FactCheck.org » IRS http://www.factcheck.org A Project of the Annenberg Public Policy Center Tue, 15 Jul 2014 17:06:10 +0000 en-US hourly 1 http://wordpress.org/?v=3.8.1 IRS, Benghazi and Accountability http://www.factcheck.org/2014/01/irs-benghazi-and-accountability/ Thu, 23 Jan 2014 22:50:46 +0000 http://www.factcheck.org/?p=80826 Former New York Mayor Rudy Giuliani praised New Jersey Gov. Chris Christie for holding “people accountable who were responsible” for the “stupid” bridge lane closings — adding that’s something President Barack Obama “failed to do with Benghazi” and “failed to do with the IRS.” It depends on your definition of accountable, but the Obama administration did take disciplinary action in both cases, and the president directly did so with the IRS.

In response to an inspector general’s report that the IRS used “inappropriate criteria” to determine the tax-exempt status of conservative groups, Obama ordered the immediate removal of the acting IRS commissioner. A second IRS official resigned rather than be fired; a third retired; and a fourth was placed on administrative leave.

In the Benghazi case, four State Department employees were removed from their jobs and placed on leave after an independent review board criticized the “grossly inadequate” security at the Benghazi consulate that was attacked on Sept. 11, 2012. All four were reassigned when they returned to work.

Giuliani made his remarks on NBC’s “Meet the Press” while discussing Christie’s handling of the decision by some in his administration to unilaterally and without notice close two approach lanes to the George Washington Bridge.

Giuliani, Jan. 19: Look, the allegations are serious about the closure of the bridge. No question about it. But, on the other hand, the governor faced up to the allegations in a very serious way. … He held the people accountable who were responsible for it, something the president has failed to do with Benghazi, president has failed to do with the IRS.

Christie quickly acted after emails showed that his top aides without advance notice or explanation ordered two approach lanes of the bridge closed, causing traffic problems for four days in Fort Lee, N.J. On Jan. 8, it was disclosed that Deputy Chief of Staff Bridget Anne Kelly had written an email that said, “Time for some traffic problems in Fort Lee.” A day later, at a Jan. 9 press conference, Christie said he had fired Kelly. He also announced that his former campaign manager, Bill Stepien, would no longer be his choice to become state party chairman and that he had directed Stepien to end his consulting work for the Republican Governors Association. Christie is chairman of the RGA.

Kelly’s email was sent to David Wildstein, who at the time was director of interstate capital projects at the Port Authority of New York and New Jersey, which owns and operates the bridge. Wildstein replied to Kelly’s email by writing, “Got it.” Wildstein resigned from that job in early December, saying that an investigation into the bridge lane closures was becoming a “distraction.” Days later, Deputy Executive Director of the Port Authority Bill Baroni resigned. Baroni was appointed by Christie on Feb. 19, 2010, and hired Wildstein.

All four people who were fired or resigned were political appointees or hires and served at the pleasure of the governor. That was not the case at the IRS and State Department, where career civil servants were at the center of those controversies.

The IRS Fallout

The inspector general for tax administration at the Treasury Department issued a report on May 14, 2013, that found the IRS used “inappropriate criteria,” beginning in March 2010, when vetting groups seeking tax-exempt status as nonprofit “social welfare” organizations. The criteria singled out groups for extra scrutiny if they had specific conservative names, such as “tea party,” and conservative descriptors, such as concern with government spending and debt.

A day after the report was released, Obama held a press conference and called the IG’s findings “an outrage.” The president asked Treasury Secretary Jacob Lew to conduct an audit “to see how this happened and who is responsible.” He also announced that Lew asked and received the resignation of acting IRS Commissioner Steven Miller. Lew issued a statement calling the agency’s actions “inexcusable and unacceptable” and said Miller’s resignation was needed “to restore public trust and confidence in the IRS.”

The agency’s tax-exempt office in the tax-exempt and government entities division was at the center of the controversy. Three top officials in that office were also removed in the days and weeks following the release of the report:

  • The IRS announced on May 16, 2013, that Joseph Grant, commissioner of the agency’s tax-exempt and government entities division, would retire on June 3. The announcement came two days after the IG report and just eight days after Grant was promoted from deputy commissioner to commissioner.
  • Lois Lerner, director of exempt organizations, was placed on administrative leave on May 23, 2013. She resigned in September after an internal review recommended that she be removed from her position. “Lawmakers said Lerner’s resignation came as an Accountability Review Board formed by temporary IRS chief Daniel Werfel was set to remove Lerner for mismanagement,” McClatchy reported on Sept. 23, 2013.
  • Holly Paz, director of the office of ruling and agreements within the tax-exempt and government entities division, was placed on administrative leave in early June 2013, according to the Washington Post. (We asked the IRS about the current status of Paz, but it has yet to respond. We will update this story if it does.)

The leadership team of the tax-exempt and government entities division has been either removed or reshuffled based on the organizational charts posted on the IRS website in May 2013 and now.

The Benghazi Fallout

The U.S. consulate in Benghazi was attacked on Sept. 11, 2012, by heavily armed extremists, resulting in the deaths of four U.S. citizens — including U.S. Ambassador to Libya Christopher Stevens.

On Dec. 19, 2012, an accountability board required by federal law to review such attacks released a report that found security at the compound was “grossly inadequate to deal with the attack that took place.” The Accountability Review Board blamed “[s]ystemic failures and leadership and management deficiencies at senior levels within two bureaus of the State Department.”

That day, four State Department employees were placed on administrative leave. All four were identified by name in a House Oversight and Government Reform Committee report: Eric Boswell, assistant secretary for diplomatic security; Scott Bultrowicz, director of diplomatic security service; Charlene Lamb, deputy assistant secretary for international programs; and Raymond Maxwell, deputy assistant secretary for Maghreb affairs.

A New York Times story on the report and the action taken against the four State employees quoted a Republican congressman as saying that the four people placed on administrative leave “have been held accountable.”

New York Times, Dec. 19, 2012: “The board severely critiques a handful of individuals, and they have been held accountable,” said Representative Ed Royce, Republican of California, who is the incoming chairman of the House Foreign Affairs Committee. “The degree that others bear responsibility warrants Congressional review, given the report’s rather sweeping indictment. And the Foreign Affairs Committee must hear from Secretary of State Hillary Rodham Clinton concerning her role, which this report didn’t address.”

At an Aug. 20, 2013, press briefing, State Department Deputy Spokeswoman Marie Harf said that the four employees would be “reassigned to different positions within the Department, and they will be returning to work.” She said the decision was based on a lengthy review that took “into account the totality of these four employees’ overall careers at the State Department.”

Harf, Aug. 20, 2013: Clearly, things could have been done better. I think that’s patently obvious to everybody who’s followed this for almost a year now. But again, we have to let the facts lead where they may, and these are people with real lives and real careers, and we can’t just take action that’s not warranted against them just to make us all feel better.

So, disciplinary action was taken — but no one was ultimately fired.

The State Department tells us in an email that Boswell now works on “real property issues”; Bultrowicz works on “management and administrative projects” in the office of the executive director of the Bureau of Diplomatic Security; and Charlene Lamb “is in training.” Raymond Maxwell retired.

Republicans criticized the State Department’s decision to reassign the employees. Royce — who months before said the four individuals “have been held accountable” — held a hearing of the House Foreign Affairs Committee on Sept. 18, 2013, titled, “Benghazi: Where is the State Department Accountability?” In his opening statement, he said, “no State Department personnel have been fired, or even disciplined. No one has missed a paycheck.”

A New York Times story on the Foreign Affairs hearing said that “Mr. Royce and other Republicans took direct aim at Patrick F. Kennedy, the under secretary for management, whose office oversees diplomatic security, for what they said was a lack of accountability at the department for the failures Benghazi revealed.” Kennedy called the reassignments “serious accountability.” Royce responded: “Reassignment just doesn’t cut it.”

Republicans have asserted that others should have been held accountable for the Benghazi attack.

Six Senate Republicans who filed an “additional views” addendum to a recent report on Benghazi by the Senate Select Committee on Intelligence said Kennedy himself “should be held accountable.” The Senate Republicans said that Kennedy, who has been working in foreign service since 1973, was “uniquely situated to anticipate the potential for a terrorist attack on the Benghazi facilities,” based on his past government experience during the 1998 East Africa Embassy bombings and during his time in Iraq in the aftermath of Saddam Hussein’s removal as Iraqi leader.

The Republican addition to the report also said that “the final responsibility for security at diplomatic facilities lies with the former Secretary of State, Hillary Clinton.”

Clearly, there can be differences of opinion over the level of accountability. But the administration did take disciplinary action against employees at the IRS and State Department. We leave it for you to decide if the Obama administration did enough.

– Eugene Kiely

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Whoppers of 2013 http://www.factcheck.org/2013/12/whoppers-of-2013/ Thu, 19 Dec 2013 15:46:47 +0000 http://www.factcheck.org/?p=80121 Summary

It’s that time of year again when we look back — perhaps not so fondly — on the most noteworthy nonsense from the past 12 months. The year after a presidential election was certainly no letdown from a fact-checking perspective. In 2013, we uncovered falsehoods to fairy tales about immigration, gun control, the IRS, Benghazi and — no surprise here — the Affordable Care Act.

