Originally published on Forbes.com.
Last week, Paul Caron, the TaxProf, dean of the tax blogosphere, called an end to daily coverage of “The IRS Scandal” on Day 1352. This was 552 days beyond the point that I had opined that the series had “jumped the shark”. To be clear, I was not suggesting that the Prof stop covering the scandal, just that there be an occasional day here and there on which there was nothing to report. So it just took another 552 posts for that to happen. It is worth noting that there were more Happy Days episodes after Fonzie jumped the shark than before, so maybe it was not such a bad call on my part.
Regardless, in order to make my case for shark-jumping, I went through the series in two posts which are here and here. For the sake of completeness, I thought it would be nice to go through the rest of the series to see how it is that the Prof managed to keep it going for over a year after my shark jumping call. Over a year ago, on Day 943, Professor Caron indicated that he was running out of material and it might be ending soon. Things changed on Day 984. He had thought that it might end at 1,000, but the certification of a class-action lawsuit – NorCal Tea Party Patriots v IRS promised significant material for some time to come.
Where Does It Begin?
Just as a reminder. Day 1, May 10, 2013, is where the TaxProf count starts with the headline – IRS Admits to Targeting Conservative Groups in 2012 Election.
After months of denying that the IRS has been targeting tea party groups for special scrutiny, Lois Lerner, Director of the IRS’s Exempt Organizations Division, admitted that the IRS had been giving additional scrutiny to applications for tax-exempt status from goups with the “Tea Party” or “patriot” in their title. She denied there was any political motivation and blamed the practice on a low-level employee in Cincinnati
From literally Day 1, two things always troubled me about the scandal. One was that while your exempt application is under consideration you can just keep doing whatever you are doing . The other was that if the groups in order to qualify had to be mostly not political then how could messing with them be an election strategy? Scandal believers have answers for those questions, but it is good to keep them in mind as you follow along.
Of course, activities relative to the scandal predate Day 1. Kelly Erb, Taxgirl, created a chronology of the saga that commences in July 2008 with Citizens United being told that running ads for a movie attacking Hillary Clinton would be a violation of the McCain Feingold Act. This serves as a reminder that an overarching issue in the scandal is the role of dark money in politics. My two posts last year took us us through Day 880 though, so that will have to do for background.
The question is how did the TaxProf find something every single day after Day 880 to keep the series going for well over another year. And another question worth looking at might be what the effect of the series was. Rather than the chronological approach I used last time, I will go thematically this time. What filled up the space during the period from October 2015 to January 2017 were a number of things – litigation, Lois Lerner, reform,allusion, commentary and impeachment.
Litigation
Certain types of lawsuits will have multiple rulings as they work their way towards resolution and they will also uncover juicy documents, such as emails during discovery. Even better there might be something, like a hard drive that was supposed to be preserved and wasn’t. Each such event will provide a day or two of coverage in and of itself and then there will be reactions, commentary and possibly reaction to reactions and commentary on the commentary.
Most fruitful was NorCal Tea Party Patriots v IRS, a class action suit by organizations whose applications for exemption were delayed by the Cincinnati gang that couldn’t sort straight. This litigation is, of course, at the heart of the core scandal. As noted NorCal is what made the Prof think things would go longer on Day 984. It also appears on Day 979 , Day 998 , Day 1049 and Day 1052 (There may be more.) The interesting back story on the NorCal case is indications that it is being funded by interests connected to the Koch brothers. Day 1014 has a story about hedge fund magnate Robert Mercer making a large donation to Citizens for Self Governance, which is involved in the NorCal lawsuit.
Americans For Prosperity v Harris shows up on Day 966, Day 995 and Day 1027 . This case has no real connection to the core scandal. It is about the State of California requiring not for profits to attach Schedule B of Form 990 to their state filings. Schedule B lists names and addresses of large donors. So the connection is to the overall drive to keep dark money dark. That, of course, is the background issue. That is why there were so many 501(c)(4) applications. If people wanted to form organizations to explicitly defeat President Obama in 2012, they could have formed them under Section 527 and the IRS would not be concerned very much. They would then, however, have to publicly disclose donors.
Then there was the National Organization for Marriage. They had won a lawsuit against the IRS, which had admitted that it screwed up when it inadvertently released NOM’s donor list. NOM did not however prevail on attorney fees which is discussed on Day 945. Again this case really has nothing to do with the core scandal.
Other scandal related cases are Cause of Action Day 1303, Freedom Path v Lois Lerner Day 1116 and Day 1305 , Linchpins of Liberty Day 1267 and True The Vote Day 1185
Finally there is the Microsoft audit. What has that to do with the scandal? Well there was this hard drive that was lost. Day 994 Day 996 Day 1002.
