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How the IRS’s Nonprofit Division Got So Dysfunctional

The IRS division responsible for flagging Tea Party groups has long been an agency afterthought, beset by mismanagement and financial constraints.

Treasury Inspector General for Tax Administration J. Russell George (left) and Former Acting IRS Commissioner Steve Miller testify before the House on Friday. (Alex Wong/Getty)

May 18: This post has been corrected.

The IRS division responsible for flagging Tea Party groups has long been an agency afterthought, beset by mismanagement, financial constraints and an unwillingness to spell out just what it expects from social welfare nonprofits, former officials and experts say.

The controversy that erupted in the past week, leading to the ousting of the acting Internal Revenue Service commissioner, an investigation by the FBI, and congressional hearings that kicked off Friday, comes against a backdrop of dysfunction brewing for years.

Moves launched in the 1990s were designed to streamline the tax agency and make it more efficient. But they had unintended consequences for the IRS’s Exempt Organizations division. 

Checks and balances once in place were taken away. Guidance frequently published by the IRS and closely read by tax lawyers and nonprofits disappeared. Even as political activity by social welfare nonprofits exploded in recent election cycles, repeated requests for the IRS to clarify exactly what was permitted for the secretly funded groups were met, at least publicly, with silence.

All this combined to create an isolated office in Cincinnati, plagued by what an inspector general this week described as “insufficient oversight,” of fewer than 200 low-level employees responsible for reviewing more than 60,000 nonprofit applications a year.

In the end, this contributed to what everyone from Republican lawmakers to the president says was a major mistake: The decision by the Ohio unit to flag for further review applications from groups with “Tea Party” and similar labels. This started around March 2010, with little pushback from Washington until the end of June 2011.

“It’s really no surprise that a number of these cases blew up on the IRS,” said Marcus Owens, who ran the Exempt Organizations division from 1990 to 2000. “They had eliminated the trip wires of 25 years.”

Of course, any number of structural fixes wouldn’t stop rogue employees with a partisan ax to grind. No one, including the IRS and the inspector general, has presented evidence that political bias was a factor, although congressional and FBI investigators are taking another look.

But what is already clear is that the IRS once had a system in place to review how applications were being handled and to flag potentially problematic ones. The IRS also used to show its hand publicly, by publishing educational articles for agents, issuing many more rulings, and openly flagging which kind of nonprofit applications would get a more thorough review.

All of those checks and balances disappeared in recent years, largely the unforeseen result of an IRS restructuring in 1998, former officials and tax lawyers say.

“Until 2008, we had a dialogue, through various rulings and cases and the participation of various IRS officials at various ABA meetings, as to what is and what is not permissible campaign intervention,” said Gregory Colvin, the co-chair of the American Bar Association subcommittee that dealt with nonprofits, lobbying, and political intervention from 1991 to 2009.

“And there has been absolutely no willingness in the last five years by the IRS to engage in that discussion, at the same time the caseload has exploded at the IRS.”

The IRS did not respond to requests for comment on this story.

Social welfare nonprofits, which operate under the 501(c)(4) section of the tax code, have always been a strange hybrid, a catchall category for nonprofits that don’t fall anywhere else. They can lobby. For decades, they have been allowed to advocate for the election or defeat of candidates, as long as that is not their primary purpose. They  also do not have to disclose their donors.

Social welfare nonprofits were only a small part of the exempt division’s work, considered minor when compared with charities. When the groups sought IRS recognition, the agency usually rubber-stamped them. Out of 24,196 applications for social welfare status between 1998 and 2009, the exempt organizations division rejected only 77, according to numbers compiled from annual IRS data books.

Into this loophole came the Supreme Court’s Citizens United decision in January 2010, which changed the campaign-finance game by allowing corporate and union spending on elections.

Sensing an opportunity, some political consultants started creating social welfare nonprofits geared to political purposes. By 2012, more than $320 million in anonymous money poured into federal elections.

A couple of years earlier, beginning in 2010, the Cincinnati workers had flagged applications of tiny Tea Party groups, according to the inspector general, though the groups spent almost no money in federal elections.

The main question raised by the audit is how the Cincinnati office and superiors in Washington could have gotten it so wrong. The audit shows no evidence that these workers even looked at records from the Federal Election Commission to vet much larger groups that spent hundreds of thousands and even millions in anonymous money to run election ads.

The IRS Exempt Organizations division, the watchdog for about 1.5 million nonprofits, has always had to deal with controversial groups. For decades, the division periodically listed red flags that would merit an application being sent to the IRS’s Washington, D.C., headquarters for review, said Owens, the former division head.