  • President Obama’s now legendary claim that “if you like your health care plan, you can keep your health care plan” is actually an old whopper for us. But it smashed into reality this year as insurers canceled individual market plans.
  • Republicans claimed Congress was “exempt” from the health care law, when in fact lawmakers face an additional requirement that other Americans don’t. A so-called “special subsidy” is nothing more than the standard employer contribution to premiums that the government has long made for its employees.
  • White House Press Secretary Jay Carney falsely said the State Department had changed only one word of CIA talking points on the deadly attack on the U.S. diplomatic post in Benghazi, Libya.
  • Sen. David Vitter, among others, claimed the Senate immigration bill would cost taxpayers $6.3 trillion, citing a Heritage Foundation report. But the report wasn’t on the bill itself, and it gave a 50-year cost estimate.
  • The IRS’ Lois Lerner misled reporters about when she first learned of employees singling out conservative groups for scrutiny.
  • Both Republicans and Democrats made false claims about premium rates under the Affordable Care Act, while Rep. Michele Bachmann and Rep. Louie Gohmert gave bogus statements about how the law would “literally kill” Americans or punish those earning $14,000 a year.
  • The National Rifle Association wrongly claimed that “80% of police say background checks will have no effect” on violent crime, and Democrats used an old, thin survey to claim 40 percent of guns were acquired without a background check.

And that’s not all. There were more falsehoods on guns, the health care law, the Sept. 11 hijackers, worker productivity and President Obama’s court nominees. What follows is our compilation of the whoppers of the year, in no particular order.

Analysis

For more on each claim, follow the links to our original articles.

‘If You Like Your Plan …’ Well, Not So Much

President Obama’s claim that “if you like your health care plan, you can keep your health care plan” made a big splash this year. But a debunking of the president’s years-old promise was old news to us. In fact, the claim is now a three-time whopper designee: It made our list of presidential campaign whoppers in 2012 and a 2010 list of health care whoppers. We said as far back as August 2009 that the president simply couldn’t make this promise to everyone.President Obama's Health Care Promise

Those stories were based on expert analysis of the impact of the law, and some common sense. The Congressional Budget Office has been estimating since 2009 that at least a few million workers wouldn’t receive an offer of coverage through their employer due to the law, and clearly, Obama couldn’t guarantee that employers wouldn’t switch the plans they offered, whether the Affordable Care Act existed or not. Also, as we wrote in 2012 those who buy private coverage on their own “may have to get a new plan if theirs doesn’t cover minimum benefit standards, which are yet to be determined. Plus, the insurance carriers offering these policies can change the plans without the policyholders’ blessing.”

In 2013, reality proved Obama’s whopper wrong, as insurers canceled millions of individual market plans that didn’t cover all the benefits the law required of those plans, and some employers did exactly what the CBO expected. The grocer Trader Joe’s, for instance, sent its part-time employees to the exchanges, along with $500 each to help them get new insurance there.

In this business, it seems false claims never die, but perhaps this one finally has. Obama said he was “sorry” for the whole affair in an interview with NBC News.

Reality Confronts Obama’s False Promise, Oct. 29

Congress Not ‘Exempt,’ No ‘Special Subsidy’

Speaking of immortal falsehoods, several Republicans, and a steady dose of viral emails, have claimed that members of Congress are “exempt” from the health care law. But no matter how this one is spun — and we’ve seen several variations — it’s not true. Lawmakers are required to have insurance, or pay a penalty, just like the vast majority of Americans. This “exempt” claim actually pertains to a special requirement for Congress and members’ staffs: They have to get their insurance through the exchanges, and they’re forbidden from continuing to get coverage through their employer, the federal government. That’s thanks to a Republican amendment added to the Affordable Care Act.

When the Office of Personnel Management ruled that Congress and staffers could continue to receive an employer contribution to their exchange plan premiums, some, including North Carolina Rep. Robert Pittenger and former Arkansas Gov. Mike Huckabee, claimed Congress was getting a “special subsidy.” Huckabee said it was a “little break” for Congress that “really exempted them from some of the pain of Obamacare.” But it’s nothing more than the same level of premium contribution the government has long paid for employees’ insurance, a contribution it also will continue to make for other federal workers.

Congress and an Exemption from ‘Obamacare’?  May 3

No ‘Special Subsidy’ for Congress, Aug. 30

Benghazi Blunder

White House Press Secretary Jay Carney repeatedly, and wrongly, said that the White House and State Department had changed just one word of CIA-authored talking points on the Sept. 11, 2012, attack on the U.S. diplomatic post in Benghazi. The talking points, used by U.S. Ambassador to the United Nations Susan Rice on political talk shows, said the attack, which killed four Americans, including U.S. Ambassador to Libya Chris Stevens, started “spontaneously” as a protest. But that turned out to be false. The attack was premeditated and carried out by terrorists.

Carney said the White House and State Department only changed the word “consulate” to “diplomatic facility.” But news reports from the Weekly Standard and ABC News, which published 12 drafts of the talking points, show that State Department comments prompted the CIA to make many alterations, including deleting references to CIA warnings of al Qaeda-linked threats and the possibility of the al Qaeda-linked Ansar al-Sharia being involved. We’d note that Republicans asserted the changes amounted to an election-year cover-up, but there’s no evidence of that. One thing that was not changed was the false claim that the attack was the result of a spontaneous protest. That was contained in the original draft, and survived into the final version.

Benghazi Attack, Revisited, May 14

Health Care Hyperbole

We’ve seen some far-fetched claims about the Affordable Care Act over the years, and 2013 was no exception.

In a March floor speech, Minnesota Rep. Michele Bachmann urged Congress to repeal Obamacare “before it literally kills women, kills children, kills senior citizens.” That’s an interesting claim, considering millions are expected to gain coverage under the law — 25 million of the uninsured would gain insurance by 2016, according to the Congressional Budget Office. Some studies have shown that not having insurance leads to a higher risk of dying prematurely.

Texas Rep. Louie Gohmert pushed the bogus bit that a “poor guy out there making $14,000″ is “going to pay extra income tax if he cannot afford to pay the several thousand dollars for an Obamacare policy.” That “poor guy” would be eligible for Medicaid or, in a state that isn’t expanding Medicaid, like Texas, he would be eligible for heavily subsidized private insurance. And he can’t be taxed or fined if he can’t afford that private coverage or chooses not to buy it.

Kentucky Sen. Rand Paul was wrong when he claimed “you will go to jail” if you don’t buy health insurance and refuse to pay the tax penalty. The law says that persons who do not pay the penalty “shall not be subject to any criminal prosecution.” In 2010, the IRS commissioner confirmed violators wouldn’t face jail time. The IRS could dock future tax refunds to collect the penalty.

Our sister site, FlackCheck.org, compiled a video on these whoppers and others on the Affordable Care Act.

Bachmann’s Killer Health Care Claims, March 22

Louie Gohmert’s Health Care Hooey, Aug. 14

Cruz-a-thon, Part II, Sept. 27

 A Whopper from the IRS

A political firestorm erupted this year over IRS employees’ extra scrutiny of conservative groups seeking tax-exempt status. Lois Lerner, director of the IRS’ exempt organizations division, wrongly told reporters on May 10 that she first loislernerlearned of employees targeting these groups in 2012 from media reports on conservative organizations that complained about delays. But a Treasury inspector general’s report released four days later showed she knew about the flagging of conservative groups nearly a year earlier, and that she tried to correct it.

Lerner, the IG report said, was briefed in late June 2011 about employees singling out groups applying for 501(c)(4) status with “tea party” or “patriot” descriptors. The status is for “social welfare” organizations that can be involved in politics as long as it is not their “primary activity.” Lerner raised concerns and “instructed that the criteria be immediately revised,” the report said. She also learned in early 2012 that the IRS had sent the groups letters asking “unnecessary” questions — as determined by her office — such as the identity of donors. But when questioned by reporters just days before that report was released, Lerner said that “we started seeing information in the press that raised questions for us and we went back and took a look.” Lerner retired from the IRS in September.

IRS Officials Misled Congress, Public, May 21

Slanted Price Tag on Immigration

After a bipartisan group of senators — the so-called Gang of Eight — released immigration legislation that included a path to citizenship, the conservative Heritage Foundation, an opponent of the bill, countered with a report claiming the cost of such an overhaul would total $6.3 trillion. Republican Sens. David Vitter and Jeff Sessions used the study as ammunition to criticize the bill, with Vitter claiming that “[a] $6.3 trillion price tag should completely disqualify the Gang of 8 proposal.” But the study wasn’t on this particular legislation — it was begun months before the bill was released — and the cost figure is over 50 years, a length of time that makes such projections highly speculative. Not to mention not as large as the figure seems: $6.3 trillion over half a century would be about 1 percent of government spending.

The $6.3 trillion figure also relied on a less optimistic estimate of offsetting economic benefits than the Congressional Budget Office did. The nonpartisan CBO later estimated that the Senate bill, which would provide a 13-year path to citizenship for immigrants in the U.S. illegally and increase border security funding, would reduce the deficit by $158 billion over 10 years, and by another $685 billion in the decade after that. Heritage’s eye-popping $6.3 trillion figure also does not take into account the net cost — compared with the cost of doing nothing. The author of the report acknowledged the net cost would be $5.3 trillion, but he said “a loophole in existing law” could make the net cost “trillions” less than that. The bill passed the Senate in late June; the House could take action on immigration legislation in 2014.

