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A Brief History of the IRS Scandal

The IRS scandal – in which a politicized Internal Revenue Service has become an arm of the Democrat party and an instrument of political repression used by liberals against conservatives – should serve as a warning to every politically-aware American citizen, regardless of party affiliation. Unique among governmental departments for its power and reach into the lives of Americans, the IRS has an especially solemn duty to operate ethically. The political drama unfolding before us is therefore particularly disturbing, for it shows an agency out of control, oblivious to the damage it's doing to the rule of law upon which a functioning republic depends.

The following timeline is excerpted from a more comprehensive one published at DiscoverTheNetworks.org. We are indebted to them and urge you to pay them a visit – it's worth your time.

7/14/14
irs
April Sands
The Daily Caller reports that the Federal Election Commission has recycled the computer hard drive of April Sands – an African American woman and a former co-worker of Lois Lerner's – hindering an investigation into Sands' partisan political activities. The report adds:
Sands resigned from the Federal Election Commission in April [2014] after she admitted to violating the Hatch Act, which bars executive branch employees from engaging in partisan political activities on federal time and at federal facilities.

The twist is that Sands also worked under Lois Lerner when the ex- IRS agent — who is currently embroiled in a scandal over the targeting of conservative political groups — worked at the FEC's enforcement division.

In a letter to FEC chairman Lee Goodman, Oversight chairman Darrell Issa and committee member Jim Jordan laid out Sands' partisan activities and asked for records pertaining to the recycling of her hard drive and of the agency's records retention policies.

Sands took part in a heavily partisan online webcam discussion from FEC offices and also operated a Twitter account with the handle @ReignOfApril which were sent during Sands' normal working hours.

One of Sands' tweets, from June 4, 2012 read "I just don't understand how anyone but straight white men can vote Republican. What kind of delusional rhetorical does one use?" ... "Dear every single Republican ever, When will U learn that Barack Hussein Obama is simply smarter than U? Stand down, Signed #Obama2012 #p2," Sands wrote on May 1, 2012. In a message from Aug. 25, 2012, Sands called Republicans her "enemy." In others, Sands issued fundraising pleas on behalf of Obama. "Our #POTUS's birthday is August 4. He'll be 51. I'm donating $51 to give him the best birthday present ever: a second term," she wrote on July 18, 2012. "The bias in these messages is striking, especially for an attorney charged with the responsibility to enforce federal election laws fairly and dispassionately," read the Oversight letter to Goodman, an Obama appointee.

The FEC's Office of Inspector General [OIG] sought to conduct a criminal investigation into Sands' activities but were stymied when they found that the agency had recycled her computer hard drive.

"Therefore the OIG was unable to show that Ms. Sands' solicitations and political activity were done from an FEC computer," reads the letter.

Because of this, the U.S. attorney's office for the District of Columbia declined criminal prosecution.

"The FEC's failure to retain Ms. Sands' hard drive prevented the FEC OIG from fully pursuing appropriate criminal sanctions for Ms. Sands' admitted violation of federal law," wrote Issa and Jordan.

"Like the IRS's destruction of Lois Lerner's hard drive, the FEC's recycling of Ms. Sands' hard drive may have also destroyed material responsive to Freedom of Information Act and congressional oversight requests," the letter continued. (Source)

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Lois Lerner Colleague's Emails Missing Too
House Oversight Committee Letter
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6/25/14

Under a federal court order, the IRS pays a $50,000 settlement to the National Organization for Marriage (NOM) – a group opposed to same-sex marriage – after having admitted that it was at fault for the publication of the names and addresses of NOM donors who had been identified on the organization's tax returns; their personal information was supposed to be confidential.

Breitbart.com reports:
"The case began when the pro-marriage group sued the IRS in 2013 because a 2008 form was leaked, and then the Human Rights Campaign, which advocates gay rights, published the information in 2012 [so that gay rights activists could target the donors of the organization for harassment]... (Source)
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Court Finds IRS Guilty: IRS Owes NOM $50K
An Intellectually-Honest Media Would Ask This Question
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6/20/14

In an angry exchange with IRS Commissioner John Koskinen during a Congressional hearing, Rep. Paul Ryan says:
"I'm sitting here, listening to this testimony, I don't believe it. That's your problem. Nobody believes you. The Internal Revenue Service comes to us a couple years ago and misleads us and tells us no targeting is occurring. Then it said it was a few rogue agents in Cincinnati. Then it said it was also on progressives. All of those things have been proven untrue...

