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IRS Scandal: More Than Meets the Eye

by Stephen Lendman Sunday, May. 19, 2013 at 4:03 AM


IRS Scandal Headlines: More Than Meets the Eye

by Stephen Lendman

More than targeting political enemies is involved. More on than below. The practice is longstanding. Republican and Democrat administrations use the IRS abusively.

During the Coolidge administration, Republican Senator James Couzens investigated the IRS' predecessor - the Bureau of Internal Revenue (BIR).

Treasury Secretary Andrew Mellon sued him. University of Virginia Law Professor George Yin called doing so the "greatest tax suit in the history of the world." At issue was political intrigue, backstabbing, and unintended consequences.

Franklin Roosevelt targeted William Randolph Hearst, Louisiana Governor Huey Long, and anti-administration critic/popular radio host Father John Coughlin. IRS officials investigated their finances.

In the 1940s and 1950s, hundreds of IRS employees were sacked and/or indicted for involvement in widespread corruption and bribery.

San Francisco officials colluded with organized crime. The St. Louis office head, a practicing attorney, represented a client on a tax issue. Doing so was a clear conflict of interest.

The Kennedy administration created an Ideological Organizations Audit Project. It did so to investigate conservative groups. It challenged their tax exempt status. Targets included the American Enterprise Institute and Christian Anti-Communist Crusade.

Nixon's Opponents List and Political Enemies Project became known as his Enemies List.

His administration created the Special Services Staff. It targeted political opponents and activists.

According to his White House Counsel John Dean, it "deal(t) with persons known to be active in their opposition to our Administration; stated a bit more bluntly - how we (could) use the available federal machinery to screw our political enemies."

In the 1990s, the Senate Finance Committee accused the IRS of "Gestapo-like" conduct. In 1998, the IRS Restructuring and Reform Act followed. At issue was curbing IRS enforcement powers. Little more than doing so nominally was achieved.

Shortly before the 1992 election, the Binghamton, NY Branch Ministries ran full-page newspaper ads. They claimed Clinton promoted policies "in rebellion to God's laws."

Doing so was illegal. Tax law prohibits 501c 3 organizations from engaging in electoral politics.

In 2001, statistical evidence showed voters in key electoral districts experience disproportionately fewer election year audits.

During the 2004 electoral campaign, a Pasadena, CA All Saints Church minister criticized Bush's attack, invasion and occupation of Iraq. An IRS investigation followed.

Obama's accused of using the IRS against conservative non-profit groups and others seeking tax-exempt status. Organizations with "tea party," "patriot," or "9/12" in their names were targeted.

So were others challenging Obamacare or federal electoral integrity. All government critics are vulnerable. It's true under Republican and Democrat administrations.

In 2012, former IRS commissioner Douglas Shulman lied. He told House members "there's absolutely no targeting. This is the kind of back and forth that happens to people."

The IRS now claims targeting conservative groups was "in no way due to any political or partisan rationale."

Some NGOs operate legitimately. Others don't. No more than 49% of a group's resources can be used for political purposes. Strict rules govern doing so.

In January 2013, Pro Publica discussed five conservative dark money groups. They were active during the 2012 election. The IRS illegally released information about their tax exempt status petitions. Doing so is a felony.

Former Obama Council of Economic Advisors chairman Austan Goolsbee divulged confidential Koch Industries tax information.

After not levying gift taxes for decades, the IRS told five donors to conservative NGO advocacy groups that past donations could be taxed. Doing so retroactively raises legitimate concerns.

FOIA-obtained information revealed that the IRS "has long taken the position that (it) can read your emails without a warrant." Doing so violates the Fourth Amendment.

Once Obamacare's fully implemented in 2014, the IRS will enforce 47 new tax provisions. Doing so promises to be nightmarish. Giving the agency power over healthcare is scandalous. Enormous harm is likely.

After the Supreme Court's 2010 Citizens United v. Federal Election Commission ruling, NGOs became more politically active. At the time, Ralph Nader denounced the decision, saying:

It "shreds the fabric of our already weakened democracy by allowing corporations to more completely dominate our corrupted electoral process."

"It is outrageous that corporations already attempt to influence or bribe our political candidates through their political action committees (PACs), which solicit employees and shareholders for donations."