One of the interesting thing about all this litigation is that none of it concerns a group having exempt status denied and then litigating about it. That keeps the focus entirely on what the IRS was doing rather than what the groups were doing.
Can’t Make This Stuff Up
Day 1024 is in a class all by itself as we learn that Donald Trump has been audited so many times perhaps because he is such a strong Christian.
It happens that I just finished reading Think Big: Make It Happen in Business and Life and I’m having just a bit of trouble finding the Christian influence in there. There is the chapter on Revenge, for example, the lessons of which are emphasized in the Q&A at the end.
If you do not get even, you are just a schmuck! When people wrong you, go after those people, because it is a good feeling and because other people will see you doing it. I love getting even.
And then there are his exploits with women
Beautiful, famous, successful, married – I’ve had them all, secretly, the world’s biggest names.
I don’t know. Maybe the Christian stuff is another one of his books.
Lois Lerner
Anything that comes out about Lois Lerner is automatically part of the scandal narrative. On Day 892 there is her contacts with a top elections official in Wisconsin. The announcement by Justice that she would not get indicted was grist for Day 899 and Day 900. Day 1148 is about a Lerner driven document dump from the IRS to the FBI. This is one of the events that I read differently than the scandal believers. Lois Lerner thought that there was law-breaking going on, perjury explicitly, by the creators of 501(c)(4) organizations. Assuming for the sake of argument, that her transmitting the documents to the FBI was illegal, this is more indicative of her not being career IRS. Further, the FBI does not seem to have done anything with this revelation. If the administration was actually interested in going after 501(c)(4) groups who were, you know, fibbing about their political activities, this was the big opportunity. So this particular piece of the scandal narrative seems to me to support the notion that there was no senior administration pulling the puppet strings. It was Lois Lerner passionately trying to stem the dark money tide and not able to get anyone else interested.
Reform
Day 980 gave us a report by GAO on internal controls against targeting in the future not being strong enough. The thing is when auditors look at internal controls, they always find weaknesses. Just saying. There are also some reform measures discussed such as not allowing IRS to use personal email for official business Day 956, Day 968, and Day 969.
Allusions
Allusions are the category that I think represents the padding that managed to fill in the days. To get into the scandal narrative, your work did not actually have to be about the scandal. You just had to indicate that you had not forgotten about it. George Will’s New Year piece on Day 971 falls into this category and his Day 911 coverage of the California disclosure controversy.
Oddly enough, I may be one of the largest contributors in this regard. One of the things that I follow is exempt organizations and I would usually refer to the ongoing scandal coverage when I wrote about them. So you will see me on Day 915 on the reaction to the clerical error on the Clinton Foundation Form 990, on Day 1018 covering the denial of exempt status to a Knights of Columbus bingo operation, something about a liquor license on Day 1045 and on Day 1315 when I wrote about the denial of exempt status to someone who was trying to raise money to preserve their own home.
One of the oddest outbreaks of scandal allusions was an IRS attempt to fill in a regulatory gap left over from the 1990s. In order to deduct a charitable contribution of $250 or more, you need to have an acknowledgment from the charity that indicates whether you received anything in return. You must have the acknowledgment in hand when you file your return. This rule has been strictly enforced. Congress had left open the possibility that the IRS might create another option for charities themselves to report contributions. Attempts to use this opening to fix screw-ups by charities went nowhere. Finally, the IRS proposed an optional procedure that charities could use. Of course, this involved the charities getting ID numbers from their donors.
This attempt to fill in a regulatory blank somehow became associated with the scandal prompting an extreme response on Day 938, Day 940, and Day 974. The IRS meekly withdrew the proposed regulation that would have provided an optional procedure as was contemplated in the original legislation.
Commentary
Scattered among the days are full-scale commentary pieces about the scandal. I’m not going to give you a lot of links, but instead, am putting out the three pieces that lay out the two extreme positions and a more intermediate one. On Day 1008 in recognition of the scandal millennium (by TaxProf day count) Jennifer Kabbany wrote in the National Review one of the best summaries of the scandal true believer creed.
Nearly three years ago America learned the IRS had maliciously targeted conservative groups seeking tax-exempt status – slow-walked their applications and demanded onerous and invasive details such as speech transcripts, donor lists and more.
Then, over the course of the following years, federal agents destroyed evidence and lied and obfuscated before Congress in a criminal cover-up as bad as the initial wrongdoing. However, the effects of the IRS’ actions had taken their toll, with some political observers suggesting the agency’s biased attack helped ensure Obama’s re-election by hindering his opposition.
