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Tuesday, May 21, 2013

Did The IRS Scandal Begin at the Top

“It will be of little avail to the people that the laws are made by men of their own choice if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood.” ― James Madison, Federalist No. 62, 1788

When James Madison issued the words quoted above in Federalist No. 62 he could have been speaking about the current U.S. Tax Code. In Federalist 62 Madison was addressing how the Senate should be constructed and empowered. He wrote the following pertaining to voluminous, complicated, and mutable laws:

“The internal effects of a mutable policy are still more calamitous. It poisons the blessing of liberty itself. It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man, who knows what the law is to-day, can guess what it will be to-morrow. Law is defined to be a rule of action; but how can that be a rule, which is little known, and less fixed?

Another effect of public instability is the unreasonable advantage it gives to the sagacious, the enterprising, and the moneyed few over the industrious and uniformed mass of the people. Every new regulation concerning commerce or revenue, or in any way affecting the value of the different species of property, presents a new harvest to those who watch the change, and can trace its consequences; a harvest, reared not by themselves, but by the toils and cares of the great body of their fellow-citizens. This is a state of things in which it may be said with some truth that laws are made for the FEW, not for the MANY.

In another point of view, great injury results from an unstable government. The want of confidence in the public councils damps every useful undertaking, the success and profit of which may depend on a continuance of existing arrangements. What prudent merchant will hazard his fortunes in any new branch of commerce when he knows not but that his plans may be rendered unlawful before they can be executed? What farmer or manufacturer will lay himself out for the encouragement given to any particular cultivation or establishment, when he can have no assurance that his preparatory labors and advances will not render him a victim to an inconstant government? In a word, no great improvement or laudable enterprise can go forward which requires the auspices of a steady system of national policy.”

Madison wrote these words 225 years ago in support of ratification of the newly adopted constitution. If he were alive today he would not only be appalled at the U.S. Tax Code, ObamaCare and the millions of regulations issuing forth from the various departments of executive branch. Although Congress has authorized these departments such as the IRS, Health and Human Services, the EPA, the Departments of Energy, Education, Agriculture, Treasury, and Interior the power to regulate and issue regulations they rarely read, or even are aware of the regulations and he impact they have on we the people.

This brings us to the current scandal brewing to a boil of the illegal actions of the IRS in targeting Tea Party and conservative organizations by slow-walking or denying their applications for a 501(c)(4) tax exemption.

The spin from Obama’s minions in the press and his spokespersons know and “strategist” is that this policy originated from some low-level drones working in the Cincinnati office of the IRS. This is pure unadulterated balderdash!

Was the White House involved in the IRS's targeting of conservatives? No investigation needed to answer that one. Of course it was.

President Obama and Company are in full deniability mode, noting that the IRS is an "independent" agency and that they knew nothing about its abuse. The media and Congress are sleuthing for some hint that Mr. Obama picked up the phone and sicced the tax dogs on his enemies.

Mr. Obama now professes shock and outrage that bureaucrats at the IRS did exactly what the president of the United States said was the right and honorable thing to do. "He put a target on our backs, and he's now going to blame the people who are shooting at us?" asks Idaho businessman and longtime Republican donor Frank VanderSloot.

Mr. VanderSloot is the Obama target who in 2011 made a sizable donation to a group supporting Mitt Romney. In April 2012, an Obama campaign website named and slurred eight Romney donors. It tarred Mr. VanderSloot as a "wealthy individual" with a "less-than-reputable record." Other donors were described as having been "on the wrong side of the law."

This was the Obama version of the phone call — put out to every government investigator (and liberal activist) in the land.

Twelve days later, a man working for a political opposition-research firm called an Idaho courthouse for Mr. VanderSloot's divorce records. In June, the IRS informed Mr. VanderSloot and his wife of an audit of two years of their taxes. In July, the Department of Labor informed him of an audit of the guest workers on his Idaho cattle ranch. In September, the IRS informed him of a second audit, of one of his businesses. Mr. VanderSloot, who had never been audited before, was subject to three in the four months after Mr. Obama teed him up for such scrutiny.