"You are the Internal Revenue Service. You can reach into the lives of hard-working taxpayers and with a phone call, an e-mail or a letter you can turn their lives upside down. You ask taxpayers to hand onto seven years of their personal tax information in case they are ever audited and you can't keep six months worth of employee e-mails? And now that we are seeing this investigation, you don't have the e- mails, hard drives crashed. You learned about this months ago. You just told us, and we had to ask you on Monday."
Koskinen replies that this was the first time in his career that someone did not believe him.

"I don't believe you," Ryan said again.

When the chairman of the House Ways and Means Committee, Rep. Dave Camp (R-Michigan), notes that the IRS has not issued any apology for not having informed anyone that the emails were lost long ago. "I don't think an apology is owed," Koskinen says. "Not a single email has been lost since the start of this investigation. Every email has been preserved that we have."

Koskinen also says that the appointment of a special federal prosecutor to investigate how the IRS handled tax-exempt applications would be a "monumental waste of taxpayer funds." (Source)
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Congressman Ryan's exchange with IRS Commissioner
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6/20/14

IRS Commissioner John Koskinen tells Congress that Lerner's hard drive had been "recycled and destroyed in the normal process." (Source)
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IRS Commish: Lerner's hard drive destroyed.
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6/18/14

When Information Technology experts say they are confident that they would be able to retrieve the lost emails from Lois Lerner's crashed computer hard drive, the IRS announces that the hard drive has been thrown away. (Source)
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Lois Lerner's email backups likely lost forever.
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6/17/14

The IRS reports that due to computer crashes, it cannot produce e-mails from six more employees – in addition to Lois Lerner – who were involved in the targeting of conservative groups. Among the lost emails were those sent by Nikole Flax, chief of staff to former IRS commissioner Steven Miller. (Source)
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IRS claims it has lost even more employee emails.
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6/13/14 The IRS tells Congress that due to a computer crash, it has lost many of former employee Lois Lerner's emails from 2009-11 – specifically, those she transmitted to other federal agencies including the White House, the Justice Department, the Federal Election Commission, the Treasury Department, and Democratic Members of Congress. Rep. Dave Camp, chairman of the House Ways and Means Committee, says: "The fact that I am just learning about this, over a year into the investigation, is completely unacceptable and now calls into question the credibility of the IRS's response to congressional inquiries.... Frankly, these are the critical years [2009-11] of the targeting of conservative groups that could explain who knew what when, and what, if any, coordination there was between agencies. Instead, because of this loss of documents, we are conveniently left to believe that Lois Lerner acted alone."

In a letter to IRS commissioner John Koskinen, House oversight committee chairman Darrell Issa, who issued a subpoena seeking IRS documents, says that more than 1 million pertinent documents have yet to be produced.

"At this rate, the IRS' response to the committee's subpoena will drag on for years," he wrote. (Source)
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IRS claims it has lost key Lois Lerner emails.
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5/14/14 The Daily Caller reports the following:
The IRS' Washington, D.C. headquarters targeted conservative groups in part due to pressure from Democratic Sen. Carl Levin, according to emails obtained by the watchdog group Judicial Watch and reviewed by The Daily Caller [DC].
Democrat Senator Carl Levin.

Levin, chairman of the Senate Homeland Security and Governmental Affairs' permanent subcommittee on investigations, wrote a March 30, 2012 letter to then-IRS commissioner Douglas Shulman discussing the "urgency" of the issue of possible political activity by nonprofit applicants. Levin asked if the IRS was sending out additional information requests to applicant groups and cit[ed] an IRS rejection letter to a conservative group as an example of how the IRS should be conducting its business.


A top IRS official replied that the agency could send out "individualized questions and requests."

