House Republicans Seek Impeachment of IRS Commish

Two days ago the Justice Department formally closed its investigation of alleged targeting of conservative groups by the Internal Revenue Service. DOJ found that Lois Lerner and other top IRS managers were guilty of “mismanagement, poor judgment, and institutional inertia,” but had done nothing criminal. This scandal began in 2013 and has been a hot topic in tax professional circles and among anyone interested in government & politics. Over the course of these past two and a half years, the IRS has been investigated by TIGTA, the Justice Department, and even the FBI. Some IRS officials involved in the scandal have resigned under the pressure. Even so, the DOJ stated that there was no evidence that any IRS official obstructed justice or attempted to obstruct justice. Big win for the IRS.

But GOP lawmakers don’t want to put this scandal to rest until justice has been served. Their target is IRS Commissioner, John Koskinen, and they’re not interested in settling with contempt or obstruction charges; they want to impeach him. Rep. Jason Chaffetz (R-Utah) and 18 other republicans have initiated the seldom-used impeachment process against Commissioner John Koskinen, which will go through the House Judiciary Committee next. Those who support impeachment of Koskinen claim that he has violated the public trust by lying about the existence of emails, or deleting emails, or allowing emails to be deleted on his watch, or any combination of these things. The IRS, of course, insists that it has fully cooperated with any and all investigations, spending upwards of $20 million and 160,000 employee hours in the process.

Interesting footnote: pursuing impeachment against an agency official is rare. Back in 1876 Congress tried to impeach War Secretary, William Belknap, but he resigned before conclusion of the process. Belknap, known as a man of virtues and flaws, was secretary to President Grant, and an attorney by trade. He went back to that trade after it was discovered that he had been involved in bribes and in selling weapons to France.

Commissioner Koskinen Asked to Resign

IRS Commissioner, John Koskinen, has been on the job for only a couple years, but he was brought in at a very difficult time for the agency. He was appointed by Pres. Obama and given the task of cleaning things up at the IRS, particularly in regard to the scandal involving targeting of Tea Party groups. Now he has lawmakers calling for his resignation because of the way he has handled the debacle. I bet there are days he regrets accepting the assignment.

The most outspoken republicans insist that Koskinen lied about the missing emails. Jason Chaffetz (R-Utah) is on record saying that Koskinen was in possession of the emails, and then after they were subpoenaed, his agency destroyed them. Many now want him to resign, and if he doesn’t, they are threatening worse. They are throwing around words like “contempt,” “obstruction of justice,” and “impeachment.”

President Obama claims that there was “not even a smidgen of corruption” within the IRS, but everybody knows this isn’t true. He needs to be a little more careful with his words. The IRS is huge and people are imperfect, arrogant, and greedy. How can he say there isn’t a smidgen of corruption? He doesn’t know that. All that really means is he has had meetings with those that run the agency who say there’s no corruption, who have had meetings with high level management who say there’s no corruption, who have had meetings with lower level management, etc. There is no way any clear-thinking adult could swallow such a broad statement as that.

According to Chaffetz, there are still at least 5 open investigations into the targeting scandal, including that of TIGTA and the Department of Justice. I, for one, must admit that I am a little surprised that the news of this scandal hasn’t fizzled yet. I think it speaks to how passionate we are, as US citizens, about allegations of corruption within our government.

How to Get Fired if you Work for the IRS

As far as I know, an IRS employee can’t be fired just for leaving you on hold for 3 hours, or for giving you bad information that contradicts what the previous IRS employee told you, or for rejecting your Offer in Compromise (as long as procedures are followed). Of course, there could be additional actions and circumstances that might warrant termination, but generally speaking, these are not adequate grounds.