The Immigration Bill’s ‘$6.3 Trillion Price Tag,’ June 4

9/11 Hijackers and Student Visas

Only one of the Sept. 11, 2001, hijackers was in the U.S. on a student visa, despite claims to the contrary made by several lawmakers. Republican Sens. Lindsey Graham, who helped draft the Senate immigration bill, and Chuck Grassley, who opposed it, both claimed at a Senate committee hearing that the hijackers were on student visas. Graham said “the 19 hijackers on 9/11 were all students here on visas” that had expired. Then Homeland Security Secretary Janet Napolitano even agreed with that assessment.

But they’re all wrong. Eighteen of the 19 hijackers entered the U.S. on tourist or business visas, according to the 9/11 Commission Report.

9/11 Hijackers and Student Visa, May 10

Both Sides Spin Gun Stats

The early months of 2013 were dominated by a debate on gun control, as politicians and advocates reacted to the December 2012 mass shooting at an elementary school in Newtown, Conn. Both sides of the debate used false and misleading statistics in an attempt to bolster their cases.

In online ads opposing Senate legislation to expand background checks, the National Rifle Association fabricated a statistic: that “80% of police say background checks will have no effect” on violent crime. The cited survey in question didn’t say that. At all. The self-selected online poll didn’t contain a single question asking whether “background checks” would impact “violent crime.”guns

Democrats, meanwhile, adopted a favorite talking point based on thin evidence: As President Obama said in a Jan. 16 speech, “as many as 40 percent of all gun purchases are conducted without a background check.” That’s based on a nearly 20-year-old survey of fewer than 300 people who were asked whether they thought guns they had acquired came from federally licensed dealers.

Vice President Joe Biden acknowledged the questionable nature of that statistic when he once used it, cautioning that “we can’t say with absolute certainty what I’m about to say is correct.” Biden wasn’t nearly as careful when he claimed that “there were fewer police being murdered … when the assault weapons ban, in fact, was in existence.” FBI statistics on the killings of law enforcement officers don’t support that. In fact, there’s no discernible pattern before, during or after the assault weapons ban was in effect, from 1994 to 2004.

New York Democratic Rep. Charlie Rangel added his own false claim to the debate over a new ban on assault weapons. Rangel claimed there are “millions of kids dying, being shot down by assault weapons.” Thankfully, that’s not even close. Over a 30-year period, there were about 65,000 homicides with any firearm — not just “assault weapons” — among those 19 years old or younger. That’s according to the Centers for Disease Control and Prevention’s National Center for Injury Prevention and Control database, which shows there were nearly 1 million violence-related firearm deaths (not only homicides) in the U.S. for all ages from 1981 to 2010.

NRA Misrepresents Police Survey, Legislation, April 18

Guns Acquired Without Background Checks, March 21

Biden Wrong on Police Deaths, Jan. 30

Rangel’s Assault Weapons Whopper, March 22

And Both Sides Spin Insurance Premiums

The Affordable Care Act’s impact on insurance premiums has been a hot topic, with Republicans and Democrats cherry-picking statistics and anecdotes, and giving false comparisons on rates going up or down. President Obama falsely said in August that all of the currently uninsured would be able to get coverage on the exchanges “at a significantly cheaper rate than what they can get right now on the individual market” even without federal tax credits. Not true. Experts have long predicted that some will pay more and some will pay less. Even Health and Human Services Secretary Kathleen Sebelius said so.

Obama also said that the average premiums for the Illinois exchange were 25 percent lower than individual market rates. Not so. Illinois officials said rates were 25 percent lower than federal officials had predicted, not 25 percent lower than current rates.

Texas Sen. Ted Cruz, meanwhile, greatly exaggerated when he said the Ohio Department of Insurance had announced that individual market premiums would increase by 88 percent because of the law. Instead, the department said estimated rates would be 41 percent higher on average in 2014, compared with 2013. That was in a press release that called for the law’s repeal.

As we’ve said many times, those buying their own insurance could see their premiums go up or down — or largely stay the same — due to any number of individual factors, including age, health status, where they live and whether they smoke. And what kind of insurance they had before. Exhibit A: The drastically different experiences of House Speaker John Boehner and Rep. Joaquin Castro in choosing plans on the exchange. Boehner, age 64, said his premiums will double. But Castro, age 39, said he will pay about half of what he is paying now.

Obama Overpromises on Premiums, Aug. 13

Spinning Premium Rates, Sept. 27

Not-So-Judicial Facts

Obama claimed that “my judicial nominees have waited three times longer to receive confirmation votes than those of my Republican predecessor.” Wrong. In Obama’s first term, he made out better than President George W. Bush with nominees to federal appeals courts. Obama’s were confirmed more quickly on average than Bush’s first-term nominees. Obama’s federal trial courts nominees took an average of 42 percent longer than Bush’s to confirm, but not “three times” longer. Obama didn’t say this, but he was talking about the time nominees waited for a vote after first being approved by the Senate Judiciary Committee — not the total wait time.

Obama’s Judicial Juggling, June 5

We’re Not That Productive

In a commencement address, Vice President Biden falsely boasted that U.S. workers “are three times as productive as any worker in the world.” We may work hard, but not that much harder than the rest of the globe. By the standard measure of productivity – gross domestic product per hour worked — Americans came in third, trailing Norway and Ireland, according to a report from the Bureau of Labor Statistics. Even using a different measure — GDP per employed person — the U.S. came in second, still behind the hard-working people of Norway.

Joe Biden’s Productivity Piffle, May 15

A note to our readers: This isn’t an exhaustive list, and we likely missed some of your personal favorites. As we get ready to turn the page on 2013, we invite you to share your thoughts on the most egregious whoppers of the year at editor@factcheck.org.

– by Lori Robertson

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A Botched Attack on IRS Budget http://www.factcheck.org/2013/06/a-botched-attack-on-irs-budget/ Fri, 14 Jun 2013 20:30:15 +0000 http://origin.factcheck.org/?p=75660 An ad calling for the abolishment of the IRS incorrectly claimed that the federal agency’s budget increased by $2 billion. In fact, it’s down by nearly $1 billion during President Barack Obama’s first term. To its credit, though, Americans for Fair Taxation, the group behind the ad, removed the $2 billion reference after we asked about it.

In the original ad, a narrator accuses an “out of control” IRS of “playing politics” while the words “$2 billion budget increase” appear on screen. The 30-second spot was posted to the group’s YouTube channel on June 12. On the same day, the Washington Post wrote that the anti-tax group would spend “in the mid-six-figures” to air it, beginning June 17.

No explanation or citation is provided for when the $2 billion increase was supposed to have occurred. After FactCheck.org questioned the $2 billion figure, Curtis Ellis, a spokesman for the group, said that it had made a mistake and would fix the ad. And it did.

On June 13, Americans for Fair Taxation uploaded a revised video to YouTube that replaced the words “$2 billion budget increase” on the screen with “IRS committed political sabotage,” which was the headline of a May 16 opinion article written by the chairman of the National Organization for Marriage. The opinion piece said the IRS was to blame for leaking confidential tax information about the conservative group.

Original Ad

Revised Ad

The fact is that the IRS budget has declined every year for three straight years, from $12.14 billion in fiscal year 2010 (Obama’s first budget) to $11.2 billion in the current fiscal year (which ends Sept. 30).

The president’s budget for fiscal year 2014 requests nearly $12.9 billion for the IRS. At the time of Obama’s budget proposal, the $12.9 billion represented about a $1 billion increase from the 2012 enacted level of $11.8 billion, as the budget says. Since then, however, the automatic budget cuts required by the sequester have reduced the IRS budget to $11.2 billion for this year. That’s less than the enacted funding amount of $11.5 billion for fiscal year 2009, which was the last budget under President George W. Bush.

So, Obama’s budget proposal is about $1.7 billion higher than the current level.

But the $12.9 billion for fiscal 2014 is only a request. It is by no means a guarantee that that spending level will be approved by Congress. And as this chart from the IRS Oversight Board shows, in recent years, the amounts appropriated by Congress have regularly been lower than what both the board has recommended and what the president has requested.

Source: IRS Oversight Board FY2014 IRS Budget Recommendation Special Report, May 2013

Source: IRS Oversight Board FY2014 IRS Budget Recommendation Special Report, May 2013

We don’t want to discount the fact that the ad has been revised. It isn’t often that political ad makers correct the record. Neil Newhouse, Mitt Romney’s pollster, famously said during the 2012 campaign: “We’re not going to let our campaign be dictated by fact-checkers.” It’s particularly important that Americans for Fair Taxation changed the ad before it airs on TV, where it will get a wider audience. For that, the group deserves some credit — even as we both set the record straight.

– Justin Cohen, with D’Angelo Gore

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IRS Probe So Far Yields Partial, Partisan ‘Facts’ http://www.factcheck.org/2013/06/irs-probe-so-far-yields-partial-partisan-facts/ Thu, 13 Jun 2013 18:53:00 +0000 http://origin.factcheck.org/?p=75664 The House Oversight Committee chairman and the ranking Democrat are overreaching in recent statements about the committee’s investigation of the IRS. Chairman Darrell Issa has yet to produce evidence of his theory that the Obama administration in Washington “directly … ordered” the agency to target conservative groups seeking tax-exempt status. But Democratic Rep. Elijah Cummings has failed to provide evidence that there was “no political involvement,” and he goes too far when he says “the case is solved.”

