Tuesday, March 11, 2014
Unlike the tax systems of many other nations, the American system has always relied heavily on voluntary compliance. We fill out our forms (or, these days, pay someone to do it), and the government keeps us honest via audits.
But since audit rates in most income ranges run as low as 1 percent (and most are concentrated in a few areas, such as the self-employed and small-business sectors, or returns with extraordinary deductions), the key remains the confidence taxpayers have in the system.
However, trust in the Internal Revenue Service has taken some real hits in the recent past – and it won’t be restored merely because the president of the United States says he has faith in the system.
As The Washington Times reported Jan. 30, “Last May, an audit from the Treasury inspector general for tax administration found the tax agency had been singling out for extra scrutiny tea party and conservative groups that applied for tax-exempt status.”
However, while President Obama said at the time he was “outraged” at those reports, he changed his tune this week.
In an interview with Fox News commentator Bill O’Reilly before the Super Bowl on Sunday, Obama said that tax officials made some “bone-headed” decisions about those groups (decisions that, curiously, prevented them from participating in the 2012 campaign).
But when he was asked if there was any “mass corruption” involved in that process, he replied, “Not even mass corruption – not even a smidgen of corruption.”
Well. As analyst Bryan Preston asked on the PJ Media website Monday, “Why did Lois Lerner take the Fifth? If there were no crimes committed, how could Lerner incriminate herself?”
Lerner was the IRS official in charge of the section responsible for making decisions about these applications. When called before Congress, she exercised her constitutional right not to incriminate herself, and then retired with all her benefits intact.
Afterward, we were first told that liberal groups as well as conservative ones came in for “extra” scrutiny, but it turned out that there were 15 times more conservative groups receiving that treatment than liberal ones (110 to seven).
And the Wall Street Journal recently reported that an ongoing investigation by the Justice Department and the FBI has so far not found any unlawful conduct on the part of the IRS – the apparent source for Obama’s comments to O’Reilly.
However, as Preston noted, the president appointed one of his campaign contributors, Barbara Bosserman, to oversee the investigation. That’s hardly likely to make its outcome impartial – as betrayed by the fact that investigators contacted only 10 of the 41 groups represented by one counsel in the case, and apparently few, if any, of the dozens of others.
Meanwhile, other sources pointed out:
• The IRS leaked confidential information from some of the groups to their political opponents on the left.
• Many applications were bumped up from the IRS to the Office of the White House Counsel, a political appointee, for review, according to sworn testimony from IRS career lawyer Carter Hull.
• Lerner, the program’s former supervisor, had tweeted that the conservative groups’ oversight was “very dangerous” and had also tried to move some applications from the agency’s Cincinnati office to her digs in Washington.
• And The Washington Free Beacon reported that a powerful Democrat, Sen. Charles Schumer of New York, advocated in a recent speech to a left-wing group that tea party organizations should continue to be specially targeted, saying, “the Obama administration should bypass Congress and institute new campaign finance rules through the IRS.”
Schumer is further quoted as saying: “It is clear that we will not pass anything legislatively as long as the House of Representatives is in Republican control, but there are many things that can be done administratively by the IRS and other government agencies – we must redouble those efforts immediately.”
And it’s happening. As The Washington Times reported in the story cited above, the IRS is rolling out new rules aimed specifically at the 501(c)(4) groups involved in the controversy, most of which are conservative.
But substantial Democratic contributors, such as unions, remain unregulated because of the Supreme Court’s Citizens United ruling.
“The proposed rules,” the paper said, “would create a category of banned ‘candidate-related political activity’ – including registration drives, voter guides and issue advocacy.”
Under current rules, such groups cannot support particular candidates, but they can spend up to 49 percent of their money on political issues.
This new ban, however, would not even allow them to discuss the issues they were formed to raise. That makes the rules a clear ban on constitutionally protected political speech.
And guess what? These new rules will apply to the 2014 campaign.
The more things in the Obama administration change, it seems, the more they remain the same.
M.D. Harmon, a retired journalist and military officer, is a freelance writer and speaker. He can be contacted at: