Two More Disturbing IRS Revelations

The decision by a high ranking IRS official to in invoke the Fifth Amendment and refuse to testify to a Congressional hearing grabbed most of the headlines.  But that wasn’t the only shocker.

On May 10 Ms. Lois Lerner, Director of the IRS Exempt Organizations Division, gave an address to a meeting of the American Bar Association Tax Section’s Exempt Organizations Committee.  This looks like the a yawner meeting of accountants, but it turned out to be the fuse that ignited the IRS scandal.

In answering an audience question that we later learned she had planted, Ms Learner announced that the IRS had “centralized” a bunch tax exempt status applications for “efficiency and consistency.”  She explained that applicant groups were flagged based on their political and ideological positions.   She then disclosed that “in some cases the applications sat around for a while” without any action and that letters had been sent to these organizations asking questions that were “far too broad” and “weren’t really necessary.”  She blamed “our line people in Cincinnati,” a way of denying that she or anyone in senior management was responsible.

It turned out that Ms. Lerner knew the Treasury Department’s Inspector General had completed an audit of the matter and was about to publish the his findings which, as we reported here, are a lot more detailed and controversial than her remarks indicated.

Last week Ms. Lerner was the topic of most of the headlines following a Congressional hearing on the matter because she invoked her Fifth Amendment right to refuse to testify.

But there were two more bombshell disclosures at the House Oversight  and Government Reform Committee hearing that deserve just as much attention.  Committee staff had interviewed another IRS manager, Ms. Holly Paz, who reports directly to Ms. Lerner.  Committee Chair Issa read some of her remarks into the hearing record, producing the two stunning revelations:

  1. Ms. Paz told the interviewers that the IRS had conducted its own investigation more than a year before the IG report was published and reached the same conclusions as the IG, that the division she and Ms Lerner managed had targeted conservative groups, delaying their applications for years, and that these groups were harassed with intrusive and unnecessary and even illegal extra questions that were not asked of other applicants.  Yet apparently nothing changed after the internal investigation.
  2. Ms. Paz further said that she had been in the same room, listening to every interview of every IRS employee who was questioned during the course of the Inspector General’s audit.  Whatever employees said to the supposedly independent Inspector General was said in front of Ms. Paz, who reported directly to the top person in the division, Ms. Lerner.

Responding to committee members who expressed frustration at the continuing lack of information, J. Russell George, the Inspector General had testified that IRS employees – the folks Ms. Lerner called “our line people in Cincinnati – had been reticent, not very forthcoming with information, and unwilling to say who had set up the procedures that targeted those with conservative or small government leanings for delay and harassment.  Obviously, the intimidating presence of  Ms. Paz, representing the boss who ran the Division they worked for, was a contributor if not the main cause of the employees’ reticence. 

Unearthing the whole story will require far more aggressive investigative procedures.

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  1. […] Two More Disturbing IRS Revelations From reports, it appears that Lois Lerner, Director of the IRS Exempt Organizations Division, knew more, and therefore pleaded the Fifth. […]