"Some entities claiming tax-exempt status as social welfare organizations under 26 U.S.C.&501(c)(4) appear to be engaged in political activities more appropriate for political organizations claiming tax-exempt status under 26 U.S.C.&527," Sen. Levin wrote. "Because of the urgency of the issues involved in this matter, please provide the following information by April 20, 2012."

Levin asked "if it is not provided on a routine basis, approximately what percentage of such applicants receive an IRS questionnaire seeking information about any political activities, and how the IRS determines whether and when to send that questionnaire; and approximately how many days after an application is filed that questionnaire is typically sent."

Levin cited a 1997 IRS rejection letter to the conservative group National Policy Forum, formed by former Republican National Committee chairman Haley Barbour, and asked Shulman, "Is it still the position of the IRS that a 501(c)(4) organization cannot engage in any partisan political activity, even as a secondary activity?"

Then-IRS deputy commissioner Steven T. Miller sent Levin a 16-page response explaining that the flexibility of IRS rules allow for the agency to "prepare individualized questions and requests."

"There is no standard questionnaire used to obtain information about political activities," Miller wrote. "Although there is a template development letter that describes the general information on the case development process, the letter does not specify the information to be requested from any particular organization ... Consequently, revenue agents prepare individualized questions and requests for documents relevant to the application..."

As TheDC has extensively reported, IRS agents targeted groups' donors, seized training information, demanded personal information on college interns, and even targeted individuals by name.

The emails obtained by Judicial Watch clearly demonstrate that the targeting was based in Washington, D.C.

IRS official Holly Paz wrote a July 6, 2010 email to Washington- based IRS lawyer Steven Grodnitzky "to let Cindy and Sharon know how we have been handling Tea Party applications in the last few months." Grodnitzky replied to the email, confirming that the Washington-based Exempt Organization Technical unit (EOT) was designing the targeting in the nation's capital.

"EOT is working the Tea party applications in coordination with Cincy. We are developing a few applications here in DC and providing copies of our development letters with the agent to use as examples in the development of their cases," Grodnitzky wrote.

"Chip Hull [another lawyer in IRS headquarters] is working these cases in EOT and working with the agent in Cincy, so any communication should include him as well. Because the Tea party applications are the subject of an SCR [Sensitive Case Report], we cannot resolve any of the cases without coordinating with Rob," Grodnitzky wrote.

"Rob" is believed to be then-IRS director of rulings and agreements Rob Choi, who was based at the agency's Washington headquarters, according to Judicial Watch.

Lois Lerner also sent an April 2013 email to IRS internal investigators shortly before the scandal broke, explaining that "staff used their own interpretations of the brief reference to 'organizations involved with the Tea Party movement,' which was what was on the BOLO list." (Source)
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Democrat Senator urged IRS to go after conservatives.
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5/6/14 The House of Representatives, in a 231-187 vote, decides to hold Lois Lerner in contempt of Congress for refusing to testify about the scandal in which the IRS targeted conservative groups, despite a subpoena that demanded her testimony. Six Democrats side with Republicans in the vote.
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House votes Lois Lerner in contempt.
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4/9/14

The Washington Times reports that a government watchdog is pursuing cases against three IRS employees and offices suspected of engaging in illegal political activity in support of President Obama and fellow Democrats:
In one case the Office of Special Counsel, which investigates federal employees who conduct politics on government time, said it was "commonplace" in a Dallas IRS office for employees to have pro-Obama screensavers on their computers, and to have campaign-style buttons and stickers at their office.

In another case, a worker at the tax agency's customer help line urged taxpayers "to re-elect President Obama in 2012 by repeatedly reciting a chant based on the spelling of his last name," the Office of Special Counsel said in a statement. OSC said it is seeking "significant disciplinary action" against that employee.

Another IRS employee in Kentucky has agreed to serve a 14-day suspension for blasting Republicans in a conversation with a taxpayer.

"They're going to take women back 40 years," the IRS employee said in a conversation that was recorded. The employee also said that "if you vote for a Republican, the rich are going to get richer and the poor are going to get poorer."

That employee went on to tell the taxpayer she knew she wasn't supposed to be voicing her political opinions, and asked the taxpayer not to say anything.