The last of these audits was only concluded in recent weeks. Not one resulted in a fine or penalty. But Mr. VanderSloot has been waiting more than 20 months for a sizable refund and estimates his legal bills are $80,000. That figure doesn't account for what the president's vilification has done to his business and reputation.

The Obama call for scrutiny wasn't a mistake; it was the president'sobama_angry1-620x413 strategy — one pursued throughout 2012. The way to limit Romney money was to intimidate donors from giving. Donate, and the president would at best tie you to Big Oil or Wall Street, at worst put your name in bold, and flag you as "less than reputable" to everyone who worked for him: the IRS, the SEC, the Justice Department. The president didn't need a telephone; he had a megaphone.

The same threat was made to conservative groups that might dare play in the election. As early as January 2010, Mr. Obama would, in his state of the union address, cast aspersions on the Supreme Court's Citizens United ruling, claiming that it "reversed a century of law to open the floodgates for special interests" (read conservative groups).

The president derided "tea baggers." Vice President Joe Biden, Senate Majority Leader Harry Reid, and Nancy Pelosi compared them to "terrorists." In more than a dozen speeches Mr. Obama raised the specter that these groups represented nefarious interests that were perverting elections. "Nobody knows who's paying for these ads," he warned. "We don't know where this money is coming from," he intoned.

In case the IRS missed his point, he raised the threat of illegality: "All around this country there are groups with harmless-sounding names like Americans for Prosperity, who are running millions of dollars of ads against Democratic candidates. And they don't have to say who exactly the Americans for Prosperity are. You don't know if it's a foreign-controlled corporation."

On the other hand “as applications from conservative groups sat in limbo, groups with obviously liberal names were approved in as little as nine months”, USA Today reported last Tuesday. These included Bus for Progress and Progress Florida.

According to the Daily Caller’s Charles C. Johnson, the Barack H. Obama Foundation — directed by Abongo Malik Obama, the president’s half-brother and best man at his wedding — filed IRS Form 990s for 2008 through 2010 in May 2011. It then scored 501(c)(3) tax-exempt status on June 26, 2011, retroactive to April 30, 2008. The reputedly Virginia-based foundation won this valuable designation without registering with state authorities. Evidently, IRS officials did not care that, as the Daily Caller stated, Abongo Obama “was accused of being a wife beater and seducing the newest of his twelve wives while she was a 17-year-old school girl.”

IRS also sent ProPublica, a liberal news organization, the confidential, unapproved nonprofit applications of nine conservative groups. ProPublica redacted financial information and then published six of these forms.

A pro-traditional-matrimony group called the National Organization for Marriage claims that the IRS gave copies of its tax documents to the pro-gay-marriage Human Rights Campaign. NOM says that HRC used those leaked documents to slam NOM and a donor identified therein: Mitt Romney.

IRS wants to hire 1,954 new agents to enforce 47 different provisions of ObamaCare. Combine these political leaks with the electronic medical records that doctors and insurers soon must render unto Obama’s bureaucrats. Imagine an exposé on conservative activists who use Viagra. Why not out a rising GOP star whose psychotherapist treats her exotic sex fantasies? Far-fetched? Not after this week. Indeed, 15 IRS agents are being sued in California court for allegedly swiping without a search warrant the medical records of some 10 million Americans in March 2011.

Short of directly asking federal agencies to investigate these groups, this is as close as it gets. Especially as top congressional Democrats, like Chuck Schumer and Max Baucus were putting in their own versions of phone calls, sending letters to the IRS that accused it of having "failed to address" the "problem" of groups that were "improperly engaged" in campaigns. Because guess who controls that "independent" agency's budget?

The IRS is easy to demonize, but it doesn't exist in a vacuum. It got its heading from a president, and his party, who did in fact send it orders — openly, for the world to see. In his Tuesday press grilling, no question agitated White House Press Secretary Jay Carney more than the one that got to the heart of the matter: Given the president's "animosity" toward Citizens United, might he have "appreciated or wanted the IRS to be looking and scrutinizing those." Mr. Carney cut off the reporter with "That's a preposterous assertion."