But according to rules established during the 1998 tax code reform, an IRS employee is supposed to be fired for the following actions unless the Commish determines that the employee should be given a second chance due to the presence of mitigating factors:

  • Purposely failing to obtain signatures required prior to certain asset seizures;
  • Lying under oath relevant to matters involving a taxpayer account;
  • destroying or falsifying evidence relevant to matters involving a taxpayer account;
  • Assault or battery of a taxpayer or fellow employee (that’s comforting, knowing that an IRS employee will likely get fired for cold-cocking a taxpayer) — but only if there is a conviction;
  • Purposely violating a provision in the IRC, Regs, IRM, or internal policies for the purpose of retaliating against or harassing a taxpayer or fellow employee;
  • Willful failure to file a tax return or underreporting income on a tax return…

There are others, but this list is getting tedious.  It’s funny to me that some of these prohibitions are related to actions against other IRS employees.  Don’t they get along over at the IRS, or what?

A House Committee has introduced a bill that would add another bullet point to this list above. H.R. 709, the Prevent Targeting at the IRS Act, would require the firing of IRS employees who act in their official capacity to target entities or individuals for personal or political reasons.  And presumably any offending employee would have to be fired regardless of how merciful the Commissioner wants to be.  Thank you Robert Wood for the info on H.R. 709.

In the meantime, I’ll keep an eye out for the Prevent Stupidity at the IRS Act.

IRS: The Raiders of Government Agencies

Usually when people are dressed in black surrounding a hole in a solemn ceremony, its a funeral.  But Tony Sparano, the interim head coach of the 0-4 Oakland Raiders, gathered the team for a special symbolic football burial this week.  He said that the football represented the first four games of the season.  The hope is that this little exercise will help the team to put it all behind them and move forward with a clean slate.

Maybe the IRS Commissioner, John Koskinen, should do something like this with his team.  I’m not sure what item(s) could be used to represent the past few years of missteps at the IRS, but to really drive the point home he would need to dig a hole the size of the Grand Canyon.  Actually, come to think of it, maybe they already did this exercise using Lois Lerner’s hard drive.  Nobody would ever consider that the IRS actually physically buried her emails in the ground.

Oakland Raiders vs. Internal Revenue Service.  Obviously the comparisons are unlimited given the fact that a Raider is actually a pirate, and a pirate is known for forcefully taking one’s hard-earned booty.  But I’ll leave this to your own imagination.

IRS Audits and Public Perception

We know there is at least some rhyme or reason to who gets selected for an IRS audit.  If we knew all the criteria, we could position ourselves to avoid audits 100% of the time, but, for obvious reasons, the IRS hasn’t been so generous when it comes to publishing their audit selection criteria or algorithms.  One thing that we can be sure of is the IRS flags tax returns that possess certain risk factors because, if they’re going to spend resources auditing a certain number of returns each year, it might as well be those that are more likely to contain errors or “problems.”

So far, so good.  That much makes sense.  The IRS flags cases that it considers to be good audit material.  But, based on a news story that broke today, maybe the IRS should also be flagging cases that should not be audited.

Of all the “do not audit” entities out there, shouldn’t Logan Clements, the producer of “Sick and Sicker: ObamaCare Canadian Style,” be near the top of the list?  I haven’t seen this film, but I’m gonna guess that Clements is not a big fan of Obama, and not a big fan of the Affordable Care Act.  And I have absolutely no idea about the integrity of his taxes, but it just doesn’t look right for the IRS to audit somebody like this.  Meanwhile, Clements is using the media attention from the audit to catapult his film into the spotlight quite nicely.  I understand the IRS faces a catch 22 here: if they audit this guy, it looks very fishy, but if they let him go, it sets a weird precedent and makes a whole segment of society (notable conservatives) exempt from audits.  In fact, I think a strong case can be made that public perception should not even enter the equation.  But the IRS better hope they find something seriously wrong with this guys taxes.  Or if it turns out to be a “no changes” kind of audit, they had better close it quickly and hope this story fades away quietly.

 

Lerner Emails not so Benign

There are just as many “crazies” in Sacramento as there are in Modesto, you just have to know where to find them.  And there are just as many Democrat crazies as there are Republicans.  After all, craziness knows no race, religion, or political preference.   Same with “—holes.”  In fact, that group may be more common than crazies.

