Tax Analysts Blog

Rand Paul’s Claim of "Written Policy" Seems Like GOP Overreach

Posted on May 20, 2013

The beat keeps going in the IRS’s exempt organizations scandal. Outgoing acting Commissioner Steven Miller did little to satisfy Republican critics in his testimony before the House Ways and Means Committee on Friday (in fact, he probably made the scandal worse). Another round of hearings will start Wednesday, when the Senate Finance Committee will hear from Miller, former Commissioner Douglas Shulman, and other officials.

Incoming acting Commissioner Daniel Werfel will soon start a 30-day internal IRS investigation on the issue. At least one Republican senator thinks the hearings or investigations will find a smoking gun -- a memorandum directing IRS personnel to target critics of President Obama, proving a politically biased motive.

On CNN’s “State of the Union” over the weekend, Kentucky Republican Rand Paul said a written IRS policy was floating around that told agents to target “people who were opposed to the president.” Paul expressed confidence that the memorandum would be found and he said that Congress should know who wrote it and who approved it. Under questioning, the senator admitted he hadn’t seen the memo, but had heard about it from multiple sources, including the press.

Paul is not exactly a heavyweight on tax issues. His only significant action on tax policy as a senator has been to put a hold on all tax treaties because he objects to information sharing, which has become a cornerstone of international tax enforcement. His budget proposals have been so unrealistic as to be accurately described as fanciful. And, of course, like most libertarian-leaning conservatives, he is a virulent critic of the IRS. Paul is not really in tune with the politics or ideology of most GOP taxwriters, and many of his colleagues frequently distance themselves from his remarks.

But on this issue, Paul is probably expressing what most congressional Republicans are thinking (and hoping). Republicans seem determined to prove that Obama or his campaign is behind all the recent scandals. Of the three big controversies in the news right now (Benghazi, AP phone records, and the IRS), they probably think the targeting of Tea Party organizations is their best shot to finally bring to light the bias they think is being pushed by the executive branch under Obama. Even Senate Minority Leader Mitch McConnell, R-Ky., said, “There is a culture of intimidation throughout the administration.”

It is unlikely that Republicans will find Paul’s smoking gun, but the IRS scandal is almost certainly the result of political bias on some level. It is hard to believe that a group of officials would innocently pick terms like “Tea Party,” “patriot,” and “9/12” to single out organizations for additional scrutiny. It would be incredible to find such disinterested tone-deafness even in the most politically insulated of civil servants (and the IRS is far from insulated). But the chances that Obama or his campaign was involved in the Cincinnati office’s push to delay or withhold tax-exempt status from conservative organizations are remote -- so remote as to be unworthy of mention without some shred of proof.

Republicans, however, want to mention it. And Paul has come right out and said that he thinks a written policy will be found. If his hopes are disappointed, then these kinds of statements come across as conservative paranoia. And that kind of paranoia is exactly how the GOP could blow the political advantages that would seem likely to flow from the administration’s travails.

Read Comments (1)

Jack TownsendMay 29, 2013

You say: " It is hard to believe that a group of officials would innocently
pick terms like “Tea Party,” “patriot,” and “9/12” to single out organizations
for additional scrutiny. It would be incredible to find such disinterested
tone-deafness even in the most politically insulated of civil servants (and the
IRS is far from insulated)."

In a variation of what others have said, say you are an IRS auditor looking
501(c)(4) applications. You have four applications on your desk. You can only
audit two. The four are named: "Tea Party Political Action Group," "Liberal
Party Political Action Group," "Friends of Harris County Society for Prevention
of Cruelty to Animinals," and "Friends of Southampton Neighborhood, Harris
County." Now with that information alone and you have to decide which two to
audit, which ones would you audit.

Of course, in audit selection you would look at some factors beyond name, but I
suspect that any rational actor would consider the name as well. That is more
efficient. If they didn't do that, and particularly if there were a lot of
liberal sounding political names, the GOP would complain that the IRS was not
acting efficiently if it did not consider the names of the applicants.

The point I am making is that your basis for concluding that there was
"political bias at some level" does not seem to follow from the consideration
of name or from the other data of which I am aware.

So my question is whether you would be willing to articulate the basis for the
conclusory allegation of political bias at some level. Or is it just a hunch?
And, if a hunch, is the hunch itself politically biased?

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