Congress Vows to Investigate IRS Activity

Top congressional Democrats joined with Republicans on Monday in calling for investigations into why the Internal Revenue Service singled out conservative groups for scrutiny in the run-up to the 2012 elections, and at least three committees are expected to look into the matter.

But even as President Obama himself strongly condemned the reported IRS activity, some Democrats attempted to set the controversy in a different context. They argued that it illustrates problems they’ve been warning about after a 2010 Supreme Court decision allowed corporations and labor unions to register for tax-exempt status and spend unlimited sums to influence elections.

“There needs to be more clarity in the law regarding the activities of tax-exempt organizations, along with greater disclosure and transparency,” said House Minority Leader Nancy Pelosi, D-Calif.

Pelosi was not bringing up new complaints. In March 2012, seven Senate Democrats urged the IRS to impose a strict cap on the amount of political spending by tax-exempt, nonprofit groups. Those senators, led by Chuck Schumer of New York, wrote a letter saying that the lack of clarity in IRS rules has allowed political groups to improperly claim 501(c)4 status and may even be allowing donors to wrongly claim tax deductions. The senators promised legislation if the IRS failed to act.

While Pelosi on Monday underscored that the IRS actions were wrong, she went on to clearly attach some blame to the Supreme Court decision in Citizens United v. Federal Election Commission, arguing it has “exacerbated the challenges posed by some of these so-called ‘social-welfare organizations.’ ”

Her comments indicate Democrats don’t appear resigned to simply join the finger-wagging against an easy-to-dislike government agency. Still, investigations in Congress are moving forward.

On Monday, the House Ways and Means Committee announced that it would hold a hearing Friday on the IRS’s “practice of targeting applicants for tax-exempt status based on political leanings.” The two witnesses scheduled to appear are Acting IRS Commissioner Steven Miller and Treasury Inspector General for Tax Administration J. Russell George. The inspector general is expected to release a report later this week that will say senior agency officials knew about the activities dating from 2011.

Already, Rep. Charles Boustany, R-La., who chairs the Ways and Means Oversight Subcommittee, has sent a letter to Miller asking the agency to turn over all communications that include words like “tea party” or “patriot.”

Sen. Marco Rubio, R-Fla. has gone further, asking for the administration to secure Miller’s resignation. “It is imperative that you, your predecessor, and other past and present high-ranking officials at the Department of Treasury and IRS immediately testify before Congress,” Rubio said in a letter to Treasury Secretary Jacob Lew.

Meanwhile, leaders of two other committees, the Senate Finance Committee and the House Oversight and Government Reform Committee, said they will also hold hearings. “The IRS will now be the ones put under additional scrutiny,” said Senate Finance Committee Chairman Max Baucus, D-Mont., in a statement Monday.

In addition, Sen. Carl Levin, D-Mich., chairman of the Senate Permanent Subcommittee on Investigations, and Sen. John McCain, R-Ariz., the subcommittee’s ranking member, said Monday that their panel has been examining for several months whether the IRS is adequately enforcing rules in which tax-exempt nonprofits engage in partisan politics. They said their committee will now also investigate whether the agency was singling out some groups.

Meanwhile, outside of Congress, the president of Citizens United, a conservative organization at the center of the Supreme Court’s 2010 decision, reacted with anger at the suggestion by Pelosi that the court case was at least partly at fault for IRS conduct.

“Nancy Pelosi and her liberal allies’ obsession with the Citizens United Supreme Court case has reached a new low, with those on the left attempting to blame the Citizens United case for the IRS using Nixonian tactics against conservative groups,” David Bossie said. “It is imperative that Congress and all other appropriate authorities investigate this issue and follow whatever road it leads down.”

He added, “Using the IRS for political purposes is shameful and Nancy Pelosi and Democrats in Congress must join their Republican colleagues and get to the bottom of this apparent abuse of power.”