In the Dallas situation, the OSC issued a letter to employees reminding them they aren't allowed to do anything that would appear to be campaigning. "Specifically, it was alleged that employees have worn partisan political stickers, buttons, and clothing to work and have displayed partisan political screensavers on their IRS computers. It was alleged that these items expressed support for President Barack Obama," the OSC said.

The IRS issued a statement saying it couldn't comment on specifics, but vowing it took complaints of politicking seriously.
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Dallas IRS Office a Pro-Obama political hotbed.
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4/7/14

House Oversight Committee
Chairman Darrell Issa.
A new report by aides to Rep. Darrell Issa, chairman of the House Oversight and Government Reform Committee, reveals that IRS agents have testified before Congress that – contrary to recent claims by Democrats – the agency's political targeting did not apply to liberal/left organizations. A Daily Caller story explains:
IRS agents testified before Oversight that ACORN groups were scrutinized because the agency thought they were old organizations applying as new ones. Emerge America was scrutinized for potential "improper private benefit." No evidence exists that the IRS requested additional information from any Occupy Wall Street group.

"Only seven applications in the IRS backlog contained the word 'progressive,' all of which were then approved by the IRS, while Tea Party groups received unprecedented review and experienced years-long delays. While some liberal-oriented groups were singled out for scrutiny, evidence shows it was due to non-political reasons," according to the Oversight staff report...

"[T]he Administration and congressional Democrats have seized upon the notion that the IRS's targeting was not just limited to conservative applicants," the report states. "These Democratic claims are flat-out wrong and have no basis in any thorough examination of the facts. Yet, the Administration's chief defenders continue to make these assertions in a concerted effort to deflect and distract from the truth about the IRS's targeting of tax-exempt applicants."

"[T]here is simply no evidence that any liberal or progressive group received enhanced scrutiny because its application reflected the organization's political views," the report stated.
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IRS agents testify: No progressive groups targeted.
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3/26/14

House Oversight Committee
member Jason Chaffetz.
In testimony before the House Oversight Committee, IRS commissioner John Koskinen makes no mention of Lois Lerner's computer hard-drive crash. Under questioning by Rep. Jason Chaffetz (R- Utah), Koskinen says that IRS emails "get taken off and stored in servers." He also acknowledges that seven months after Congress first asked the IRS to supply Lerner's emails request, the agency has not yet begun serious work to find them and turn them over. But he assures: "We can find, and we are in fact searching, we can find Lois Lerner's emails." (Source)
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The IRS Commissioner's changing story.
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3/11/14
Lois Lerner is sworn in before
House Oversight Committee Chairman Darrell Issa.

Darrell Issa's Committee on Oversight and Government Reform issues a staff report on Lois Lerner and her involvement in the IRS targeting of conservative groups. According to Breitbart.com:

The [Oversight Committee] report suggests Lerner misled Congress in four instances and attempted to downplay the inappropriate targeting after it came to light.

The report says Lerner was concerned about the political implications of allowing 501(c)(4) groups to spend money on election related activity in the wake of the Citizens United decision. The Oversight Committee report concludes that Lerner was involved in three separate efforts to curb such spending. From the report's conclusion:

Evidence indicates Lerner and her Exempt Organizations unit took a three pronged approach to "do something about it" to "fix the problem" of nonprofit political speech:
1) Scrutiny of new applicants for tax-exempt status (which began as Tea Party targeting);
2) Plans to scrutinize organizations, like those supported by the "Koch Brothers," that were already acting as 501(c)(4) organizations; and
3) "[O]ff plan" efforts to write new rules cracking down on political activity to replace those that had been in place since 1959.

The sense conveyed in the report is that Lerner was concerned IRS activity might appear to be "per se political" (as she warned in one email) even as she helped slow walk any movement toward approval on cases which were, overwhelmingly, conservative groups.

In the summer of 2011, Lerner learned about the criteria used to gather the Tea Party cases, which included "[s]tatements in the case file [that] criticize how the country is being run." As a result she adjusted the criteria for selection so it would not appear to be focused on right-leaning groups. However, while her adjusting of the criteria represents an admission that the prior criteria had been problematic, she apparently made no effort to release the cases selected under that criteria. Tea Party cases remained gummed up in the multi-tier review process she had recommended.