The two men have been engaged in a high-profile exchange in recent days over the Obama administration’s level of involvement in the IRS controversy. The Treasury Inspector General for Tax Administration found that the IRS used “inappropriate criteria” to determine the tax-exempt status of “social welfare” groups. Specifically, the IRS singled out groups for extra scrutiny based on search terms that were exclusively conservative descriptors – including names, such as “tea party” or “patriot,” or policy positions, such as concern over government spending and debt.

The back-and-forth between Issa and Cummings began after Issa went on CNN’s “State of the Union” on June 2 to allege that Obama administration officials in Washington ordered the targeting of conservative groups.

Issa, June 2: As you know, as late as last week the administration’s still trying to say there’s a few rogue agents in Cincinnati, when in fact the indication is they were directly being ordered from Washington.

The IG report found no evidence of that. In fact, the report said that employees in the Cincinnati office “developed and implemented” the “inappropriate critiera” in early 2010 and Lois Lerner, the director of the exempt organizations division, “immediately directed that the criteria be changed” once she learned about it in June 2011.

To support his claim, Issa released excerpts of interviews that his committee conducted with IRS staffers based in Cincinnati. But the excerpts were hardly conclusive. Asked if Washington directed the extra scrutiny of the tax-exempt applications of conservative groups, one unnamed IRS staffer replied, “I believe so.” The excerpts show the witness didn’t know for certain whether orders came from Washington or not.

Here is an excerpt released by Issa with that witness:

Q: So is it your perspective that ultimately the responsible parties for the decisions that were reported by the IG are not in the Cincinnati office?

A: I don’t know how to answer that question. I mean, from an agent standpoint, we didn’t do anything wrong. We followed directions based on other people telling us what to do.

Q: And you ultimately followed directions from Washington; is that correct?

A: If direction had come down from Washington, yes.

Q: But with respect to the particular scrutiny that was given to Tea Party applications, those directions emanated from Washington; is that right?

A: I believe so.

CNN host Candy Crowley challenged Issa’s lack of conclusive evidence, and he responded by saying there are more transcripts to release and more evidence to collect. “We’re getting to proving it,” he said.

But the evidence he has released so far hasn’t proved it.

Then again, Cummings hasn’t supplied evidence that proves his claim, either.

On June 9, the ranking Democrat on the committee appeared on “State of the Union” and CBS’ “Face the Nation” and discussed just-released excerpts of other committee interviews that he said proved Issa wrong. He told Crowley, “[T]he case is solved.”

The excerpts Cummings released included the testimony of a self-described conservative Republican who was the IRS screening group manager in the Cincinnati office at the time. The manager said that a screening agent in Cincinnati was the first to bring the tea party cases to his attention and that he notified “EO Technical” (Exempt Organizations Technical in Washington) “based upon, you know, the high-profile issue.”

Cummings, “Face the Nation,” June 9: This Republican manager said there was no White House involvement, no political involvement, none of that. He made the decision doing the best he could to have some kind of consistency.

But the excerpts are not as conclusive as Cummings portrayed them.

The IRS manager, who was not named by the committee, said, “I am not aware of that,” when asked directly about a political bias or political motivations behind the targeting of conservative groups. And he said he had “no reason to believe” that the White House was involved in the decision to target conservatives.

The excerpts released by Cummings also included parts of testimony given by an IRS screening agent based in Cincinnati who said he developed the initial criteria in early 2010 — a statement that is consistent with the IG report. But the excerpts do not address why the agent used search terms that only targeted conservatives. They also don’t fully explain why the manager considered the tea party cases a “high-profile issue,” or what Exempt Organizations Technical in Washington did with the tea party cases forwarded by the Cincinnati office.

(So-called “social welfare organizations” seeking tax-exempt 501(c)(4) applications can be involved in political activity as long as it is not their “primary activity.” It is the job of the Exempt Organizations division to determine if the group qualifies for such status. EO Technical provides advice to area managers on “unusual or complex” cases or when there is a “lack of uniformity” in handling such cases.)

The Wall Street Journal reviewed other excerpts of committee interviews with IRS staffers based in Cincinnati that show Carter Hull, a lawyer in EO Technical, was involved in the drafting of some of the questions that were later sent to groups flagged for extra scrutiny. But there’s much that we don’t know — including what advice Hull provided, whether it was followed, and whether his advice was meant just for conservative groups or for all groups seeking tax-exempt status that were engaged or planned to be engaged in political activity.

The Journal found the transcripts it reviewed to be inconclusive.

Wall Street Journal, June 5: The transcripts don’t suggest that Obama administration officials at the Treasury or the White House knew of or were involved in the targeting. Many questions remain unanswered, including who ordered the targeting.

The excerpts released by Issa and Cummings are just snippets of hours-long interviews. Issa said he does not want to release the full transcripts of interviews conducted so far, saying it would compromise the investigation. That may be. But the public trust is compromised when the committee’s top members selectively release partial transcripts that provide an incomplete picture of what has become a partisan investigation.

– Eugene Kiely

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Republican Overreach on IRS http://www.factcheck.org/2013/05/republican-overreach-on-irs/ Tue, 21 May 2013 18:12:54 +0000 http://factcheck.annenbergpublicpolicycenter.org/?p=75385 While there has been plenty to find fault with in the revelation that the IRS targeted some tea party groups seeking tax exempt status, some of the Republican rhetoric has been an overreach.

  • Rep. Michele Bachmann falsely claimed that Americans “most personal, sensitive, intimate, private healthcare information is in the hands of the IRS,” while raising the specter that the IRS will misuse that information against “political opponents of this administration.” The IRS will not have access to personal health records.
  • Sen. Rand Paul passed along baseless speculation that “the person running Obamacare” was the one “who wrote the policy” at the center of the IRS controversy. That’s a reference to a former IRS commissioner of the office responsible for tax-exempt organizations who now heads the IRS’ Affordable Care Act office. But a Treasury Inspector General’s report found that employees the Cincinnati office, not any administrators in Washington, “developed and implemented” the policy in question.
  • Rep. Paul Ryan said that the IG investigators “didn’t look at emails, they didn’t look at intent, they didn’t look who was in the chain of information.” That’s not true. The IG office did look at emails and conducted interviews, and the report made findings about who knew what and when.

Bachmann’s Overreach

Bachmann, who led a House effort to repeal the Affordable Care Act, told ABC News the IRS revelations raise broader concerns about how the IRS may handle people’s medical information under the Affordable Care Act.

Bachmann, May 20: When people realize that their most personal, sensitive, intimate, private healthcare information is in the hands of the IRS that’s been willing to use people’s tax information against political opponents of this administration, then people have pause and they pull back in horror.

But Health and Human Services and IRS officials have repeatedly explained that the IRS will not have access to anyone’s personal medical records.

“The Affordable Care Act maintains strict privacy controls to safeguard personal information,” Health and Human Services spokeswoman Joanne Peters wrote to us in an email. “The IRS will not have access to personal health information. Application for financial assistance will be part of applying for coverage on the Marketplace and will take place in near real time.”

This isn’t the first time we’ve dealt with such a claim at FactCheck.org. Back in November we looked into a claim from the conservative group Americans for Tax Reform that under the health care law, taxpayers will have to disclose “personal identifying health information” to the IRS to prove they have insurance.

Starting in 2014, the health care law requires most Americans to have insurance or pay a tax, although exemptions will apply based on income and other factors. The IRS will require most taxpayers to prove they’re covered or they must pay a tax on their 2014 tax returns.

In congressional testimony in September, then-IRS deputy commissioner Steven Miller made it clear that the IRS will not collect any personal health information.

Miller, Sept. 11, 2012: Taxpayers will get a form at the end of every year from their insurer to use when they prepare their tax returns. It is important to note that the information that insurers provide to the IRS will show the fact of insurance coverage, and will not include any personal health information.

Last year, the IRS proposed the types of information insurers must submit to the IRS in 2015 — and they don’t include personal health details.

The agency proposed asking insurers for the following:

  • The name, address and Social Security Number or Tax Identification Number of the taxpayer and any dependents.
  • Dates the insurer provided coverage.
  • Whether the insurance is considered “qualified” under the law, which means it covers a number of broadly defined health benefits, among other requirements.
  • Whether the individual bought insurance through an affordable insurance marketplace, known as a health insurance exchange.
  • Whether the individual is eligible for tax credits and other assistance to help pay for coverage.

In case there was still any question, Democratic Rep. Jim McDermott asked Miller in a House committee hearing on May 17 whether the IRS would be asking for personal medical records. (accessed via CQ Transcripts)

McDermott, May 17: The IRS can’t access your medical files. Is that true, Mr. Miller?

Miller: Correct, sir.

McDermott: They cannot find out your private medical information.

Miller: That’s correct, sir.

McDermott: Their job in Obamacare is simply to collect … financial information on which a determination is made as to whether somebody can get a subsidy for their premiums. Is that correct?

Miller: Were you covered and over what period is what we would be getting.

