Disliked and Dangerous

Tax collectors never held a particularly popular place in society, and contemporary America is no exception. Of all the various federal agencies, the Internal Revenue Service is presumably the most disliked.

News that the IRS is now involved in a growing scandal that has already brought about the resignation of the agency’s acting chief has mesmerized the country and rattled the Obama administration at a time that it is already fending off mounting criticism about its handling of the Benghazi terror attack and the seizing of the phone records of Associated Press reporters.

The disclosure that White House chief of staff Denis McDonough and other senior advisers knew in late April that an impending report was likely to say the IRS had inappropriately targeted conservative groups, but declined to tell President Obama about it, is puzzling. The fact that the White House has shifted positions about who in the West Wing knew what and when about the IRS controversy is disturbing.

But the most troubling aspects of this scandal aren’t about the White House; they are about the IRS.

According to the IRS inspector general, in early 2010 IRS agents began paying special attention to tax-exempt applications from groups associated with the Tea Party or with certain words or phrases in their materials. The red-flag keywords came to include “Patriots,” “Take Back the Country” and “We the People.”

That August, agents were given an explicit “be on the lookout” directive for “various local organizations in the Tea Party movement” that are seeking tax-exempt status. Such organizations saw their applications languish except when they were hit with lots of questions, some of which the IRS wasn’t allowed to ask. Agents demanded the identity of the group’s members, times and locations of group activities, printouts of its website pages, content of speeches and the names and credentials of speakers at forums.

In June 2011, after the congressional elections, Lois G. Lerner, in charge of overseeing tax-exempt organizations, learned of the flagging and ordered the criteria to be changed right away, the inspector general said. The new guidance was more generic and stripped of any explicit partisan freight. But it did not last.

In January 2012, the screening was modified again, this time to watch for references to the Constitution or Bill of Rights, and for “political action-type organizations involved in limiting/expanding government.”

Finally, that May, such flagging ended.

While the inspector general says he has no evidence that the decision to target conservative groups was politically motivated, the fact that liberal-leaning groups didn’t get this type of scrutiny makes that claim highly unlikely.

But it isn’t only the fact that these groups were harassed and their applications unfairly delayed for years that is troubling. Senior IRS officials, for many months, did not disclose what they had learned about the actions of lower-level employees despite persistent questions from Republican lawmakers and fierce complaints from aggrieved organizations.

When it became apparent that the inspector general was about to go public with his blistering report on the IRS actions, the agency decided to try to preempt it by using a planted question at a recent conference, something that the now-ousted commissioner admitted Tuesday was a “an incredibly bad idea.”

The question that is on the minds of many Americans is: Who is watching the IRS?

While the agency is, of course, obligated to act in a nonpartisan way, it has a long and sordid history of acting otherwise.

The most infamous use of the IRS to hound political opponents occurred under the Nixon administration. There are indications, too, that President Franklin Roosevelt, or one of his aides, instructed the tax agency to go after the Bergson Group, a heroic organization dedicated solely to trying to save Jews during the Holocaust. The Bergson Group, which worked closely with Agudas Harabanim and Agudas Ha’admorim to organize the Rabbis’ March on Washington, was fiercely critical of Roosevelt’s inaction while millions were being massacred.

As we report in this issue (page A6), some are questioning whether the IRS is unfairly singling out Americans living in Israel for audits, and whether the IRS is biased against pro-Israel organizations operating in the United States.

As President Obama readily acknowledged last week, the Internal Revenue Service is one of the most powerful of all governmental agencies, and its long tentacles reach deep into the personal lives of almost every American. Therefore, any sort of misconduct or abuse of this power isn’t only deeply disturbing, it’s also very dangerous.

The revelations of the past few weeks have raised far too many red flags for the American people to rely on the say-so of an inspector general’s report, or even the limited abilities of congressional oversight committees. An outside, nonpartisan commission with full subpoena powers should be formed as soon as possible and be charged with conducting a top-to-bottom investigation of the practices and potential bias at the IRS.