Preposterous because, according to Mr. Obama, he is "outraged" and "angry" that the IRS looked into the very groups and individuals that he spent years claiming were shady, undemocratic, and even law-breaking. After all, he expects the IRS to "operate with absolute integrity." Even when he does not.

So who are these low-level drones responsible for the illegal actions of the IRS?

Steven Miller — the acting head of the Internal Revenue Service while the scandal unfolded. He was fired from the post on Wednesday after an internal IRS report found that poor management, and not partisan politics, led to an "inappropriate" focus on conservative groups starting in 2010. The IRS has acknowledged Miller knew about the targeting of conservative groups in 2012 but did not disclose the practice. He was the former deputy IRS commissioner for services and enforcement and had been at the agency for more than 25 years.

At a House of Representatives hearing last Friday, Miller apologized for "foolish mistakes" made at the IRS and said they resulted from a heavy workload. He leaves the agency in June.

Douglas Shulman — IRS commissioner before Miller took over in the acting capacity in November 2012. A Democrat, he was appointed to the post under Republican President George W. Bush in 2008.

In March 2012, Shulman told lawmakers that IRS personnel applied no extra scrutiny to conservative groups, although the new report from the Treasury Inspector General for Tax Administration (TIGTA) said that Miller knew of the targeting as early as March 8, 2012.

Congressional leaders sent letters to Shulman inquiring about IRS targeting as early as June 2011. According to the inspector general, the IRS's Determinations Unit began targeting conservative groups in March or April of 2010.

Danny Werfel — the White House budget official selected by Obama to replace Miller as acting IRS chief on May 22.

The Obama administration's point man in overseeing the "sequestration" budget cuts, he will now tackle the IRS scandal.

Lois Lerner — director of the IRS's tax-exempt division who broke the news of the scandal on May 10 at an American Bar Association function when she publicly apologized for the discriminatory practices. The admission came just days after she testified in Congress but did not mention it. According to the inspector general, Lerner learned about the targeting as early as June 29, 2011.

Lawmakers have called for her removal from the IRS.

Miller on Friday acknowledged that the scandal-exposing question-and-answer session had been planned.

Joseph Grant — IRS acting commissioner of tax exempt/government entities division at the center of the scandal. On last Thursday he announced plans to retire on June 3 after joining the IRS in 2005. He took over the reins of the tax exempt division in late 2010 and Lerner worked under him.

Sarah Hall Ingram — Preceded Grant as head of the IRS's tax-exempt division when the targeting of conservative groups began. Since December 2010, she has headed up the IRS division handling Obama administration's healthcare reform and received $103,000 in bonuses.

William Wilkins — IRS chief counsel who is an Obama political appointee. He is the top legal adviser and takes the lead on all litigation involving the IRS. His office, although not necessarily Wilkins personally, knew of the targeting as early as August 2011, according to TIGTA. The IRS said Wilkins did not participate in the August 2011 meeting, which the agency said involved "staff attorneys several layers below Wilkins."

J. Russell George — Treasury Department inspector general for tax administration. Investigated the complaints against the IRS and issued the public report on targeting of conservative groups. The IRS is an arm of the Treasury Department and lawmakers at the hearings are scrutinizing George for not issuing warnings about the practice earlier.

IRS's Cincinnati field office employees — oversaw the reviews of tax-exempt applications. According to TIGTA, the Ohio unit set its own criteria for checking tax-exempt groups in the absence of clear guidance from more senior officials.

Republican lawmakers have named five workers they hope to bring in for questioning: Holly Paz, Washington-based director of rulings and agreements for the tax exempt division; Greg Muthert, a veteran Cincinnati office worker; Joseph Herr and Elizabeth Hofacre, who were cited by some Tea Party groups as handling their tax-exempt applications; and John Shafer, whom lawmakers described as "screening group manager."

A congressional aide said the five workers were chosen based on a timeline from the TIGTA report that listed the job roles involved in the activity. It was unclear whether these employees had any role in any wrongdoing.