Miller is currently the acting IRS commissioner. Treasury Secretary Jack Lew requested his resignation, but Miller remains acting commissioner until his appointment expires June 8, ABC News reported.

Paul’s Unfounded Speculation

In an appearance on CNN’s “State of the Union” on May 19, Sen. Rand Paul also tied the IRS controversy to the health care law, which he referred to as Obamacare.

Paul, May 19: There’s rumors that who wrote the [IRS] policy [to scrutinize tea party and other conservative groups] is the person running Obamacare, which doesn’t give us a lot of confidence about Obamacare.

He’s referring to Sarah Hall Ingram, who served as the IRS’ commissioner for the Tax Exempt and Government Entities Division for a portion of the period under the IG’s review. Ingram is now the director of the IRS’ Affordable Care Act office (so not “running” Obamacare, just overseeing the IRS end).

More importantly, the Treasury Inspector General for Tax Administration’s report makes no suggestion that Ingram “wrote the policy” that resulted in the IRS targeting conservative groups seeking tax exempt status.

The IG’s report concluded the policy, or directive, wasn’t written by administrators in Washington, D.C., but rather, “The Determinations Unit [in Cincinnati] developed and implemented inappropriate criteria in part due to insufficient oversight provided by management. Specifically, only first-line management approved references to the Tea Party in the BOLO [be on the lookout] listing criteria before it was implemented.”

According to the report, Lois Lerner, the IRS’s director of the exempt organizations division — a position under Ingram — “immediately directed that the criteria be changed” once she learned about it in June 2011.

At worst, the report suggests that perhaps Ingram can be criticized for failing to provide management guidance, but not for writing the policy, as Paul suggested.

Further scrutiny of the IRS is coming, but on “Fox News Sunday,” Obama senior adviser Dan Pfeiffer warned that people ought not to jump the gun on Ingram until all the facts are in. The report does not name anyone; only titles were used and her title rarely appears in the 48-page report.

Pfeiffer, May 19: Well, I think first it’s important to note this individual [Ingram] was not named in the inspector-general’s report. No one has suggested she’s done anything wrong yet … The acting commissioner is going to do a 30-day review. And everyone who did anything wrong is going be held accountable.

But I think before everyone in this town convicts this person in a court of public opinion with no evidence, let’s actually get the facts and make decisions after that.

Unless or until further investigation proves otherwise, Paul’s speculation runs contrary to the findings of the IG report.

Ryan’s Misplaced Criticism

Rep. Paul Ryan distorted the facts while making the claim that a real investigation needs to be done to find out how high up the IRS scandal went.

On “Fox News Sunday,” Ryan said the IG investigators “didn’t look at emails, they didn’t look at intent, they didn’t look who was in the chain of information. So, none of that information has been acquired yet.”

It’s a matter of opinion whether the IG investigators were thorough enough, but Ryan underplayed the extent of the IG’s report. In fact, the IG’s investigators did conduct interviews and scrutinize emails, and they attempted to find out how high up the chain the directive regarding the targeting of some conservative groups went.

The report specifically notes that some findings were based on “interviews of EO function employees and our review of EO function e-mails.” Also, most of the sources listed in the “Comprehensive Timeline of Events,” (in Appendix VII beginning on page 31) are listed as emails.

The report also includes a “High-Level Organizational Chart of Offices Referenced in This Report,” (Appendix V, page 29) as well as a detailed timeline whose express purpose was to try to describe who knew what and when.

Again, we take no position about whether further investigation is warranted. But Ryan’s assertion that the IG’s investigators didn’t look at emails or attempt to “look who was in the chain of information” is not accurate.

– Robert Farley and Eugene Kiely

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IRS Officials Misled Congress, Public http://www.factcheck.org/2013/05/irs-officials-misled-congress-public/ Tue, 21 May 2013 17:01:32 +0000 http://factcheck.annenbergpublicpolicycenter.org/?p=75368 IRS officials gave false or misleading information on numerous occasions regarding its now discredited practice of targeting conservative groups that sought nonprofit status.

A Treasury inspector general’s report issued May 14 found the IRS used “inappropriate criteria,” beginning in March 2010, to identify potential political groups seeking nonprofit status based on their names and policy positions. It also found that a high-level IRS official in Washington learned in June 2011 that the criteria targeted groups with specific conservative names, such as “tea party,” and conservative descriptors, such as concern with government spending and debt.

Nevertheless, the IRS failed to publicly acknowledge the problem until May 10 — four days before release of the IG report — even though allegations of harassment surfaced in news accounts in February 2012 and Congress pressed the IRS for information.

Here are several specific incidents in which IRS officials gave false, misleading or incomplete information to Congress and the public:

  • Lois Lerner, director of the IRS’ exempt organizations division, falsely claimed that she first learned of employees singling out conservative groups in 2012, because of media reports. But the inspector general’s report shows she was briefed on the practice in June 2011 and took action to correct it.
  • Lerner told a House committee in May 2012 that the IRS is justified in requesting information from conservative groups about their donors and policy interests in certain cases. That’s true, but she failed to disclose that nearly a year earlier she learned that IRS staffers in Ohio were making what she deemed “unnecessary” requests for such information in dozens of instances.
  • Lerner blamed a heavy workload for the problem, telling reporters that the applications for 501(c)(4) nonprofit status had “more than doubled,” from 1,500 in 2010 to over 3,400 in 2012. That’s true, but use of the “inappropriate criteria” began in March 2010 and 501(c)(4) applications declined in the fiscal year that ended Sept. 30, 2010, according to the inspector general’s report.
  • Acting IRS Commissioner Steven Miller was asked at a July 2012 congressional hearing, “What kind of … action is taking place at this time that you are aware of” to address complaints that groups seeking nonprofit status were being harassed. Miller said an increase in 501(c)(4) applications was causing processing delays, but he did not disclose that he had learned two months earlier that conservative groups were being inappropriately singled out for extra scrutiny.
  • George Shulman, the IRS commissioner at the time, falsely told a House committee in March 2012 that there was “absolutely no targeting” of conservative groups. Shulman testified at a Senate hearing on May 21 that he learned in spring of 2012 that the list of group names targeted for review included the term “tea party,” but he did not know “the scope and severity of the list” until this month.

IRS Used ‘Inappropriate Criteria’

At issue is the IRS process, from March 2010 to July 2012, for reviewing applications filed by organizations seeking 501(c)(4) nonprofit status. Such groups are considered “social welfare” organizations, but they can be involved in politics as long as it is not their “primary activity” — a vague term that the inspector general’s report says led to abuse because of poor management guidance. Specifically, the IRS Determinations Unit in Cincinnati, Ohio, began in March 2010 to flag groups with conservative descriptions, such as “tea party” or “patriots,” for extensive and lengthy reviews.

Lerner, director of the IRS’ exempt organizations division since 2005, acknowledged the agency’s mistakes shortly before release of the IG report. Lerner did so at an American Bar Association meeting on May 10, as reported by the Associated Press. Later that day, Lerner was asked in a media conference call how she learned of the problem, and she said “we started seeing information in the press that raised questions for us.” The press began reporting on conservative groups complaining about harsh scrutiny from the IRS in early 2012.

Karen Tumulty, Washington Post reporter, May 10: How and when did this come to your attention and through what process?

Lerner: Well, I think you guys were reading the papers as much as I was. So it was pretty much, we started seeing information in the press that raised questions for us and we went back and took a look.

Later in the conference call, she was asked again about the timing and responded, “I didn’t know exactly what was going on. I was seeing the same things in the press that you were.”

But that’s directly contradicted by the report issued four days later by the Treasury inspector general for tax administration.

The inspector general report says that Lerner was briefed June 29, 2011 on the criteria that was developed and used by the agency’s Determinations Unit.

IG report, May 14: The briefing paper noted that the Determinations Unit sent cases that met any of the criteria below to a designated team of specialists to be worked:

  • “Tea Party,” “Patriots,” or “9/12 Project” is referenced in the case file.
  • Issues include Government spending, Government debt, or taxes.
  • Education of the public via advocacy/lobbying to “make America a better place to live.”
  • Statements in the case file criticize how the country is being run.

Over 100 applications were identified by this time. It was decided to develop a guide sheet for processing these cases.

Lerner, who was identified in the report by her title “Director, EO,” had “raised concerns over the language of the BOLO ['be on the lookout'] listing criteria” and “instructed that the criteria be immediately revised,” the report said. Lerner’s office broadened the criteria to “focus on the potential ‘political, lobbying, or [general] advocacy’ activities of the organization,” according to the report.

In January 2012, the Determinations Unit then changed the criteria again to “political action type organizations involved in limiting/expanding government, educating on the constitution and bill of rights, social economic reform/movement” because the unit felt the criteria “was too generic.” The IG report says Lerner learned of the change in criteria in April 2012.

IRS Asked ‘Unnecessary’ Questions

The report also said that Lerner learned in early 2012 that the IRS sent letters to applicants seeking nonprofit status that asked “unnecessary, burdensome questions,” including asking groups to identify their donors and issues important to them.

The report says Lerner on Feb. 29 “stopped any more additional information request letters from being issued” until a review could be conducted and new guidelines could be issued. Lerner’s senior technical advisor conducted the review. On April 25, 2012, the internal review turned up evidence of what the IG report called “a list of troubling questions.” Lerner’s office identified seven “unnecessary” questions, including requests to identify donors and policy issues important to the group, the report says.

