Monday, July 22, 2013
As we have noted in other postings, Paul Caron’s TaxProf Blog is daily covering the controversy surrounding the IRS’s processing of applications for tax exemption filed by hopeful section 501(c)(4) entities, particularly what may well have been an unprecedented process reserved solely for tea party and similar groups. It is not always easy to see through the fog generated by partial facts, extensive spinning, and wishful thinking promulgated by observers speaking from all sides of the controversy. Moreover, the sheer volume of titles appearing in news sources can obfuscate what is most significant.
One piece of congressional testimony that does strike me as significant has emerged over the past few days. As reported in the online version of the Washington Post, IRS attorney Carter Hull testified that the chief counsel’s office for the Internal Revenue Service contributed to the development of the agency’s controversial guidelines for reviewing “tea party” cases. Hull reportedly testified that his superiors told him that the chief counsel’s office “would need to review some of the first applications the agency screened for additional scrutiny because of potential political activity.”
While the Post story notes that the Chief Counsel for the IRS, William Wilkins, was appointed to his position by President Obama, an article in the National Review Online points out that “the officials from the chief counsel’s office who participated in the August 2011 meeting operated far below him [i.e., Wilkins] in the chain of command.” These facts hardly point directly to the White House, or even to anyone appointed by the President. They are, however, a far cry from the initial narrative that assigned blame to relatively low-level exemption agents in Cincinnati. The latter article continues, “Why the chief counsel’s office became involved in the matter remains unclear, but witness testimony suggests it was [Lois] Lerner’s office that pushed to involve the agency’s top lawyers.”
As unpleasant as the continued coverage of this controversy may be for many, as anti-climactic as it may end up being for others, and as annoyingly partisan as the investigation has already become, I (for one) would still like to know exactly how the IRS settled upon its process of reviewing section 501(c)(4) applicants. There must be more than one lesson for tax and nonprofits lawyers – public and private – that one can mine from the true facts.