In the 1970s, that meant flagging all applications for primary and secondary schools in the south facing desegregation. In the 1980s, during the wave of consolidation in the health-care industry, all applications from health-care nonprofits needed to be sent to headquarters. The division’s different field offices had to send these applications up the chain.

“Back then, many more applications came to Washington to be worked — the idea was to have the most sensitive ones come to Washington,” said Paul Streckfus, a former IRS lawyer who screened applications at headquarters in the 1970s and founded the industry publication EO Tax Journal in 1996.

Because this list was public, lawyers and nonprofits knew which cases would automatically be reviewed.

“We had a core of experts in tax law,” recalled Milton Cerny, who worked for the IRS, mainly in Exempt Organizations, from 1960 to 1987. “We had developed a broad group of tax experts to deal with these issues.”

In the 1980s, the division issued many more “revenue rulings” than issued in recent years, said Cerny, then head of the rulings process. These revenue rulings set precedents for the division. Revenue rulings along with regulations are basically the binding IRS rules for nonprofits.

“We would do a revenue ruling, so the public and agents would know,” Cerny said. “Over the years, it apparently was felt that a revenue ruling should only be published at an extraordinary time. So today you’re lucky if you get one a year. Sometimes it’s less than that. It’s amazing to me.”

Other checks and balances had existed too. Not only were certain kinds of applications publicly flagged, there was another mechanism called “post-review,” Owens said. Headquarters in Washington would pull a random sample every month from the different field offices, to see how applications were being reviewed. There was also a surprise “saturation review,” once a year, for each of the offices, where everything from a certain time period needed to be sent to Washington for another look.

So internally, the division had ways, if imperfect, to flag potential problems. It also had ways of letting the public know what exactly agents were looking at and how the division was approaching controversial topics.

For instance, there was the division’s “Continuing Professional Education,” or CPE, technical instruction program. These articles were supposed to be used for training of line agents, collecting and putting out the agency’s best information on a particular topic — on, say, political activity by social welfare nonprofits in 1995.

“People in a group would write up their thoughts: ‘Here’s the law,’” said Beth Kingsley, a Washington lawyer with Harmon, Curran, Spielberg & Eisenberg who’s worked with nonprofits for almost 20 years. “It wasn’t pushing the envelope. It was, ‘This is how we see this issue.’ It told us what the IRS was thinking.”

The system began to change in the mid-1990s. The IRS was having trouble hiring people for low-level positions in field offices like New York or Atlanta — the kinds of workers that typically reviewed applications by nonprofits, Owens said.

The answer to this was simple: Cincinnati.

The city had a history of being able to hire people at low federal grades, which in 1995 paid between $19,704 and $38,814 a year — almost the same as those federal grades paid in New York City or Chicago. (Adjusted for inflation, that’s between $30,064 and $59,222 now.)

“That was well below what the prevailing rate was in the New York City area for accountants with training,” Owens said. “We had one accountant who just had gotten out of jail — that’s the sort of people who would show up for jobs. That was really the low point.”

So in 1995, the Exempt Organizations division started to centralize. Instead of field offices evaluating applications for nonprofits in each region, those applications would all be sent to one mailing address, a post-office box in Covington, Ky. Then a central office in Cincinnati would review all the applications.

Almost inadvertently, because people there were willing to work for less than elsewhere, Cincinnati became ground zero for nonprofit applications.

For the time being, the checks remained in place. The criteria for flagged nonprofits were still made public. The Continuing Professional Education text was still made public. Saturation reviews and post reviews were still in place.

But by 1998, after hearings in which Republican Senator Trent Lott accused the IRS of "Gestapo-like" tactics, a new law mandated the agency’s restructuring. In the years that followed, the agency aimed to streamline. For most of the ‘90s, the IRS had more than 100,000 employees. That number would drop every year, to slightly less than 90,000 by 2012.

Change also came to the Exempt Organizations division.

The IRS tried to remove discretion from lower-level employees around the country by creating rules they had to follow. While the reorganization was designed to centralize power in the agency's Washington headquarters, it didn’t work out that way.

“The distance between Cincinnati and Washington was such that soon Cincinnati became a power center,” said Streckfus, the former IRS lawyer.

Following reorganization, many highly trained lawyers in Washington who previously handled the most sensitive nonprofit applications were reassigned to focus on special projects, he said.

Owens, who left the IRS in 2000 but stayed in touch with his old division, said the focus on efficiency meant “eliminating those steps deemed unimportant and anachronistic.”

