Don't Mess With Taxes

Sen. Charles Grassley (R-Iowa), former chairman of the Senate Finance Committee, wants to know why the country's top prosecutor decided against prosecuting an instance of "willful unauthorized access" to taxpayer information.

That case was one of eight since 2006 of unauthorized access or disclosure of tax records belonging to political donors or candidates. Keep that date in mind. I'll come back to it.

IRS tax-exempt review origins: Grassley's inquiry is the latest offshoot of the Internal Revenue Service's questionable method of reviewing applications for tax-exempt status.

On May 14, the Treasury Inspector General for Tax Administration (TIGTA) released its findings that the IRS had used inappropriate criteria to evaluate applications for 501(c)(4) tax-exempt status. The TIGTA report specifically cited Tea Party and other conservative groups as being placed on "be on the lookout," or BOLO lists.

Progressive groups also were BOLO targets, but the focus on Capitol Hill, particularly in the Republican-controlled House, was on the conservative angle.

And as soon as the TIGTA report was made public, there were rumblings that the IRS had also inappropriately targeted conservative groups for audit and/or leaked political donor lists that the agency had request in the review process.

The letter chain begins: It was those types of allegations that prompted Grassley, who now is ranking Republican on the Senate Judiciary Committee, to write Inspector General J. Russell George.

In his June 3 letter to George, Grassley says his office "has received specific allegations of inappropriate political targeting of individual candidates for office by other divisions within the IRS."

"We identified eight items involving allegations of unauthorized access or disclosure of tax records of political donors or candidates," George said in his July 3 reply to the Senator.

Half of the cases, writes George, were unsubstantiated.

Of the other four, TIGTA "determined that the unauthorized access or disclosure occurred, but was inadvertent and there was no evidence of willfulness."

That leaves one case since 2006 where the IRS watchdog agency found "evidence of a willful unauthorized access" to taxpayer records.

TIGTA presented its findings to the Department of Justice, wrote George, which declined to prosecute the case.

So now, Grassley wants to know why Justice made that call. He also wants to know who was involved in the decision.

Grassley acknowledges in his letter to U.S. Attorney General Eric Holder that eight cases in seven years "may not be indicative of wide spread targeting, any instance is cause for concern."

Political motivations of all: It's also a cause for political point making.

I agree with Grassley that taxpayer privacy and the right to expect equitable treatment from the country's tax collector is paramount.

So good for the senior Senator from Iowa for wanting to know if and if so, how often, such egregious and illegal acts occur.

And it's not out of bounds for Grassley to also want to know why this one case was determined not worthy of prosecution.

If it was politically motivated, we have a problem.

But we also have a problem when such inquiries are themselves politically motivated.

Just the implication that the IRS bases its activities on political information is damaging. And the first charge, even when countering evidence appears later, is the one that gets the most attention and sticks in the public mind.

It also reflects poorly on lawmakers, who are seen more as political opportunists than public servants.

Today's hyper-partisan mood on Capitol Hill is producing more charges and counter-charges than real evidence. And that's undermining public perception of not only the IRS, but also Congress.

Keep in mind while we're waiting for Holder reply, which Grassley has asked for by July 26, that just because the question is being asked, that isn't carte blanche for political speculation and innuendo.

And remember that date I mentioned at the start of this post.

Grassley gave TIGTA a starting point of 2006. George's reply doesn't specify the time frames of the eight improper taxpayer information disclosures his office found.

One, two or all eight of the improper disclosures could have occurred in during the presidency George W. Bush or that of Barack Obama or spread across both administrations.

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