On September 18, 2013, the House Ways and Means Subcommittee on Oversight held a hearing on the progress of reforms at the Internal Revenue Service in the wake of the IRS harassment scandal gripping the Agency, with Mr. Daniel Werfel, the Acting Commissioner of the IRS, testifying as the sole witness.
Mr. Werfel was cooperative and forthcoming for most of the hearing. However, as has been the case from the beginning, many questions surrounding the IRS scandal remain unanswered. The lack of progress in the investigation makes it hard to accept Mr. Werfel’s view that the IRS is well on its way to needed reform.
The majority of members present considered evidence of political motivation behind the actions of the IRS to be conclusive. Rep. Dave Camp, Chairman of the House Ways and Means Committee, cited a statistic that of the organizations reviewed for tax-exempt status, 83 percent were right-leaning. Of those who subsequently received a review, 94 percent were right-leaning, and of those who went on to receive an audit, 100 percent had a conservative political orientation. One Republican member of the Committee expressed disbelief that there could be any doubt of political motivation on behalf of the IRS: “how is it possible,” he directed to Mr. Werfel, “that you do not find political motivations” in this process? The Representative went on to pointedly suggest that there had been more political activity occurring at the IRS than in the organizations they were reviewing for such activity.
True or not, any political activity in the IRS is unacceptable, and the Agency’s years-long failure to treat groups applying for tax-exempt status equally could undoubtedly have affected the political landscape in recent election cycles.
In a moment of good news, Mr. Werfel informed the Subcommittee that the entire audit process surrounding the groups in question has been put on hold. He informed the Committee that the 60 cases, which represent the 100 percent referred for audits, have been sent back to Dallas and the audits placed on hold. However, when asked whether Lois Lerner intervened in the audit process Mr. Werfel said he was not sure, and would need to look at more emails. Nevertheless, he made a point to add that the emails he had seen from Ms. Lerner “raised questions.” While it is good to know Ms. Lerner’s e-mails have caught Mr. Werfel’s attention, it would be even better to see his investigation produce some answers to go with the questions it has raised. Ongoing uncertainty about how the targeting program began and how exactly it operates leaves groups applying for nonprofit status with little confidence they will be treated fairly by the Agency going forward.
While the audits against targeted groups are on hold, concern remains that new groups’ applications for nonprofit status are still at risk for harassment. Rep. Diane Black (R-Tenn.) cited an interview her staff conducted with an IRS employee in early August, long after Acting Commissioner Werfel’s order to cease and desist all targeting practices. The employee stated she was still under instructions to refer cases based on political orientation. The question asked, as quoted, was: “‘Currently if today a tea party case were to come before you, would you treat that tea party group as a political advocacy case, even if there was no evidence of political activity on the application?’ and,” Ms. Black said, “the answer was plain as day: ‘based on my current manager’s direction,’ yes.”
Mr. Werfel stated he had no knowledge this was the case and emphasized that such practices were communicated to managers to be unacceptable. At this point, a list of IRS actions that Mr. Werfel has claimed no knowledge of could likely fill several voluminous books. As the Representative added, “communication” of what is and is not acceptable procedure may not be sufficient. There must be consequences for wrongdoing, and we have not yet seen them.
The Acting Commissioner’s apparent good intentions have been on display every time he has testified before Congress, but his investigation has not followed through with the answers the public needs and is demanding. The IRS continues to employ people with major roles in the targeting scandal, and may in fact be continuing the targeting itself. Contrary to Mr. Werfel’s claims, the IRS has not been “moving aggressively” with “robust” reforms. It has been slow and cautious. That may be the right approach for tax audits, but the evenhanded defense of constitutional rights demands more (especially rights as important to democracy as free speech, assembly, and petition).
If anything, the actions of the IRS continue to prove that despite the Acting Commissioner’s good intentions, the Agency should never have had and will never have any business policing political speech.