In 2003, the saturation reviews and post reviews ended, and the public list of criteria that would get an application referred to headquarters disappeared, Owens said. Instead, agents in Cincinnati could ask to have cases reviewed, if they wanted. But they didn’t very often.

“No one really knows what kinds of cases are being sent to Washington, if any,” Owens said. “It’s all opaque now. It’s gone dark.”

By the end of 2004, the Continuing Professional Education articles stopped.

Recommendations from an ABA task force for IRS guidelines on social welfare nonprofits and politics that same year were met with silence. 

Even the IRS’s Political Activities Compliance Initiative, which investigated complaints of charities engaged in politics — primarily churches — closed up shop in early 2009 after less than five years, without any explanation. 

Both before and after the changes, the Exempt Organizations division has been a small part of the IRS, which is focused on collecting money and chasing delinquent taxpayers.  

IRS employee count in 2012

Rulings and Agreements, the division that handles applications of all nonprofits, accounted for less than 0.5 percent of all IRS employees in 2012.

 

Source: IRS Data Books, IRS Exempt Organizations Annual Report

Of the 90,000 employees at the agency last year, only 876 worked in the Exempt Organizations’ division, or fewer than 1 in 100 employees.

Of those, 335 worked in the office that actually handles applications of nonprofits.  

Most of those — about 300 — worked in Cincinnati, Streckfus estimates. The rest were at headquarters, in Washington D.C.

In Cincinnati, the employees’ primary job was sifting through the applications of nonprofits, making determinations as to whether a nonprofit should be recognized as tax-exempt. In a press release Wednesday, the IRS said fewer than 200 employees were responsible for that work.

In 2012, these employees received 60,780 applications. The bulk of those — 51,748 — were from groups that wanted to be recognized as charities.

But the number of social welfare nonprofit applications spiked from 1,777 in 2011 to 2,774 in 2012. It’s impossible to say how many of those groups indicated whether they would engage in politics, or why the number of applications increased. The IRS said Wednesday that it “has seen an increase in the number of tax-exempt organization applications in which the organization is potentially engaged in political activity,” including both charities and social welfare nonprofits, but didn’t specify any numbers.

Total 501(c)(4) Nonprofit Applications from 2002 to 2012

From 2011 to 2012, applications increased by more than 50 percent.

 

Source: IRS Data Books

On average, one employee in Cincinnati would be responsible for going through roughly one application per day.

Some would be easy — say, a local soup kitchen. But to evaluate whether a social welfare nonprofit has social welfare as its primary purpose, the agent is supposed to use a “facts and circumstances” test. There is no checklist. Reviewing just one social welfare nonprofit could take days or weeks, to look through a group’s website, track down TV ads and so forth.  

“You’ve got 60,000 applications coming through, and it’s hard to do that with the number of agents looking at them,” said Philip Hackney, who was in the IRS’s chief counsel office in Washington between 2006 and 2011 but said he wasn’t involved in the Tea Party controversy. “The reality is that they cannot do that, and that’s why you’re seeing them pick stuff out for review. They tried to do that here, and it burned them.” 

As we have previously reported, last year the same Cincinnati office sent ProPublica confidential applications from conservative groups. An IRS spokeswoman said the disclosures were inadvertent. 

Mark Everson, IRS commissioner for four years during the George W. Bush administration, said he believed the fact that the division is understaffed is relevant, but not an excuse for what happened. “The whole service is under-funded,” he pointed out.

And Dan Backer, a lawyer in Washington who represented six of the groups held up because of the Tea Party criteria, said he doesn’t buy the notion that low-level employees in Cincinnati were alone responsible.

“It doesn’t just strain credulity,” Backer said. “It broke credulity and left it laying on the road about a mile back. Clearly these guys were all on the same marching orders.”

The inspector general’s audit was prompted last year after members of Congress, responding to complaints by Tea Party groups, asked for it.

Like former officials interviewed by ProPublica, the audit suggests that officials at IRS headquarters in Washington were unable to manage their subordinates in Cincinnati. When Lois Lerner, the Exempt Organizations division director in Washington, learned in June 2011 about the improper criteria for screening applications, she instructed that they be “immediately revised.”

But just six months later, Cincinnati employees changed the revised criteria to focus on “organizations involved in limiting/expanding government” or “educating on the Constitution.” They did so “without executive approval.”

“The story people are overlooking is: Congress is complaining about underpaid, overworked employees who are not adequately trained,” said Bryan Camp, a former attorney in the IRS chief counsel’s office.

In the end, after all the millions of anonymous money spent by some groups to elect candidates in 2012, after all the groups that said in their applications that they would not spend money to elect candidates before doing exactly that, after the Cincinnati office flagged conservative groups, the IRS approved almost all the new applications. Only eight applications were denied. 

