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IRS under siege

By Kay Bell · Bankrate.com
Thursday, May 16, 2013
Posted: 1 pm ET

So far this week, a federal watchdog office has blasted how the Internal Revenue Service dealt with conservative groups, the president and members of Congress are on a continual loop on cable news programs criticizing the agency, the Justice Department is looking into whether the IRS broke any criminal laws and the agency's acting chief has been fired.

Wait. There's more.

On Friday, May 17, the House tax-writing committee will air its concerns about the IRS' targeting of applications for tax-exempt status by Tea Party and other conservative organizations. The Senate Committee on Finance will take its shots at the IRS next week.

Even for the federal agency that everyone loves to hate, it's starting to look like it's piling on.

Of course, the IRS has brought a lot of this attention upon itself.

As the highly anticipated Treasury Inspector General for Tax Administration report notes, the agency made major mistakes in dealing with its employees who were tasked with reviewing whether organizations earned the 501(c)(4) designation for their, per tax rules, primarily social welfare, not political, efforts.

Out with the (acting) commissioner

Steven Miller had been serving as acting IRS commissioner since November 2012 when Commissioner Douglas Shulman's four-and-a-half-year term ended.

Was Miller a scapegoat? Sure.

Miller has not been directly connected with the bungled processing from 2010 to 2012 of tax-exemption applications. But during that time, Miller was Shulman's second in command.

And since President Barack Obama couldn't do anything to the already departed commissioner, the guy who took over temporarily was the next best thing in the line of accountability fire.

Now we're left to wonder who else at the IRS will go, either voluntarily or under pressure.

Lois Lerner, director of exempt organizations in the agency's Tax Exempt and Government Entities Division, brought the matter to public attention May 10 when apologized for the overzealous actions of what she termed "low-level" employees in the IRS Cincinnati office.

Should Lerner, whose department is responsible for the applications, be polishing her resume about now? Probably.

Parting remarks

Although Miller is out, in fine Washington, D.C., fashion he didn't have to immediately pack up his office. Miller emailed IRS employees that he would remain at his desk through early June, focusing on "an orderly transition" to the next IRS chief.

Part of that transition will be testifying before the Ways and Means committee.

Following the sacking of Miller, committee chairman Rep. Dave Camp, R-Mich., issued a statement that reconfirming the hearing and Miller's expected appearance.

"The committee and the American people deserve honest answers from Mr. Miller at our hearing this Friday," said Camp.

And based on Camp's statement, Miller should be prepared for tough questions.

"This resignation does nothing to change the culture of discrimination at the IRS," said Camp. "There are still far too many unanswered questions and until we know what truly happened, we cannot fully fix what is wrong."

Buckle up. It looks like it's going to be a long and bumpy summer for the IRS.

***

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You also can follow me on Twitter @taxtweet.

Veteran contributing editor Kay Bell is the author of the book "The Truth About Paying Fewer Taxes" and a co-author of the e-book "Future Millionaires' Guidebook."

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7 Comments
Louis Bantom
May 21, 2013 at 5:58 pm

Groups applying to the IRS for the 501(c)(4) status were asking for their information to be reviewed by virtue of their application. Otherwise how could the IRS make a determination of whether or not they qualified. Hence they were not targeted. The notion that this was some sinister political plot by the White House ala Nixon's enemies list is absurd wishful thinking to demonize hard working low paid federal workers. It's a sad commentary on life in America when the truth is buried and lies prevail in a witch hunt to score political points at the expense of the innocent.

Louis Bantom
May 21, 2013 at 4:04 pm

Culture of discrimination? I don't think so! There are nearly eighty thousand employees at the IRS who come to work every day doing the unappreciated job of accounting for 93% of the revenue needed to make this country work and keep the lights. These people operate with the upmost integrity. A few people doing the best they could with inadequate guidance and leadership messed up. Let he who is without sin cast the first stone. Rep. Dave Camp should be ashamed but he's just a biased politican adding to the disfunction and not solving real problems.

Richard Montoya
May 21, 2013 at 3:47 pm

LIES AND DECEPTION OPBAMA IS IN THE LOOP ON ALL THINGS.
HE ORDERED THE MISUSE OF IRS POWER FOR POLITICAL GAIN AND
KUDOS FROM HIS MASTERS IN THE BANKS. THIS UNCONSTITUTIONAL
PERVERTED PEDOPHILE EXCUSE OF A PRESIDENT IS HELL BENT ON
DESTROYING AMERICA ON BEHALF OF THE NEW WORLD ORDER. IMPEACH
PROSECUTE CONVICT EXECUTE FOR TREASON IN TIMES OF WAR.
THEN FOLLOW UP WITH THE BUSHES, CLINTONS,FORDS, CARTERS AND
THEIR TREASONOUS ADMINISTRATIONS. PUPPETS OF THE NEW WORLD
ORDER ALL. THEY ARE PORCINE VERMIN

Mike Young
May 21, 2013 at 12:58 pm

Yes, simplify. Start by eliminating the IRS. It is just a tool for overreaching administrations to manipulate the public and policy. With the current administration we see just how powerful a tool it can be when denying Americans rights. And speaking of tools...how bout that guy obama?

Don Olson
May 21, 2013 at 11:54 am

What a Joke!!!!

Its time for congress to rewrite the tax code and simplify. This is another case where organizations are riding the grey area in our tax code and blaming the IRS for trying to interpret a poorly written law. Instead of making all the noise maybe congress should spend its time eliminating all these deductions that exempt people from paying taxes.

Richard Fitzpatrick
May 21, 2013 at 7:43 am

Let's see, did not know about the IRS until it was public knowledge, did not know about Benghazi because he was asleep, knew about Fast and Furious but does not want to talk about it, did not know about the AP probe until it it hit the air waves. WTF does he know or care about. If he waits to see it in the papers this country is in serious trouble. Can anyone say impeachment for being asleep at the wheel?

Fed Up
May 21, 2013 at 6:12 am

"...the agency made major mistakes in dealing with its employees who were tasked with reviewing whether organizations earned the 501(c)(4) designation for their, per tax rules, primarily social welfare, not political, efforts."

NOT TRUE. The agency deliberately targeted those opposed to the President and his causes and leaked tax information about Republican donors to liberal political groups. Every employee in the agency, right down to the janitors should undergo a polygraph. Anyone with deliberate involvement should be fired, tried, convicted and imprisoned.

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