President Barack Obama — has said he was not aware of the ongoing practice, calling it intolerable and inexcusable. His Press Secretary Jay Carney said the White House Counsel was notified of the IRS's targeting during the week of April 22.

Obama has appeared multiple times in public to condemn the IRS's actions and has promised to cooperate with congressional investigations and a Justice Department probe, but he has not demanded a special prosecutor look into the allegations.

Representative Dave Camp — Republican chairman of the House Ways and Means Committee that is investigating the matter. On June 3, 2011, he sent a letter to then-Commissioner Shulman, inquiring about IRS targeting of taxpayers who donated to conservative groups and audits of tax-exempt organizations. The IRS then halted reviews of any tax-exempt groups but never addressed targeting concerns.

Representative Darrell Issa — Republican chairman of the Oversight and Government Reform Committee also conducting an investigation. He is seeking interviews with five IRS employees to learn more about the tax-exempt reviews.

Senator Max Baucus — Democratic chairman of the Senate Finance Committee, who said his tax code revamp will examine rules for nonprofit group's political activities in hopes of preventing such scandals in the future.

It should be obvious to anyone who can read or watch the TV news that these individuals are not low-level drones working in the Queen City. I am sure this list will grow as the hearings

The Washington Post’s editorial board wrote that, “A bedrock principle of U.S. democracy is that the coercive powers of government are never used for partisan purposes.”

In her apology, Lois G. Lerner, IRS director of exempt organization, insisted that the extra scrutiny was not politically motivated. The narrow focus on partisanship as the primary point of controversy is dangerous. This is not first and foremost a partisan issue.

It doesn’t matter whom the IRS was targeting or what specific beliefs they held: the fact remains that for years the agency used its power to coerce, discourage and intimidate Americans from speaking out against what they viewed as bad policies, stifling the First Amendment right of every citizen to hold government accountable.

The president says he was not aware of the problem. If so, then the state of our freedom is far worse than any of us has imagined — the gray suits of the administrative state are in place and already taking over.

Pundits have compared the current scandal to Watergate, but this one, frankly, is worse.

When the abuses of Watergate – which included misuse of the IRS to launch audits against Nixon’s enemies — were discovered, they stopped and the perpetrators were brought to justice.

We don’t yet know just how high the knowledge of the IRS practice reached, but it’s already clear that a broad element of the agency — including those with the power to stop it — knew about this blatant violation of basic constitutional rights for years and did nothing to stop it.

Despite Ms. Lerner’s statements to the contrary, it’s clear the IRS has been using its power for years to discourage and intimidate Americans from participating in their right to hold government accountable.

This abuse of power and “unequal treatment under the law” is truly chilling, and must not be brushed away with apologies or toothless inspector-generals’ reports.

It demands a rigorous congressional investigation and severe punishment of the power-drunk bureaucrats who carried it out.

No government agency must be allowed to abuse its powers so blatantly and get away with it. The freedom Americans hold so dearly is at stake.

We must demand that government account for its actions.

Sen. Mike Lee (R-Utah) rightly captured the problem in a written statement when he said, “this shameful abuse of power transcend partisan differences. This should not be dismissed as just another conflict between left and right; it is a conflict between the federal government and the American people.”

Sen. Ted Cruz (R-Texas) noted, “What’s just as concerning is the expansive role this agency is charged to take in enforcing ObamaCare. An agency that has admitted to engaging in such corrupt, political activities has no place assessing or monitoring Americans’ personal health information.”

Finally, Sen. Rand Paul (R-Ky.) said, “The First Amendment cannot and should not be renegotiated depending on which party holds power… I am determined to hold the IRS accountable for these unjust acts.”

We, the people, must demand that congressional leaders and the Obama administration get to the bottom of this issue and remove not just the responsible parties but the threat to our freedoms.

The IRS’s actions are the stuff of Third World juntas, not the greatest constitutional republic in human history.

It is unacceptable for a government agency use its power to intimidate American citizens into silence. We must stop this abuse of government over the governed and ensure this never happens again to any segment of the American population, regardless of their political leanings.

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