Ultimately, the IG report said that it reviewed the case file information for 170 organizations that received such letters and found that 58 percent “had received requests for information that was later deemed unnecessary” by Lerner’s office.

The IRS at the time didn’t disclose the existence of any of these problems, but there were news stories in which conservative groups complained about the questionnaires. In response to news accounts, the House Committee on Oversight and Government Reform wrote to Lerner on March 27, 2012. The House letter provided Lerner with a list of questions that the IRS sent to conservative groups and asked her to justify them. IRS questions contained in the letter included requests that the groups disclose donor information and identify policy issues important to them

At this point, Lerner’s office had completed its review and was aware of the extent of the problem, and Lerner herself had taken steps to address it. But she made no mention of it in her May 4, 2012 response to the committee. Instead, she explained to the committee that IRS sends such letters “in the ordinary course of the application process.”

In her recent conference call with reporters, Lerner acknowledged the letters sent to groups “were far too broad and they included things like asking for the organization’s donor list, which generally is not what we do.”

Heavy Workload to Blame?

Lerner cited a heavy workload as a reason for developing the inappropriate criteria. In her May 10 conference call with reporters, Lerner said applications for 501(c)(4) nonprofit status had “more than doubled,” from 1,500 in 2010 to over 3,400 in 2012.

That’s true, but the inspector general’s report shows that development of the “inappropriate criteria” began in March 2010 and there was a slight decline in 501(c)(4) applications in the fiscal year that ended Sept. 30, 2010. The report said there were 1,751 applications for 501(c)(4) organizations in fiscal 2009 and 1,735 in fiscal 2010.

The IG timeline and report says that all these actions were taken before the end of fiscal 2010 and, subsequently, before there was an increase in 501(c)(4) applications:

March-April 2010: The Determinations Unit began searching for other requests for tax exemption involving the Tea Party, Patriots, 9/12, and I.R.C. § 501(c)(4) applications involving political sounding names, e.g., “We the People” or “Take Back the Country.”

June 2010: Determinations Unit began training its specialists on issues to be aware of, including Tea Party cases.

July 2010: Determinations Unit management requested its specialists to be on the lookout [BOLO] for Tea Party applications.

August 2010: First BOLO listing issued with criteria listed as ‘…various local organizations in the Tea Party movement … applying for exemption under 501(c)(3) or 501(c)(4).’

Acting IRS Commissioner Steven Miller, who has resigned from his position effective next month, also cited an increase in 501(c)(4) applications during his May 21 testimony before the Senate Finance Committee. He said such applications doubled and cited the Citizens United court case decided Jan. 21, 2010 that allowed labor groups and corporations to spend an unlimited amounts of money to influence political campaigns.

IRS records show there was an increase over time, but neither Lerner nor Miller provided evidence that there was a significant spike less than two months after the Citizens United decision when the IRS first started to single out tea party and other conservative groups by name for review.

Did Miller Mislead Congress?

During the May 17 hearing, Republican Rep. Charles Boustany accused Miller of misleading Congress in his previous testimony and letters to the Ways and Means oversight subcommittee.

Boustany, May 17: Why did you mislead Congress and the American people on this?

Miller: Mr. Chairman, I did not mislead Congress nor the American people. I answered the questions as they were asked.

Who’s right? Let’s first examine what Miller knew and when he knew it.

He was asked at the May 17 hearing when he was made aware of the targeting — a word he takes issues with because he says it is a “loaded term.” He said he learned of it in March 2012 through media accounts. At the time, Miller was the Deputy Commissioner for Services and Enforcement. Miller said, and the IG report confirms, he sent a team of IRS staffers from Washington, D.C. to Ohio to investigate in late March 2012.

Miller testified (43 minute mark) that he was aware of problems with processing applications at that time, but he said he did not know about the BOLO list until he got a report back on May 3, 2012 that outlined the extent of the problem, including requests for what the IRS and IG deemed “unnecessary” information and “inappropriate criteria.”

“I thought there were problems with the processing of the cases,” he said. “They came back with both pieces. Yes, there were problems with processing cases and there were problems with the listing.”

More than two months after learning the scope of the problem, Miller appeared before the Ways and Means’ oversight subcommittee on July 25, 2012. At that hearing, Rep. Kenny Marchant opened his line of questioning by saying he wanted to “focus on some of the smaller local groups that are claiming tax‑exempt status.” He cited complaints of harassment and then asked Miller, “What kind of letter or action is taking place at this time that you are aware of?” Miller did not disclose problems he knew existed.

Miller responded by talking about how the agency works to “ensure consistency” in determining nonprofit status and that the process for approving applications was slowed by groups that don’t understand the rules.

Here is an excerpt of that exchange, from the subcommittee transcript:

Marchant, July 25, 2012: I have been contacted by several of the groups in my district. And they feel like they are being harassed. I don’t have any evidence that that is the case. But they feel like they have been harassed and feel like the IRS is threatening them with some kind of action or audit. What kind of a letter or action is taking place at this time that you are aware of?

Miller: So if we are talking about social welfare organizations, (c)(4)s, 501(c)(4)s, then we did receive quite a few.  We received an uptick, an increase in the number of (c)(4) organizations that were advocacy organizations, they were advocating on various things, which is a fine thing for a 501(c)(4) to do. It is politics that isn’t really considered to be appropriate 501(c)(4) behavior past a certain threshold because they can do politics. And what is politics also, Congressman, is, you know, it may not be what you and I would think of politics as; it is politics under the Internal Revenue Code, which is really campaign intervention. It is endorsing or arguing against a particular candidate for public office, that is politics.

So you know I am aware that there is an uptick of organizations that came into us for exemption. So it was the determination letter process, not the examination process.

I am aware that some 200 501(c)(4) applications fell into this category. We did group those organizations together to ensure consistency, to ensure quality. We continue to work those cases.

My understanding, Congressman, is something over 50 of the 200 have received exemption already, more will. But many of these organizations fall into the category that I was talking about with Congresswoman Jenkins, where they are very small organizations and they are not quite sure what the rules are, and so we are working with them to ensure that they understand what the rules are. It is my hope that some of the noise that we heard earlier this year has abated as we continue to work through these cases.

Miller clearly had more information he could have shared but didn’t.

‘Absolutely No Targeting’

One of the clearest cases of providing false information came from the IRS commissioner at the time, George Shulman, an appointee of President George W. Bush.

At a March 22, 2012 hearing of the Ways and Means oversight subcommittee, Shulman was asked about reports of conservative groups being targeted and he assured the subcommittee that “there is absolutely no targeting.”

Boustany, March 22, 2012: Can you give us assurances that the IRS is not targeting particular groups based on political leanings?

Shulman: Thanks for bringing this up. I think there has been a lot of press about this and a lot of moving information. I appreciate the opportunity to clarify. First, let me start by saying yes, I can give you assurances….

What has been happening has been the normal back and forth that happens with the IRS. None of the alleged taxpayers, and obviously, I cannot talk about individual taxpayers, and I am not involved in these, are in an examination process. They are in an application process, which they moved into voluntarily.

There is absolutely no targeting. This is the kind of back and forth that happens when people apply for 501(c)(4) status.

That’s obviously false.

On May 21, Shulman testified before the Senate Finance Committee, along with Miller and Treasury Inspector General for Tax Administration J. Russell George. Shulman said that he learned “sometime in the spring of 2012″ that “there was a list that was being used” to identify political groups for further review and that the term “tea party” was on the list. But, he added, that he did not know “the scope and severity of the list,” and he “did not have a full set of facts” until the IG report was issued earlier this month.

Sen. Orrin Hatch said that Shulman should have “corrected the record and you should have done it long before today.”

– Eugene Kiely and Lori Robertson

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IRS Not So ‘Independent’ http://www.factcheck.org/2013/05/irs-not-so-independent/ Thu, 16 May 2013 17:45:10 +0000 http://factcheck.annenbergpublicpolicycenter.org/?p=75311 The Internal Revenue Service is not exactly an “independent agency,” as President Obama claimed during a May 13 press conference. In fact, it is a bureau of the Treasury Department, an executive agency within the federal government. And it is the president who nominates the head or chief executive of the IRS, and who has the authority to remove the individual in that post at his or her will.

Obama spoke of the agency’s supposed independence as he responded to questions about the IRS’ admission that it investigated conservative political groups enjoying tax-exempt status during the 2012 election cycle.

Obama, May 13: If, in fact, IRS personnel engaged in the kind of practices that had been reported on and were intentionally targeting conservative groups, then that’s outrageous and there’s no place for it. And they have to be held fully accountable, because the IRS as an independent agency requires absolute integrity, and people have to have confidence that they’re applying it in a non-partisan way — applying the laws in a non-partisan way.

Jay Carney, the White House press secretary, had previously called the IRS “an independent enforcement agency with only two political appointees,” during a press briefing on May 10. But as the New York Times and the Wall Street Journal have both pointed out, the IRS is not a completely “independent agency.”

Not even the USA.gov Web page on “Independent Agencies and Government Corporations” lists the IRS. And that’s the site to which the White House’s own Web page on “Federal Agencies & Commissions” directs visitors.

