A recent public apology by the Internal Revenue Service for inappropriately targeting tea party groups for extra scrutiny has given way to speculation that the agency is possibly trying to head off a bigger scandal.
Niger Innis, chief strategist for TheTeaParty.net, one of dozens of conservative groups whose tax-exempt status has been delayed, suspects there could be more brewing.
“It could be that there were communications and affiliation between high levels of the IRS and the Obama administration or the Obama campaign,” Innis said during a telephone interview on Monday. “That is quite possible. … We could find that some of these IRS officials actually volunteered for the Obama campaign or were involved in the Obama campaign.”
Innis said these are speculations but that he is waiting so see what the congressional investigation will find.
“Those are the types of things that would be a bombshell against the administration,” he said. “And quite frankly, I see no reason that the IRS would come out and preemptively apologize unless there was something bigger they were trying to make sure does not embarrass them.”
The IRS admitted on Friday that it singled out applications with the words “tea party” or “patriots” in their names. The agency apologized and said it applied more scrutiny to the tea party-affiliated groups because of their request for tax-exempt status. Some of those groups were asked to release the names of their donors, something they are not required to do.
The IRS left the handling of these 501 (c) (4) applications to low-level employees in the Cincinnati, Ohio, office, because the number of tax-exempt applications doubled to 3,400 from 2010 to 2012. The revenue agency told the media that about 300 groups were subjected to additional scrutiny but that this was not a politically motivated action.
Lois Lerner, who heads the IRS tax-exempt organizations division, on Friday called the action by low-level workers “absolutely inappropriate.” She admitted to the media that the employees chose groups based on their names, among other things.
The Treasury Inspector General for Tax Administration is expected to release a report on the matter later this week.
“I view this as the IRS knowing that the inspector general report was coming out,” said Chip Watkins, an attorney at Webster, Chamberlain & Bean, who has clients whose applications have been affected. “And I view Ms. Lerner's statement on Friday as an attempt to get out in front of that.”
Watkins said he doubts Lerner anticipated the reaction.
“They've lost control of the story,” he said, adding that so far there has been nothing to suggest direction by anyone outside of the IRS.
If the investigation finds otherwise, Watkins said it would increase pressure to move the IRS out from under the Treasury Department.
“Whether it's necessary or not remains to be seen,” he said. “And that would be entirely up to Congress.”
President Barack Obama said on Monday the agency will be held accountable if there is truth behind the IRS’s targeting of conservative groups based on political leaning. He said the public needs to have the confidence that the agency is applying the law in a nonpartisan way.
“There’s no place for it,” the Obama administration said at a press conference. “And they have to be held fully accountable.”
Lawmakers in the House Ways and Means Committee will conduct a hearing Friday. The committee has since demanded that the IRS turn over all communication with the words “tea party” and “patriots” and the names of all those involved.
In the meantime, Innis said his organization is looking at possibly filing a class action lawsuit against the IRS. TheTeaParty.net is also calling for a special prosecutor to deal with the issue.
“Do not take the establishment media’s unfair and relentless attacks against the tea party and disconnect it from what happened with the IRS,” he said. “A signal was sent with popular culture, which is defined by the establishment media, and the IRS just followed that signal that was sent.”