Of course what I’m referring to here is the content of a couple emails that the now-famous Lois Lerner sent to a friend from her government issue Blackberry in 2012.  Her friend brought up the topic of right-wing radio shows and Lerner referred to the hosts and listeners of such shows as “crazies” and “—holes.”  The emails were released on Wednesday and Republican lawmakers see them as proof of Lerner’s disdain for conservatives and proof that she was targeting conservative groups’ tax-exempt status applications for extra scrutiny.

This new evidence clearly demonstrates why Ms. Lerner not only targeted conservatives, but denied such groups their rights to due process and equal protection under the law.

~ Rep. Dave Camp, chairman of the House Ways and Means Committee

Just to play the devil’s advocate, because that’s what I like to do, there are a number of ways to rebut the accusation that Lerner is biased against conservatives.  For example, maybe she loves conservatives but dislikes the “whacko wing” of the GOP, as her friend put it.  Maybe she specifically dislikes the small faction of radio whackos in the whacko wing of the GOP.  Maybe it’s only the radio wackos in the whacko wing who actually call in and talk apocalyptically about our beloved ‘Merca and the need to protect her borders, hunker down, buy ammo and food, and prepare for the end.  Maybe that’s who she thinks are the crazy assholes that don’t deserve tax-exempt status.  But even so, I think these emails suggest that she was most likely not being fair and impartial in the discharge of her official duties.

IRS Worker Suspended for Violation of Hatch Act

You know the statistic about what percentage of your life is spent sleeping?  Does it shock you just a little bit and make you want to sleep less?  That’s the way I feel when I think about what percentage of my life is spent talking (or waiting on hold) with the IRS.  I could probably figure it out, but I would rather remain ignorant of those details.  Well, even after having logged hundreds or thousands of hours with them, I can honestly say that I have never been asked to support any particular political candidate.

Recently an IRS call center employee was suspended for 100 days after the US Office of Special Counsel (OSC) determined that he/she had violated the Hatch Act by engaging in partisan political activity while on the clock.  This particular worker encouraged callers to vote for Obama on taxpayers’ dime.  This “encouragement” came in the form of some kind of chant based on the spelling of the employee’s last name.  I would love to know what this sounded like, but exact details were not given.  In fact, IF ANYBODY CAN PRODUCE AUDIO OF THE IRS EMPLOYEE WHO PROMOTED OBAMA’S CANDIDACY BY RECITING A CUTE LITTLE CHANT AT THE END OF EACH CALL, PLEASE CONTACT ME IMMEDIATELY.

There have been plenty of times when I thought that the IRS representative was getting a bit too chummy with me.  I really don’t mind that; I like to see that they are enjoying their job.  But I wouldn’t want to see them get in trouble.  The worst I’ve heard is when they start bashing the IRS and complaining about their job, their equipment, other IRS departments, their flawed internal processes.  That actually happens fairly regularly.  As far as I know there is nothing illegal about this kind of behavior, but I don’t imagine a supervisor would appreciate hearing it.

The real controversy in this story is that the OSC investigation actually resulted in the termination of a postal worker who violated the Hatch Act, whereas the IRS worker was only suspended.  There are significant differences in the facts of each case.  You be the judge and read about those differences here.

IRS Claims Lerner's Emails are Unrecoverable

The IRS scandal involving the disparate treatment by the IRS of certain tax exempt organizations (or their applications for tax exempt status) still has life.  The government committees responsible for investigating the IRS “targeting scandal,” as it has come to be known, wanted to see Lois Lerner’s emails, and last week the IRS responded that they are unable to recover her emails, apparently due to the fact that her computer crashed in 2011 and the IRS did not make a practice of preserving all emails on their servers.

Experts find it hard to believe that the IRS lost the files innocently and that they cannot be recovered.  From a legal standpoint, it is common knowledge that you don’t delete emails anytime there is a potential for litigation; in fact, you do whatever you can to preserve them.  From a tech standpoint, it is difficult to believe that the emails could have simply disappeared, even if the IRS was not conscientiously backing up data at the time.  The idea that files are never really 100% gone when you delete them has some truth to it.

