenever we see an uptick in a new kind of application or something we havent seen before. Folks might remember from back a few years ago we had credit counseling organizations and we centralized those cases. We had mortgage foreclosure cases and we centralized those cases. We do it for consistency So they went ahead and did that. How they do centralization is they have a list in their office that they give out to folks who are screening cases that says if it is one of these kind of cases and it cant be screened it needs to go to group X. So centralization was perfectly fine.
However, in these cases, the way they did the centralization was not so fine. Instead of referring to the cases as advocacy cases, they actually used case names on this list. They used names like Tea Party or Patriots and they selected cases simply because the applications had those names in the title. That was wrong, that was absolutely incorrect, insensitive, and inappropriate thats not how we go about selecting cases for further review. We dont select for review because they have a particular name.
The other thing that happened was they also, in some cases, cases sat around for a while. They also sent some letters out that were far too broad, asking questions of these organizations that werent really necessary for the type of application. In some cases you probably read that they asked for contributor names. Thats not appropriate, not usual, there are some very limited times when we might need that but in most of these cases where they were asked they didnt do it correctly and they didnt do it with a higher level of review. As I said, some of them sat around for too long.
What have we done to take care of this? Oh, let me back up. They didnt do this because of any political bias. They did it because they were working together. This was a streamlined way for them to refer to the cases. They didnt have the appropriate level of sensitivity about how this might appear to others and it was just wrong. So when we found out about it we did a couple of things. First, we said that list that goes around for centralizing cases any changes on that list have to be reviewed and approved at the Director of Rulings & Agreements level so line staff can no longer change or add to that list without calling us to look at it.
We also went back and looked at questions that had been sent out to folks because some of them were extensive and where the questions werent necessary we gave the organizations flexibility as to which questions they needed to answer and gave them more time to answer them. In some cases we told them to just ignore the letter we already sent and sent a new list of questions. In some cases we said we dont need those questions answered. We can deal with your application without responses to those questions. We also sorted the cases to try and figure out which cases needed a further look and which cases could be handled through almost a screening process. We might need a litle bit more information.
The problem in the (c)(4) area is that the kind of activity the organizations were doing is okay for (c)(4)s but it cant be their primary activity. So that weighing and balancing is a little different than when we have a (c)(3) that says you cant do any political activity. Thats a pretty easy question. So I guess my bottom line here is that we at the IRS should apologize for that, it was not intentional, and as soon as we found out what was going on, we took steps to make it better and I dont expect that to reoccur.
As long as we are on the topic of potential political activity, its a good time to remind all of you as you are looking at filing for 2012 there was a lot of political activity in organizations this past year and so well be looking at the 527(f) tax, as we see the 2012 990s coming in, so make sure that your clients are appropriately computing the 527(f) tax.
It bothers me...there was a standard procedure, and standard marks to make....and they simply went the other direction...inventing as they went along. That’s never a dependable method to handling business.
Whoever made the management decision....needs to either be disciplined (suspended for 90 days), or just let go. It would be curious if they consulted DC...asked for advice, and who gave it.
Employees of the IRS belong to the National Treasury Employees Union
And what are NTEU’s political leanings? Let’s look at 2012 donations to Federal Candidates
Total to Democrats: $391K
Total to Republicans: $23K
Total to Democrats: $157K
Total to Republicans: $1K
exempt organizations in IRS is kind of a dumping ground.
Maybe they did centralize it for the reasons stated. Giving them the reason of doubt, I would like to know what were the names used to select organizations for review: was it just Tea Party or Patriot. Were they any other’s like central committee or democrats for action or some such? My guess is NADA. This was aimed at the tea party as it was an anti tax group, and Patriots because they were viewed as anti Obama no matter what the IRS says now. Asking for a list of donors, why? You would do that AFTER deciding the organizations were tax scams, not to find out if they were such. No, this was a political operation, nothing else no matter how much obfuscation they put on it.
That needs to be spread everywhere.
someone needs to post the nbr of LIB 501s...I’ll bet conserv 501s pale in comparison
This is important data and would be relevant to whichever Congressional body investigates this scandal.
Mark Levin read a dozen or so of the special questions just for Tea Party groups. They did what they were designed to do, intimidate grass roots conservative groups from forming. That is abuse of power many times over.
One of the Articles of Impeachment ready for Richard Nixon was IRS abuse of political opponents.
It's possible they were working with one of the left-wing PACs or with the DNC. If Lois Lerner was willing to talk openly about this aberration there may be some lower-level personnel who didn't agree with the tactics and are willing to talk under oath.
Was this statement scrubbed twelve times before release?
My other thought on this - is it a coincidence that this IRS voter-suppression scheme occurred in Ohio, which has been considered the most important swing-state in the last 2 Presidential elections?
Then the records of those individuals should be checked for political contributions, and political activity.
If I'm wrong, I'll apologize...
...to JimRob, maybe.
If you were not targeting people or groups based on their political views, then how the heck did I receive tax penalty letters dated 4-5 days in the future ? On a date that happened to be my birthday. How can the IRS send out letters dated in the future ? Is that also part of your normal procedures ?
This is an incredible pile of BS. He is not apologizing for targeting conservative groups. He is saying they should not trigger based on certain names. What? So now the instructions will be to not target on specific names just target based on conservative sounding names and then find out everything you can on their members.
He needs to explain why they think they need all that information?
This explanation rings like the conclusion of an episode of Scooby Doo, where the ghosts weren’t really ghosts but malefactors cleverly shining a flashlight through a mop, the bookcase was really a secret passage to the garage, and the gang reveals that the scary zombie was, as the mask is ripped away, not a zombie at all but the chief of police.
FWIW, “IRS” was a term trending on Twitter yesterday. Worldwide. This IRS corruption is big news. Also, it was the first news story on the CBS radio news updates on the hour during rush hour last night...
The irs should send every organization that was targeted $50,000, then dissolve itself.
I think Lois Lerner talked - but they all knew. Maybe she’s one of the few honest people ....
I know I guy who’s been in senior leadership of a government union. When I talk to him, I usually work around to Chained CPI or Sequestration. For some reason, he doesn’t like talking about either of them.
Is Lois one of the slow learners?
An IRS Inspector General report is set to be released next week. Lois decided to confess ahead of that news in hopes of appearing like some kind of whistle-blower.
Many moons ago, when I was an Internal Revenue Agent with the IRS, EOEP (Exempt Organizations Employee Pensions) was where agents that couldn’t be fired were sent. It was the dumping grounds.