Graphics by Sisi Wei and Lena Groeger

Correction: This post originally said that fewer than 1 in 1,000 IRS employees worked in the Exempt Organizations’ division. In fact, the figure is fewer than 1 in 100.

Robert L Haarman

May 17, 2013, 4:54 p.m.

Starv the beast then complain when it bites you.

“Of the 90,000 employees at the agency last year, only 876 worked in the Exempt Organizations’ division, or less than 1 in 1,000 employees.”

That would be “less than 1 in 100”  I believe…...

Are all of the other data in the article OK?

Please forgive my error…..that should be “fewer than 1 in 100….”

I would comment, but it might trigger an audit.

The problem with this article is it assumes that the reduction in budgets and process caused this situation.  It did not. 

Any civil servant who works for the US government knows that they are to be impartial in the performance of their duties.  The employees in the Exempt Organizations division know this, and they know that irrespective of their internal budget issues, that targeting one specific type of political organization would run against everything that a civil servant is supposed to to.

There are many aspects to the IRS using convenient shortcuts to check 501(c)4 applications.  1. Congress has starved the IRS budget for years.
2. Those people were overworked and thought they had a shortcut and no one reviewed their decision to use them - management failure. 3. A lot of political organizations applied (1700+) and there was not enough manpower.
  The solution is simple. Keep Congress and its politicized hearings out of it. Appoint a special prosecutor. That person should then check all the application for 501(c)4 and determine how many should have been under 527 - tax exempt but have to disclose their donors.
  If that were done, both parties would suffer great embarrassment, because I am convinced that most of the applications from both parties were skirting the law.
  Note that no one has asked the right questions in Congress. A lot of commentators have made this point. Congress wants to embarrass Obama, but no one wants the real facts to come out.

Disclosing confidential documents, inadvertently or not, is an immediate firing offense at the IRS. I wonder if that has happened to the employees who disclosed the data to you?

So, the Cincinnati office somehow over a period of years, somehow went opaque and rogue, eh?

‘Blame the low-levels employees’ sounds like a limited hangout to me.

http://en.wikipedia.org/wiki/Limited_hangout

Not sure where Soros figures in here except the obvious… Puppetmaster Soros controls the IRS and ProPublica from his ersatz volcano lair and in all probability the NRA too though I haven’t figured out his angle there…yet….Semper Fi!

James M. Fitzsimmons

May 18, 2013, 2:58 a.m.

Interesting and clever defense of President Obama and his administration. Rogue rascals in IRS Cincinnati enabled by Republicans perpetrated this politically inspired conspiracy. And the IRS Cincinnati “perps” were underpaid and less qualified than the pool of talent elsewhere! Good thing, more astute perps would have been harder to catch. One has to wonder, however, where the motivation to target Conservatives came from. One explanation proffered makes sense to me, to wit,characterizations by the Left including the Administration that the political opposition (Conservatives) are not just mistaken, they are mean spirited and immoral. The demonizing of Republicans and naive sanctifying of Democrats is something that even low level, underpaid, less qualified IRS Cincinnati employees are able to understand.

“No one, including the IRS and the inspector general, has presented evidence that political bias was a factor, although congressional and FBI investigators are taking another look.”

This statement is absurd on its face.

Fact: there was an overwhelming predominance of heightened scrutiny of TP and Pro Life groups compared to “Progressive” organizations during the same time period.

I believe investigators will find that ratio to be in the range of 25 or even 50 to 1. That statistic is surely “evidence”, no?

Dispute this ratio? Then let’s see the actual numbers. Anyone listening here in Congress?

N. Morris-Farber

May 18, 2013, 8:04 a.m.

I found this an extremely informative and clarifying article.  Thank you for publishing it.

Under this administration it was conservative groups and groups supporting Israel.  In a future administration it could be liberal groups.  Government in this case is arrogant and dismissive of our civil liberties.

We must always oppose these kinds of intrusive attempts to demean and shut down voices of dissent regardless of their political positions.

It should be noted that a charitable group supported by the President’s brother took only 27 days for approval, with no extended investigation, and was back-dated in order to help them avoid claims of false advertising of their tax exempt status.  That sadly smells of political cronyism.

There is no excuse for this behavior by claiming low wages or lack of supervision or guide lines.  We are an educated society and we know the limits of government and the limits of power.  Even IRS employees are making public comments about abuse of power.  We should listen and clean house.

Isn’t this is the same organiztion that illegiallly received data from the IRS on conservatives; used it in articles; and did not report it? How can you believe anything that they print.