The Commissioner of Internal Revenue heads the IRS and is nominated by the president and confirmed by the Senate. And, in its own words, the IRS says that it was “organized to carry out the responsibilities of the secretary of the Treasury under section 7801 of the Internal Revenue Code.” Plus, the commissioner reports to the secretary of the Treasury via the deputy secretary.

At least one way that federal law attempts to remove partisanship from the IRS is through the use of five-year terms for its commissioner that overlap the four-year presidential election cycles. And as Carney indicated, the only other political appointee in the agency besides the commissioner is the IRS chief counsel, who “provides legal guidance and interpretive advice to the IRS, Treasury and to taxpayers.”

The law also prohibits the president, vice president and members of their executive office staff from requesting “directly or indirectly, any officer or employee of the Internal Revenue Service to conduct or terminate an audit or other investigation of any particular taxpayer with respect to the tax liability of such taxpayer.”

But federal law also says that the IRS commissioner can be removed from the position “at the will of the president.” That can’t be done to the heads of some other actual “independent” agencies without a reason.

For example, the chairman of the National Labor Relations Board — which is listed on the USA.gov Web page — can “be removed by the President, upon notice and hearing, for neglect of duty or malfeasance in office, but for no other cause.” Likewise, members of the Federal Reserve Board, another independent agency, can only be removed “for cause.” And the law outlining the organization of the Federal Maritime Commission says that the president may only “remove a Commissioner for inefficiency, neglect of duty, or malfeasance in office.”

Obama proved this very point on May 15, when he said that he had directed Treasury Secretary Jack Lew to review the matter and then Lew requested and accepted the resignation of the acting IRS commissioner, Steve Miller. It has been reported that Miller was aware of the agency’s targeting of conservative political groups and chose not to disclose it to members of Congress.

Obama added that the administration would “put in place new safeguards to make sure this kind of behavior cannot happen again,” and that the Treasury secretary would “ensure the IRS begins implementing the [Treasury Inspector General for Tax Administration's] recommendations right away.”

– D’Angelo Gore

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Group’s ‘Obamacare Tax Form’ Evades Facts http://www.factcheck.org/2012/11/groups-obamacare-tax-form-evades-facts/ Fri, 16 Nov 2012 21:30:36 +0000 http://wpress.bootnetworks.com/?p=71350 A conservative group misleads taxpayers on the Affordable Care Act and the Internal Revenue Service’s future role in enforcing it. Americans for Tax Reform posted a “projected” IRS tax form on its website that claims to “help families and tax specialists prepare” for new tax provisions under the health care law. But ATR makes several false claims:

  • The group claims taxpayers will have to disclose “personal identifying health information” to the IRS to prove they have insurance. It quotes an IRS official who said taxpayers will report their “insurance information.” But the official also said the agency will not collect “any personal health information.”
  • ATR says employers must offer preventative coverage that includes “abortion and hair loss treatment.” That’s not true. The law requires smaller insurance plans to cover preventative services, but states decide if those services include abortion. Even then, each state must have at least one plan that does not cover abortion.
  • The group says failing to comply with the law could result in “interest against your property.” The law specifically bans the IRS from filing liens and levies against persons who fail to pay the tax for lacking insurance.
  • ATR claims taxpayers can apply for a waiver from the health care law. That’s false. The government has given temporary waivers to some companies — not taxpayers — regarding one provision of the law, which involves benefit caps.

ATR says it created the tax form — just days before the presidential election — as a ”service to the public.” Our public service is to correct the record.

Not Getting Personal

Starting in 2014, the health care law requires most Americans to have insurance or pay a tax, although exemptions will apply based on income and other factors. The IRS will require most taxpayers to prove they’re covered or they must pay a tax on their 2014 tax returns.

The IRS hasn’t issued exact procedures for how taxpayers will prove they have insurance. But that hasn’t stopped ATR from making misleading statements.

In an introduction to the tax form and in the instructions, ATR claims the IRS will require Americans to disclose:

  • “Personal identifying health information”
  • “The nature of their health insurance”
  • “Insurance card information”

ATR bases its claim on a snippet of congressional testimony from then-IRS deputy commissioner Steven Miller in September. ATR quotes from Miller’s prepared remarks, in which he stated that “taxpayers will file their tax returns reporting their health insurance coverage and/or making a payment.”

But Miller explicitly stated that the IRS will not collect “any personal health information.”

Miller, Sept. 11: Taxpayers will get a form at the end of every year from their insurer to use when they prepare their tax returns. It is important to note that the information that insurers provide to the IRS will show the fact of insurance coverage, and will not include any personal health information.

In most cases, taxpayers will file their tax returns reporting their health insurance coverage, and/or making a payment, and there will be no need for further interactions with the IRS.

Douglas Shulman, who recently stepped down as IRS commissioner, also addressed privacy concerns. He told Congress in August that the IRS will verify whether or not a taxpayer has insurance. But he said the agency will not ask for personal information (See part 2, minute 40:00).

U.S. Rep. Danny K. Davis, Aug. 2: There are also individuals who … claim that the Internal Revenue Service is going to have access to individuals’ private health information. Is that a need in order to enforce the provisions of the act?

Shulman: No. Absolutely not. What we will know is and ask for based on the law is: ‘Do you have health insurance coverage? If so, for how many months? And what is the name of the insurance company?’…

I think it’s been way overstated our role in health care. We are basically going to facilitate the financial transactions that make this whole law work. But we’re not going to have access to private individual health care information except for the fact of coverage.

Shulman said the IRS will match the information a taxpayer submits to what his or her insurer reports (see minute 9:00).

He also explained in a speech at the National Press Club in 2010 that taxpayers will attach a form to their tax return that insurers will send to them.

Shulman, April 5, 2010: When someone files their return, the insurance company will send us a little box that is checked, a yes-no question, that says, ‘Do they have coverage or not?’ They’ll send it to the individual. The individual will attach it to their return, and they’ll send it to us. Think it’s just like a 1099, where you get information reporting about the interest that you have on the bank account.

We will run matching programs around that. And if somebody doesn’t have coverage, they’ll either have paid the penalty that they owe, or they’ll get a letter [from] us saying that you owe this amount.

The IRS hasn’t officially announced procedures for how taxpayers will prove they have insurance. None is listed on the IRS’s web page dedicated to Affordable Care Act tax provisions. But the IRS proposed in April the types of information insurers must submit to the IRS in 2015 — and they don’t include personal health details.

The agency proposed asking insurers for the following:

  • The name, address and Social Security Number or Tax Identification Number of the taxpayer and any dependents.
  • Dates the insurer provided coverage.
  • Whether the insurance is considered “qualified” under the law, which means it covers a number of broadly defined health benefits, among other requirements.
  • Whether the individual bought insurance through an affordable insurance marketplace, known as a health insurance exchange.
  • Whether the individual is eligible for tax credits and other assistance to help pay for coverage.

Abortion Coverage Required?

ATR claims employers must offer preventative coverage that includes “abortion and hair loss treatment.” That’s not true.

The law requires preventative coverage in insurance plans sold to small businesses and individuals. But the states define what that coverage is.

Some states already have laws banning abortion coverage — although some extend exemptions in cases of rape, incest or to save the life of the mother. Others states have chosen to include voluntary abortion coverage in plans offered to small businesses and individuals. But even then, the health care law requires those states to offer an additional plan that does not cover abortion.

ATR’s tax form asks taxpayers if their employer offers “affordable qualifying coverage.” And the instructions for this question claim that a qualified plan “must include necessary preventative coverage such as contraception, abortion, and hair loss treatment.”

It’s true the ACA specifically requires most health insurance plans to pay for contraception for women, coverage that at least 26 states mandated to some extent before the health care law. And it’s true the law includes new coverage requirements for preventative services. But those requirements apply to new insurance plans sold to individuals and small businesses that have 50 or fewer employees. The requirements do not apply to large employers, which make up about 70 percent of the insurance market.

The act’s intent is to make coverage sold to individuals and small businesses as comprehensive as typical employer-based plans. So, the law requires the smaller plans to cover 10 broadly defined “essential health benefits,” one of which is “preventative and wellness services.”

The ACA allows the states to define what those preventative services are in “benchmark” insurance plans.

The benchmark plans in KansasKentucky and Utah, for example, do not cover voluntary abortion beyond at least one of the exceptions for rape, incest or to save the mother’s life. In fact, those states — and five others — outlawed private and public insurance from covering voluntary abortions before the ACA became law.

And 20 states have banned insurers from covering abortion in plans sold on exchanges, the affordable insurance marketplaces that states and/or the federal government are supposed to set up under the health care law.

States including California, Colorado and New York have picked benchmark plans that cover “voluntary” or “elective” abortions.

California’s plan, for example, requires a $30 copay for a “voluntary termination of pregnancy.”

But as we’ve written before, the law requires that at least one plan sold on a state exchange not include abortion coverage beyond the standard exceptions. (The law also bars federal subsidies from directly paying for a voluntary abortion.)

None of the benchmark plans in the six states mentioned above covers cosmetic hair loss treatment.

No Liens or Levies

The form also claims that “failing to comply with the Obamacare Tax Mandate could result … in interest against your personal property.” That’s not true.