From a layperson point of view, it appears that we’re witnessing some sort of cover-up.  It just doesn’t pass the “smell test.”  I feel like my 10-year-old would be able to sit down at Lerner’s computer and at least find something.  But if not, in this day and age, computer geeks are a dime a dozen.  Why can’t we just hire the world’s smartest forensic geek at the FBI or CIA and be done with this?

However, as much as the experts and the general public do not believe the emails were lost inadvertently, I have to admit that the facts as we know them do not sound too far fetched to me.  From the viewpoint of a tax attorney who deals with the IRS every day, it seems plausible that the IRS really would not save or properly back-up the emails.  There’s no way the IRS could possibly save everything.  And as for Lerner’s computer crashing, well that kind of thing happens constantly at IRS service centers all around the country.  Sometimes when I’m talking with an IRS representative on the phone, I try to imagine the computer their working on and, in my mind, it usually has a 3.5″ floppy disc drive and a behemoth monitor that is twice as deep as it is wide.

Nominee for IRS Commissioner Vows to Restore Public Trust

President Obama’s choice for IRS Commissioner is John Koskinen, a man known for his talent in turning around large corporations on the brink of collapse.  He is known for his skills in “restoring public trust” after major disasters.  Isn’t it a little funny that Koskinen is coming highly recommended for the post without any significant tax knowledge?  I don’t know if it is funny or just a sign of the times.

The nomination of John Koskinen shows where our priorities are with the IRS.  The IRS is in survival mode and they need a strong leader who will right the ship.  Sure, they are fine-tuning and making needed adjustments to their processes along the way (according to the near weekly TIGTA audit reports), and this makes it seem like they are focused on the important details of tax administration.  But don’t be fooled.  The nomination of Koskinen speaks volumes about how the president views this agency in crisis.  And the Senate too, since it looks like Mr. Koskinen has received bipartisan support at his confirmation hearing earlier today.

50 years ago it may have seemed odd to put somebody like Koskinen at the head of the IRS, but it was a different agency back then.  I do think they have the right guy for the job.  The IRS needs a proven leader and game-changer, not just another bean counter.  Koskinen went on the record saying, “public trust is the IRS’ most important and valuable asset,” and I think this is spot on.  If taxpayers can’t be certain the IRS will safeguard their private information and administer the tax laws fairly, then the concept of “voluntary compliance” will not work because people literally won’t pay.

Cindy Thomas Defends "Low-Level" IRS Employees in Sharp Email to Lois Lerner

At the height of the IRS Tea Party targeting scandal, high-level IRS employee Lois Lerner blamed low-level IRS employees in a Cincinnati office for flagging tax-exempt applications that contained words such as “tea party” or “patriot.”  Lerner had said that “line people . . . didn’t have the appropriate level of sensitivity about how this might appear to others.”

But one of these underlings in Cincinnati showed plenty of sensitivity in a May 10th email to Lerner that was made public this week by investigators on the House Ways and Means Committee.  Her name is Cindy Thomas, then-director of that office.  She took offense to Lerner’s labeling of her and others as “low level employees,” noticing right away that the Cincinnati tax-exempt division was being blamed in order to protect high-level IRS management.  Tax law and IRS news can be dull at times, but Thomas’ email reads like a juicy piece of gossip:

As you can imagine, employees and managers [in the Cincinnati tax-exempt division] are furious…How am I supposed to keep the low-level workers motivated when the public believes they are nothing more than low-level and now will have no respect for how they are working cases?  The attitude/morale of employees is at the lowest it has ever been…the previous 1½ years inside the determinations unit has been miserable enough because of the division’s workload and lack of help with strategic planning from Washington…Now our leader is publicly referring to employees who are the ones producing all of this work with fewer resources than ever as low-level workers!

This is obviously more than a defensive response from a manager with a bruised ego.  I respect the way she stood up for her employees.  And because I know first-hand the condition the IRS is in (and the condition it has been in for several months now), I don’t doubt anything she said.  This email, though emotionally-charged as it is, goes to the heart of the scandal in a way that is more raw and sincere than anything we have seen to date.