The same briefing prepared for Lerner noted that one of the groups under scrutiny "stated it will conduct advocacy and political campaign intervention, but political campaign intervention will account for 20% or less of activities." That's far below the 49% threshold set by law. The briefing for Lerner added, "A proposed favorable letter has been sent to Counsel for review." But the report notes that as of June 2013, a full two years later, the application was still pending.

And there is no doubt Lerner was aware who was being scrutinized. In July 2012, Lerner was notified by email that of the 199 501(c)(4) cases which had been set aside "approximately 3/4 appear to be conservative leaning while fewer than 10 appear to be liberal/progressive leaning groups... "

Earlier in 2012, Lerner was asked a series of questions by Committee staff. The report lays out four instances where she appears to have misled them in her answers. For instance, Lerner was asked whether criteria for examining 501(c)(4) cases had been changed at any time. She said no. But, as noted above, she had changed the criteria used to identify cases for scrutiny herself in 2011.

In response to another Committee question about letters sent to conservative groups demanding donor lists, Lerner replied this had been done "in the ordinary course of the application process."

Later, in 2013, the Committee learned from the IRS Commissioner's Chief of Staff, Nikole Flax, that she was unable to find another instance in the IRS' history where such a request had been made.

Finally, the report is critical of Lerner's attempt to downplay the import of the TIGTA findings by arranging a planted question to which Lerner could give a scripted answer claiming the targeting had been a mistake, not "a political vendetta." Internally, Lerner wrote an email saying of the forthcoming report, "It is what it is ... we will get dinged." But a few months later, just before the report was released, she was exploring her retirement options. (Source)

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The House Oversight committee report on Lois Lerner.
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3/5/14
Former IRS official Lois Lerner once again invokes her Fifth Amendment right not to testify at a House Oversight Committee hearing, just as she previously did on May 22, 2013. Though Republicans argue that Lerner waived her Fifth Amendment right by giving a statement during that May 22 hearing, Lerner, in response to several questions, says: "On the advice of my counsel, I respectfully exercise my Fifth Amendment right and decline to answer that question." (Source)

After the hearing is adjourned, Lerner's attorney, Bill Taylor, says that his client will make no further statements or give any testimony unless forced to. According to Taylor, the Oversight Committee "would have to start all over" in its investigation to compel Lerner back to the witness stand. (Source)
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Lerner pleads the fifth; Issa and Cummings clash.
Lerner's attorney says case is over now!
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2/11/14
Catherine Englebrecht, founder of "True The Vote", one of the conservative groups targeted by the IRS.

House Ways and Means Chairman Dave Camp (R- Michigan) says that his committee's continuing investigation has found that the IRS targeting of conservative groups extended far beyond merely placing hurdles in the path of organizations that were seeking 501(c)(4) tax-exempt status. Says Camp:
"We now know that the IRS targeted not only right-leaning applicants, but also right-leaning groups that were already operating as 501(c)(4)s. At Washington, DC's direction, dozens of groups operating as 501(c)(4)s were flagged for IRS surveillance, including monitoring of the groups' activities, websites and any other publicly available information. Of these groups, 83% were right-leaning. And of the groups the IRS selected for audit, 100% were right-leaning." (Source)
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Ways & Means Chairman: IRS targeted Conservatives.
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2/2/14
President Obama tells Bill O'Reilly there's
not a "smidgen" of corruption at the IRS.

In an interview with Fox News' Bill O'Reilly, President Obama adamantly rejects the suggestion that the IRS had been used for political purposes by targeting Tea Party groups that sought tax-exempt status. "That's not what happened," Obama says, explaining that certain IRS officials had simply made some "some bone-headed decisions" due to their confusion about the proper procedure for implementing the law governing tax-exempt organizations. When asked whether corruption, or mass corruption, had been a factor, Obama replies: "Not even mass corruption—not even a smidgen of corruption." Obama also acknowledges that then-IRS Commissioner Doug Shulman had been to the White House more than 100 times, but says he cannot recall speaking to him on any of those occasions. (Source)
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Obama: Not even a "smidgen" of corruption at IRS.
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