As we’ve written before, the IRS cannot file a tax lien (a legal claim against such things as homes, cars, wages and bank accounts) or a levy (seizure of property or bank accounts).

The law specifically states on page 151 that the government cannot “file notice of lien with respect to any property of a taxpayer by reason of any failure to pay the penalty imposed by this section, or … levy on any such property with respect to such failure.’’

But as we noted, the law leaves room for the IRS to issue penalties and to sue to recover the unpaid tax, just as it does now for overdue taxes.

Waiver Whopper

The form’s instructions page also claims that taxpayers “can apply to the Secretary of the Department of Health and Human Services for a waiver from Obamacare.”

We’ve addressed similar claims before. The fact is HHS gave temporary waivers to companies — not individual taxpayers — pertaining to one provision of the law.

The health care law will gradually eliminate the annual and lifetime dollar limits placed on insurance benefits. The law raises the limits each year until 2014, when health plans can no longer place a cap on benefits.

HHS has granted waivers to more than 1,200 companies, particularly restaurants with low-income and part-time employees. The waivers allowed companies such as McDonald’s to temporarily continue to provide bare-bones insurance coverage to some workers.

The waivers, which affect nearly 4 million people, expire in 2014.

– Ben Finley

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FactChecking Paul http://www.factcheck.org/2011/05/factchecking-paul/ Fri, 20 May 2011 13:58:03 +0000 http://wpress.bootnetworks.com/?p=40671 Up next in our look at past claims made by the 2012 presidential candidates: Rep. Ron Paul. No stranger to presidential campaigns, the Texas Republican has made his share of factual flubs. Paul declared his 2012 candidacy May 13.

  • He falsely claimed last December that the estate tax "especially harms small and family-owned businesses." But if the estate tax was returned to 2009 levels, less than 8 percent of estates taxed in 2011 would be family farms and businesses, according to the Tax Policy Center. The tax deal struck by President Barack Obama and congressional Republicans would affect 440 such estates, more than half of which are worth more than $20 million each. Paul also said that the estate tax was "double taxation." That's only the case for cash that had been taxed when it was earned as income. Investments, such as stocks, bonds and real estate, would not have been taxed before, if they had not been sold prior to the owner's death.
  • He made the wild claim that "16,500 armed bureaucrats" from the IRS would enforce the mandate that everyone have health insurance. That figure came from a partisan analysis based on false assumptions. Plus, the IRS will mainly distribute tax credits, not enforce penalties. And "armed"? Very few, if any, new hires would actually carry guns. As of 2009, the IRS had only 2,725 (3 percent of all employees) who were "special agents," sworn law enforcement officers assigned to criminal cases and authorized to carry guns. The health care law also bans criminal penalties for those not abiding by the mandate.
  • In the 2008 campaign, Paul pushed the bogus conspiracy theory that government bureaucrats and foreign corporations were plotting a "NAFTA Superhighway" and the creation of a North American Union with a single currency. It's all a myth.
  • He also claimed in the last presidential race that the U.S. had a "$1 trillion foreign operation" to maintain "our empire." But his $1 trillion figure included all defense spending, plus half of NASA's funding, medical and retirement pay for veterans, the U.S. Border Patrol, airport security, the issuing of passports, cargo inspections, the FBI's counter-terrorism unit, and 92 percent of interest payments on the debt, among other items.

Paul's libertarian views have attracted a fervent following. He's running for president for the third time.

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IRS and the Health Care Law, Part II http://www.factcheck.org/2011/02/irs-and-the-health-care-law-part-ii/ Fri, 18 Feb 2011 23:02:52 +0000 http://wpress.bootnetworks.com/?p=36421 Q: Is the IRS seeking more than 1,000 new workers to administer the new health care law?

A: Yes. But many of them will be needed to deliver tax credits, not dun taxpayers. IRS says it needs 291 agents to enforce the law, including 193 to "ensure accurate delivery of tax credits."

FULL QUESTION

Dear FactCheck: Can you verify this statement in the article at US News and World Report that the IRS "will need an battalion of 1,054 new auditors and staffers and new facilities at a cost to taxpayers of more than $359 million in fiscal 2012 just to watch over the initial implementation of President Obama’s healthcare reforms."

FULL ANSWER

The IRS is actually asking for more new workers than reported in an article by U.S. News and World Report — a story that has generated a lot of Internet buzz after being picked up by news outlets, such as Fox News and The Daily Caller. The IRS budget request for fiscal year 2012 shows that the agency is seeking at least 1,269 full-time equivalent employees (FTEs) at a cost of $473 million to help implement the Patient Protection and Affordable Care Act.

But many of them are needed to deliver new tax credits, not to dun taxpayers. The agency is seeking to add 291 "revenue agents" — most of them (193) to "ensure accurate delivery of tax credits." The agency’s technology staff would see the biggest increase with the addition of 537 IT program analysts and specialists.

Still, Republican Sen. John Barrasso of Wyoming mischaracterized the IRS budget request in an interview on Fox News, falsely suggesting that all of the new hires will be auditing taxpayers.

Barrasso, Feb. 16: We don’t need a thousand new IRS agents who are now going to audit Obamacare.

That’s ridiculous. Yes, the IRS budget request lists 1,054 FTEs under the category of "enforcement initiatives" — which is the number cited by U.S. News. And, yes, the IRS wants 58 agents to enforce the new tanning salon tax, which took effect in 2010. But the 1,054 figure also includes 504 new hires to "ensure accurate delivery of tax credits." The law, among other things, provides tax credits for small businesses to offer coverage to their employees, beginning in April 2010.

Here are the areas, as defined by the IRS, where the new 1,269 FTEs will be needed (see pages 21 through 66):

  • Improve Taxpayer Service, 150
  • Increase Coverage to Address Tax Law Changes and Other Compliance Issues, 363
  • Ensure Accurate Delivery of Tax Credits, 504
  • Administer New Statutory Reporting Requirements, 187
  • Implement Individual Coverage Requirement and Employer Responsibility Payments, 65

Now, the 159-page budget document shows that the IRS is seeking a total of 5,112 new workers — including 1,653 that are needed to carry out the president’s fiscal year 2011 policies. That’s because Congress so far has failed to pass a budget for fiscal year 2011, which began Oct. 1, 2010. The IRS budget request does not provide any details on exactly what those 1,653 new hires would do. We asked the IRS and Treasury if any of them are needed to implement the health care law. In a Feb. 23 e-mail, Treasury spokeswoman Sandra Salstrom told us that those employees would not be needed to implement the health care law — although she wouldn’t rule it out.

Salstrom, Feb. 23: I can’t say for certain that NONE of the 1,653 FTEs under "adjustments to reach FY2011 President’s Policy Level" will be needed to implement the ACA [Affordable Care Act], but our budget experts said these are not for implementing the ACA and are instead just in general to get IRS to the staffing levels they need from 2010 to 2012.

Also, it is worth noting that the IRS isn’t the only federal agency that needs to hire new workers as a result of the health care law. The Treasury Inspector General for Tax Administration requested 29 new workers to carry out its responsibility to oversee the IRS implementation of the health care law. That will cost another $5.6 million.

On the other hand, it is likely that the IRS won’t need the 82 employees it requested to carry out a provision of the law that requires businesses to report the purchase of any goods worth more than $600. President Obama called it "a flaw in the legislation," and the Republican-controlled House appears poised to eliminate it.

As we have seen before, the increased staffing needed at the IRS to administer the many tax changes in the health care law has generated a lot of misinformation. In March 2010, we debunked Rep. Ron Paul’s false claim that the IRS would hire "16,500 armed bureaucrats" to enforce the law. We called his statement "wildly inaccurate." Now we know exactly how wild and inaccurate it is.

Update, Feb. 23: In an earlier version, we said that we would update this post if we got more information regarding the IRS request to hire an additional 1,653 FTEs to carry out the president’s fiscal year 2011 policies. We did get a response from Treasury spokeswoman Sandra Salstrom and we updated this post to reflect her comments.

– Michael Morse, Eugene Kiely and Lauren Hitt

Sources

Bedard, Paul. "Healthcare Reform Law Requires New IRS Army Of 1,054." U.S. News and World Report. 15 Feb 2011.

U.S. Treasury. "Internal Revenue Service FY 2012 Budget Request Congressional Budget Submission." 14 Feb 2011.

Patient Protection and Affordable Care Act. Pub. L. 111-148. 23 Mar 2010.

"Report: IRS to hire 1,054 new staffers for health care law." Fox News. 16 Feb 2011.

IRS. "Small Business Health Care Tax Credit for Small Employers." Updated 7 Dec 2010, accessed 18 Feb 2011.

U.S. Treasury. "FY 2012 Departmental Summary." Undated, accessed 18 Feb 2011.

White House. "State of the Union." 25 Jan 2011.

Rubin, Richard. "U.S. House May Cancel Tax-Reporting Rules in Health-Care Law Next Month." Bloomberg News. 18 Feb 2011.

IRS. "Affordable Care Act Tax Provisions." Updated 17 Feb 2011, accessed 18 Feb 2011.

Jackson, Brooks. "IRS Expansion." FactCheck.org. 30 Mar 2010.

Salstrom, Sandra, spokeswoman, Department of Treasury. E-mail sent to FactCheck.org. 23 Feb 2011.

 

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