His long list of blog entries is a sight to behold and illustrates the depth of IRS malfeasance. Here’s a thanks to Professor Caron and his persistence. Let’s hope members of Congress can apply the same aptitude to eventually hold someone accountable for IRS lawlessness.
Ms. Kabbany’s comment on the series is perhaps indicative of the most unfortunate effect of the TaxProf’s method as she mentions the “long list of blog entries” being a “sight to behold”. That comment is an indication to me that Ms. Kabbany has not actually taken the trouble, as have I, to read all the entries. To her, there are a thousand nails in the IRS coffin. What I see is less than a dozen nails pounded on numerous times and then pried up and pounded on a few more times and a lot of folks using the occasion of the wake to talk about other things.
The series also contains reference to the counter-narrative. On Day 1144, we hear from Ralph Nader
More telling was the exhaustive, multi-year, $2 million investigation by the Republican Inspector General of the IRS, Russell George, who cleared the IRS Commissioner of the Chaffetz Committee’s charges. Mr. George, a Bush appointee, found no politically motivated targeting of these conservative 501(c)(4) applications, no obstruction of justice and no concealing of information from Congress. Some bureaucratic sloppiness, sure, but that was all.
And Senator Sheldon Whitehouse:
If the IRS enforced its rules, or fixed its rules where they could not be enforced, or referred what appear to be self-evident false statements by dark-money groups to the Justice Department for investigation, the river of dark money flowing to the GOP might dry up. Keeping the IRS battered, cowed and on its heels makes strategic sense for the GOP.
I have to wonder what it would be like if Senator Whitehouse ran for the presidency. It seems like punsters would find him irresistible.
A more nuanced view, one that I find interesting although not persuasive, is put out by Joe Kristan. He believes what happens was a form of self-weaponization on the part of the IRS.
The self-weaponization of the bureaucracy against its political opponents is hugely depressing. The government workforce is overwhelmingly on the side of the political party that favors an ever-larger state. There are plenty of Lois Lerners in the IRS and throughout the Leviathan. The Tea Party scandal, and the complete lack of accountability for its perpetrators, gives no reason to hope those who don’t share that worldview can expect a fair shake. That’s especially true when the sitting president (referring to President Obama) shows no interest in discouraging such behavior
This view is buttressed by an entry on Day 965 with reports about federal employees giving more political donations to Democrats than Republicans. My read on this particular revelation was that federal employees are not big spenders when it comes to political donations as the report covered twenty-five years.
Impeachment
I’ve saved the most, if not the best for last, the story that filled out the most days in the final chapter appears to be the push to impeach IRS Commissioner John Koskinen. George Will called for impeachment on Day 882.
If the House votes to impeach, the Senate trial will not produce a two-thirds majority needed for conviction: Democrats are not ingrates. Impeachment would, however, test the mainstream media’s ability to continue ignoring this five-year-old scandal, and would demonstrate to dissatisfied Republican voters that control of Congress can have gratifying consequences.
The impeachment resolution comes on Day 902. Impeachment is the dominant factor in the coverage from there going up to Day 1332. I’ll let you dig through those entries for your self.
The Big Mystery
Most of the commenters on the coverage tended to support the anti-IRS narrative. When I showed up, there would often be a brickbat thrown. My favorite was from somebody who goes by Porkypine
Peter J. Reilly’s writings on this matter in Forbes have tended to be IRS/Administration apologias, under a thin cloak of reasonableness. Too thin to cover the way he hovers between disingenuousness and mendacity in these efforts, however.[
There was one though who joined me in scandal skepticism. That is Publius Novus whose last supportive comment was
I am a Reilly Agnostic. I too would like to see what’s under the rocks. Specifically, I would like to hear testimony from Lerner after an immunity grant. And if the Republicons were honest about pursuing this mess, they would grant immunity. Why not Mr. Chaffetz?
It is interesting to note that Paul Caron himself called for Lerner immunity in a piece on USA Today which was featured way back on Day 369. I have not had any luck in figuring out who Publius Novus actually is, Paul Caron has told me that he doesn’t know. Joe Kristan suggested Judge Crater, a joke that was too obscure for me to get. Well, he or she should not have any trouble finding me.
And those comments are probably an indication of one of the best things about the TaxProf’s chronicle. It took the people who follow it out of their bubbles. It will be interesting to see whether the crusade picks up again. I can see in the coming weeks as the practicality of the Obamacare replacement or the wall building becomes challenging, that representatives of the Trump administration and the Republican congressional majority will start pining for the days when the buck did not stop with them. Then they will recall that Lois Lerner was probably the best enemy that they ever had and the scandal will get another lease on life.