IRS Scandal: Stonewalled in Cincinnati

From: ABC News

Welcome to Cincinnati – Ground zero of the exploding IRS scandal.

Things started brewing earlier this month when Internal Revenue Service officials in Washington first admitted conservative groups were targeted for extra scrutiny by tax bureaucrats in Ohio's Queen City.

By May 14 – three days into the mess -- IRS staffers in Cincinnati were hard to find as reporters descended on the city. At the home of IRS staffer Elizabeth Hofacre, who was caught up in the blossoming controversy, mail below the slot in her front door was noticeably piling up when an ABC News reporter stopped by last week.

A few miles away, IRS analyst Mitchell Steele, answered the door of his home in a bath robe though the work day was just about to begin downtown. He seemed genuinely beaten down and told ABC News "this isn't fair to me."

Yet another staffer – Stephen Seok, one of the supervisors in the Determinations Unit at the heart of the scandal – would not answer his phone or front door even though he and his family could be seen coming and going. His windows were covered by taped-up sheets of white paper.


Back at the John Weld Peck Federal Building where ousted acting IRS Commissioner Steven Miller said "rogue" agents did their work, it was fairly calm for the first couple of days. There was a heightened security presence outside, some workers said, but nothing too extreme.

At the IRS office on the fourth floor, a woman who answered the buzzer referred reporters to officials in Washington, though they were not returning very many calls. That staffer also said she was not allowed to speak to anyone – a line that was repeated by agency personnel during the week.

IRS headquarters in Washington denied that a no-talk rule was official policy because, after all, agency staffers still have a constitutional right to talk to whomever they want.

"Our policy is that press inbounds (queries) are referred to the press office," a spokesman said. "But people have First Amendment rights, they are entitled to speak."

Asked whether employees were reminded of the official media policy this week, the spokesman said "no."

Not so, said IRS folks in Ohio.

One of them, who asked not be named, told ABC News that security guards did remind employees of the official policy not to talk with the press – a warning cemented by the punch line "or risk losing our jobs."

Even leaders of the local union that represents the IRS workers under fire took the admonition to heart, hanging up on reporters who wanted to ask questions about the scandal. One longtime IRS worker and union member called the response by the National Treasury Employees Union "dazzling."

On Thursday morning, after news that Miller was sacked, two ABC News journalists walked into the Peck Federal Building in Cincinnati looking for answers. The newsmen were screened at the door by security. They emptied their pockets as instructed, removed their belts, then went through the metal detectors.

We wanted to ask who about made the decisions in the unit and when the profiling started. And whether those decision makers been identified yet.

But the answers – like the people involved – remained elusive.

As we traveled the public hallways of the building – watched over by security cameras – an armed uniformed police officer with the Federal Protective Service followed us. We were looking for a particular office—of someone who would not want to be seen talking to reporters--but chose to bypass it because of our official babysitter.

Asked why we were being escorted in a public building, the officer identified himself as Insp. Mike Finkelstein and said he was only trying to make sure that the newsmen were not a "nuisance." He brushed aside further questions. The cop said a supervisor would call to explain.

One of the reporters wanted to know if the act of following the journalists was an effort intended to scare off any federal employee who might have considered speaking to the press. That's sure what it looked like; and, even if that wasn't the goal, it was the effect.

As of Friday night, no supervisor had called back.

After ABC News phoned and e-mailed the spokespeople in Washington repeatedly for more than 24 hours, a low-level staffer with Homeland Security finally responded. "After review by a supervisor, it was determined that the inspector acted according to proper security procedures and that no improper conduct occurred," the spokesman said.

Whether improper conduct occurred at the IRS—and who was responsible for targeting the president's enemies, as some members of Congress have argued – will be subject to much more review.

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Julian Bond: Targeting Tea Party 'Legitimate'

IRS Was Targeting Conservatives In 2010

From: ABC NEWS

The targeting of conservatives by the IRS started earlier and was more extensive than the IRS acknowledged last week, according to a draft IRS inspector general report obtained by ABC News.

As we reported on “Good Morning America” this morning, the IRS began targeting “Tea Party or similar organizations” in March 2010. That was when the Cincinnati-based IRS unit responsible for overseeing the applications for tax exempt status starting using the phrases “Tea Party,” “patriots” and “9/12″ to search for applications warranting greater scrutiny.

During this first phase, 10 Tea Party cases were identified. By April of 2010, 18 Tea Party organizations were targeted, including three that had already been approved for tax-exempt status.

By June 2011, the unit had flagged over 100 Tea Party-related applications and the criteria used to scrutinize organizations had grown considerably, flagging not just “Tea Party” or “Patriot” in group names, but also groups that were working on issues like “government debt,” “taxes” and even organizations making statements that “criticize how the country is being run.”

The report, done by the Inspector General for the IRS, also shows that senior IRS officials in Washington was aware of what was going on as early as August 4, 2011 when, according to the report, the IRS chief counsel held a meeting with the IRS’s Rulings and Agreements unit “so that everyone would have the latest information on the issue.”
 

Is the IRS Targeting Campaign Contributors?

From: The Wall Street Journal

We're starting to see a pattern here. Since the Supreme Court restored the First Amendment rights of businesses and unions in last year's Citizens United ruling, Democrats have been searching for a way to claw back control over political speech. The latest bureau to get the memo is the Internal Revenue Service, which may retroactively tax top donors to political advocacy groups.

In the crossroads, er, cross-hairs, are nonprofit groups that register under section 501(c)(4) of the tax code and spent millions on political advertising in the last election cycle. Big donations to those groups, the agency now says, should have been subject to gift taxes and may be owed retroactively. In a letter to one donor, the IRS noted that it "had received information that you donated cash to . . . an IRC Section 501(c)(4) organization . . . and your contribution should have been reported on your 2008 federal gift tax return."

The letters are especially odd since the purpose of the gift tax has traditionally been used in coordination with the estate tax, to prevent people from avoiding the tax by divesting their wealth before they die. Contributions to 501(c)(4)s aren't a routine death tax avoidance mechanism, and the contributions now under scrutiny are a pittance compared to overall gift tax revenues. So, hmmm, what could be the reason to start asserting the provision now, and only against a handful of high-profile political donors?