WSJ’s James Taranto on FOX News discusses our IRS targeting report


James Taranto: A miss to the Internal Revenue Service which claims to have ended the ideological targeting of non-profit organizations. But as the Cause of Action Institute points out, the rule that enabled this targeting is still on the books. It tells agents to investigate any non-profit that might, and I quote, “attract media or congressional attention,” which suggests the IRS is more interested in protecting its image than the rights of Americans.

You can access our full report, “Sensitive Case Reports: A Hidden Cause of the IRS Targeting Scandal” HERE


The IRS Responds to Our Report on Targeting – but Misses the Point

As detailed in our recent report, the IRS targeting scandal has a hidden cause which remains unaddressed to this day – a rule in the agency’s own manual that directs employees to treat applications differently if they might “generate media or Congressional attention.”  This rule is what initially prompted low-level IRS tax specialists to hold up applications from Tea Party groups, ultimately resulting in both years of delays for taxpayers and widespread embarrassment for the agency.

The report was accompanied by an op-ed in the Wall Street Journal and was reported on by, among other outlets, Fox News and the EO Tax Journal.  Both of these news reports included quotes from an IRS statement responding to our findings – or at least the agency’s interpretation of them.  Although the aggressive tone of the IRS response surprised the editor of the EO Tax Journal, it serves as a classic example of the bureaucratic mindset that led to the targeting scandal happening in the first place.  Here is the IRS statement in full, as reported in the EO Tax Journal:

“The IRS strongly disputes the [Cause of Action] report and any suggestion or allegation that Exempt Organizations is targeting taxpayers. The IRS emphasizes that this point has been confirmed by independent third parties, including the Treasury Inspector General for Tax Administration. There should be absolutely no doubt on that point, and the continuing commitment by the IRS to be guided by the tax law and nothing else.”

“[Sensitive Case Reports] are used within the IRS to bring to upper management’s attention cases that may generate press or Congressional attention, present unique or novel issues, or affect large numbers of taxpayers. It’s important to note that IRS internal guidelines on sensitive case reports do not instruct the employees to stop working a case or direct employees on how to work a case.

It is head-spinning that the IRS can argue in one sentence that it should be guided by tax law “and nothing else” and then insist in the very next sentence that it is proper to consider “press or Congressional attention” as a criterion, delaying a final decision on tax-exempt applications as a result.  The only purpose of this rule is to avoid possible embarrassment.  Yet an application for tax exempt status is no more related to the notoriety of the applicant than a driver’s license is to the fame of the driver – if you pass the test, you should get the status

The problem with rules that mandate this kind of PR-minded defensiveness is that, as amply documented by the many investigations into the targeting scandal, it drags the application process through multiple echelons of bureaucracy and involves higher officials with strong political leanings. The IRS’s statement claims that it was absolved by the Treasury Inspector General for Tax Administration (TIGTA), but in reality, a report from that office repeatedly criticized the IRS for “using inappropriate criteria” to scrutinize applications – criteria which ended up focusing overwhelmingly on political opponents of the administration in power.  IRS officials insisted on seeing every application from Tea Party-affiliated groups because of the “media attention” they were attracting, and as shown in the same TIGTA report, the result was an endless array of delays and invasive questioning.

John McGlothlin is counsel at Cause of Action Institute

Report Finds Threat of IRS Targeting Continues Today

Washington D.C. – Cause of Action Institute (“CoA Institute”) today released a staff report titled, “Sensitive Case Reports: A Hidden Cause of the IRS Targeting Scandal,” outlining how seven years after the IRS targeting scandal began, the rule that enabled this inexcusable behavior remains in place.

IRS targeting during the Obama administration involved invasive questioning and years-long delays in the processing of applications by non-profit organizations for tax-exempt status, and focused disproportionately on right-leaning groups, especially those with “Tea Party” in their name. The policy that enabled this targeting is an internal rule that singles out applications from any group interested in issues that might garner attention from either the media or Congress. In such cases, the merits of the application are ignored as IRS employees develop “Sensitive Case Reports” for consideration by those above them in the IRS hierarchy.  In the targeting scandal, the existence of this rule allowed partisan concerns to overtake the process, leading to the unfair treatment of groups holding political viewpoints at odds with the Obama administration.

The report explains that unless and until that rule is removed from the internal manual used by all IRS employees, targeting of political opponents will remain a very real threat. Fortunately, removing the offending provisions is a simple process that can be started at any time and completed without the need for new legislation.

The full report can be accessed HERE

In Case You Missed It…

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‘Media Attention’ and IRS Abuse
A simple rule fix could end partisan targeting tomorrow.

By John J. Vecchione | March 21, 2017

The Internal Revenue Service’s targeting of Americans for their political views may have ended with the Obama administration—or even with its exposure in 2013. But it could easily recur. Even now, an internal IRS rule singles out applicants for nonprofit status who might be tied to anything newsworthy.

The genesis of the targeting scandal was Section 7.29.3 of the Internal Revenue Manual. As noted in a report my organization is issuing Wednesday, this manual dictates how IRS employees handle everything from customer service to criminal investigations… Read More


For information regarding this press release, please contact Zachary Kurz, Director of Communications at CoA Institute: