No Criminal Charges For Lois Lerner (Or Her Emailing Dog). What IRS Targeting?

President Obama’s Justice Department wrote a letter to members of Congress announcing that Lois Lerner is safe from criminal charges of any kind. Her email writing dog is too, it would seem. The DOJ says sure, there was mismanagement, poor judgment, even institutional inertia! Hey, this is the IRS, after all. It may have looked like targeting. But this was just poor management.

There was no evidence, said the DOJ, that any IRS official acted based on political, discriminatory, corrupt, or other inappropriate motives. Of course, Ms. Lerner has had a bit of history, including at the Federal Election Commission, before she moved on to IRS targetingbut no one is perfect. The disparate impact on the tea party? Well, that was mishandling. At the heart of the IRS targeting scandal, Lois Lerner was handsomely rewarded while she presided over alleged discrimination against conservative nonprofits. 

In fact, records revealed that she received $129,000 in bonuses between 2010 and 2013, averaging $43,000 a year—on top of her regular salary. Ms. Lerner even came off like a kind of hero in the DOJ report. She did, after all, step forward to bring this whole issue up! Let’s give credit where it is due. Remember, it was Ms. Lerner that planted and then answered the planted question at an American Bar Association meeting. Of course, many Republicans are still upset about all this. Sure, Lois Lerner got one and now two passes from the Obama Justice Department.

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But like the one about the spontaneous demonstration in response to a video, the story seems to stick. For more than two years, President Obama denied there was any IRS problem, quipping that there is not a smidgen of corruption at the IRS. Any missteps were innocent, entirely the fault of bonehead decisions in local offices. On his final Daily Show appearance, President Obama capped a tour de force:

You’ve got this back office, and they’re going after the Tea Party. Well, it turned out, no, Congress had passed a crummy law that didn’t give people guidance in terms of what it was they were trying to do. They did it poorly and stupidly. The truth of the matter is that there was not some big conspiracy there. They were trying to sort out these conflicting demands. You don’t want all this money pouring through non-for-profits, but you also want to make sure everybody is being treated fairly.”

Inconveniently, IRS documents revealed Lois Lerner’s email warning IRS staffers of the pitfalls of revealing too much information to Congress. Forget email, use instant messaging system that automatically deletes. House Oversight Committee documentation suggests that IRS officials used it deliberately to evade public scrutiny. Last time, 24 Republicans sent a letter to Attorney General Loretta Lynch, who replaced Eric Holder as the nation’s top law enforcement officer. It was unlikely that the new AG would stray fro the narrative, despite the letter to Ms. Lynch.

The AG stayed true to Mr. Holder’s legacy. There was no smidgen of corruption, after all. If you were targeted by the IRS, you may have thought that Lois Lerner just might face charges. Congress found her in contempt after she professed her innocence, and thereafter took the Fifth. Much later, she broke her silence to Politico, saying she did nothing wrong, claiming that she was the victim.

The IRS scandal broke in May 2013, but started in January 2010. That’s when the Supreme Court found it unconstitutional in Citizens United to ban free speech by corporations, unions and other organizations. In August 2010, the IRS distributed a list asking for extra scrutiny for Tea Party organizations applying for tax exempt status. Lerner even met with the DOJ about prosecuting conservative groups.

Amid reports of targeting, former IRS Commissioner Shulman testified there was “absolutely no targeting” of conservative or Tea Party organizations by the IRS. Mr. Shulman then stepped down as Commissioner, replaced by Steven Miller. On May 10, 2013, during a bar meeting, Ms. Lerner admitted targeting, calling it “absolutely incorrect, insensitive, and inappropriate.” Four days later, on May 14, 2013, the Inspector General issued a report confirming the targeting.

The next day, Acting IRS Commissioner Steven Miller resigned. Ms. Lerner professed her innocence, then took the Fifth. She was placed on administrative leave, and shortly thereafter retired with full pension. The House held Ms. Lerner in contempt of Congress. Only then–on June 13, 2014, Friday the 13th–did the IRS first say it lost Lerner’s emails from 2009 to 2011. The IRS said hard drives and backups were destroyed, spending millions to try to recover them. Republicans were repeatedly accused of wasting money on all of this, since the IRS was above reproach. There was no smidgen of corruption, after all.

With Ms. Lerner’s last laugh, it sure seems clear there is still no smidgen, no iota. In fact, as Ms. Lerner told Politico, she was the victim here. That’s the narrative. Got it?

For alerts to future tax articles, email me at Wood@WoodLLP.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.

via The Tax Lawyer http://ift.tt/1i1yizA

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