"With this decision, corporations can now also draw on their corporate treasuries and pour vast amounts of corporate money, through independent expenditures, into the electoral swamp already flooded with corporate campaign PAC contribution dollars."

"This corporatist, anti-voter decision is so extreme that it should galvanize a grassroots effort to enact a Constitutional Amendment to once and for all end corporate personhood and curtail the corrosive impact of big money on politics."

"It is indeed time for a Constitutional amendment to prevent corporate campaign contributions from commercializing our elections and drowning out the civic and political voices and values of citizens and voters."

"It is way overdue to overthrow "King Corporation" and restore the sovereignty of "We the People"!

Dark money infests politics. America's political system is scandalous. Duopoly power corrupts it. Voters get the best democracy money can buy.

Corporations, NGO advocacy groups, and other powerful interest groups decide everything. Ordinary people have no say.

Today's scandal is bipartisan. For example, Senator Pat Toomey (R. PA) accused the IRS of tactics "akin to an enemies list." In his 2010 senatorial race, conservative NGOs contributed millions of dollars to his campaign.

The criminal class in Washington is bipartisan. Both sides of the isle share guilt. Big spenders flout the law repeatedly. Most do with impunity.

After Citizens United, the IRS struggled to determine which NGOs deserved "social welfare" status. The ruling lets corporations and unions raise and spent unlimited amounts of political money.

Other groups can accept undisclosed contributions as long as their "primary purpose" is apolitical.

House and Senate committees announced investigations. Capitol Hill is rife with corruption. Legislation if enacted won't improve things. It hasn't before. It won't now.

After Watergate, the White House was legally barred from contacting the IRS about tax matters. The agency can only release information about petitions for tax exempt status after they've been approved or denied.

On May 16, Public Citizen said the IRS controversy doesn't "diminish the need for fair and balanced disclosure of corporate political spending."

According to Public Citizen's Congress Watch division director Lisa Gilbert:

"The IRS controversy is about partisanship, not disclosure. Tying the IRS’s problems to the SEC rulemaking on corporate political spending is the height of political theater."

Public Citizen's Craig Holman added:

"The real issue with the IRS controversy is whether the agency was enforcing the tax code in a partisan, discriminatory manner, not whether electioneering nonprofit organizations should disclose the sources of their campaign funds."

The Center for Responsive Politics (CRP) headlined "The Real IRS Scandal," saying:

It's not about targeting tea party or other conservative groups. It's "the shocking lack of much scrutiny at all of the vast majority of politically active nonprofits that poured hundreds of millions of dollars into our elections over the last four years."

CRP executive director Sheila Krumholz and chairman Robert Weinberger explained, saying:

"The majority of the organizations that appear to be most politically active - from groups that run their own ads, like American Action Network and Americans for Prosperity, to the mysterious Center to Protect Patient Rights, which distributes money to other political groups - already have exempt status."

"There’s little evidence that the IRS is looking into these groups."

The current scandal will make it harder to do so. Groups targeted "received more scrutiny and suspicion than they deserved."

"(M)ore regrettable is the long-term damage to the credibility of the IRS as an impartial arbiter of whether organizations merit tax-exempt status."

"With the surge of dark money into politics, we need to ensure that the IRS is capable of rigorously enforcing the law in a nonpartisan, but also more effective, way."

"While we focus on the rickety raft of minor Tea Party groups targeted by the IRS, there is an entire fleet of big spenders that are operating with apparent impunity."

Obama faces a trifecta of scandals. Perhaps more will surface. Cover up followed last September's Benghazi killings. The official narrative doesn't wash.

Institutional spying targeted AP. Manufactured national security threats violate press freedom. Doing so is rife.

First Amendment rights are threatened. Dissent increasingly is criminalized. Obama's targeted more whistleblowers than all previous administrations combined. He's heading America toward full-blown tyranny.

The IRS scandal shows the dark side of electoral politics. America's system is scandalous. It mocks democracy. It lacks legitimacy.

Monied interests control things. Duopoly power rules. Wealth, power and privilege alone matter.

America's broken system is too corrupted to fix. Change requires tearing it down and starting over.

A good start entails excluding money from politics and creating a level playing field for all political parties and aspirants.

Stephen Lendman lives in Chicago. He can be reached at

His new book is titled "Banker Occupation: Waging Financial War on Humanity."

Visit his blog site at

Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network.

It airs Fridays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

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