Someone throw me a rope. I’m drowning in whitewash over here.

Patricia Kienholz

May 18, 2013, 1:53 p.m.

Your numbers do not match the numbers given in this citation from constitutional law expert Johnathan Adler:

http://www.volokh.com/2013/05/17/irs-disclosure-was-planted/

NOTaDEMorREPjustAmerican

May 18, 2013, 5:33 p.m.

“”“Of course, any number of structural fixes wouldn’t stop rogue employees with a partisan ax to grind. No one, including the IRS and the inspector general, has presented evidence that political bias was a factor, although congressional and FBI investigators are taking another look.”“
....Kim and Justin go back to reality-ville if you can find it. It is FACT that they were targeting political groups, or what that apology the IRS gave a mistake. 100 percent of the groups or individuals targeted were conservative. Yet somehow you gloss over that fact like your pathetic leader. FACT you start throwing “So Called” rogue agents in jail and it will stop pretty fast. FYI - Because you obviously missed the documents that PROVED TO BE FACT that the HEAD OF THE IRS knew this was going on and did NOTHING since 2011.

Question before you send this to the IRS, are any of you guys go to prison for publishing the private information the IRS supposedly “accidentally” gave you??? Then told you it was ILLEGAL to publish, redacted or not.

Propublica is another Soros hack HIGHLY political one sided NOT independent rag, just like Polifact and all the other liars.

Oh so now being overworked and underpaid is justification for any actions taken by federal employees according to this article. The employees can just change the rules to suit themselves since there is no oversight. This article is total whitewash BS. The targeting of conservative political, religious and the growing list of individuals and organizations is in and of itself the proof of political bias. This is only the beginning of a story which illustrates an administration bent on using all agencies within the federal government to persecute its enemies.

Neil C Denver

May 19, 2013, 8:06 a.m.

Most federal government departments are dysfunctional regardless which party is in power.  But real investigative reporting should examine the dysfunction of the Executive Department starting at the top. 

Comparisons of Executive Department dysfunction during the Benghazi attacks would be far more revealing about the character of our Commander-In-Chief and the pantywaists that surround him. 

Like all organizations, political or private, the fish usually stinks from the top.  As socialist community organizer Saul Alinsky said:

“One of the most important things in life is what Judge Learned Hand described as ‘that ever-gnawing inner doubt as to whether you’re right.’ If you don’t have that, if you think you’ve got an inside track to absolute truth, you become doctrinaire, humorless and intellectually constipated. The greatest crimes in history have been perpetrated by such religious and political and racial fanatics”. 

In the case of Obama, Limbaugh et al . . . they truly believe that they have the inside track to the absolute truth and subsequently have become intellectually constipated.  And so are their hysterical followers on the Left and Right.

I worked for IRS about 25 years ago for 6 months.  That was all I could take.  This article rings pretty true to me and it is absolutely believable based on my experience.  I really doubt any higher ups were involved in this because they probably didn’t give a darn about this little unit.  If they did this unit would not have had its staff cut and would have been micro-managed to death.  If it doesn’t bring in revenue it’s seen as unnecessary by the big guns at IRS and this type of unit would definitely not have been a good assignment for the career minded on their way to the top or a high paying job in the private sector tax industry.

I think something more important to look at is why these groups who exist solely to donate money to politicians and participate in elections are allowed any tax exemption at all and I include churches in this.  And I do mean that neither liberals nor conservatives should be allowed tax exempt status.  In the end we, the tax payers, are not underwriting people doing good works but politicians and I resent that.

The urgency of the related allegations of USG abuse of power might make this article/documentary about IRS bureaucratic inefficiencies a very expensive distraction.  Id expect propublica knows where its effect is most needed—in keeping all eyes on the .  Full stop.  Why?  Because the magnitude of that possibility may trump any sidebars re broken workflow process at the IRS (however true or startling)
Do authors mean to leave impression that no material abuse has occurred?  If not yet, trudging fwd into possible alternative causes explanations at IRS risks implying just that. 

If, in a couple days, we learn that the Office of President has abused power, doesnt this valid and thorough expose about “other related problems” at IRS quickly fail to have mattered at all?

Richard Fuchs

May 19, 2013, 1:07 p.m.

So the IRS suspects an organisation whose name stands for “Taxed Enough Already” might not be completely honest about its tax status? Whatever can they have been thinking?

This is deflection. ProPublica is deflecting the fact that most if not all of the “flagged” organizations were conservative or Tea Party groups. The choice of these groups wasn’t caused by a lack of funding or inadequate oversight. Why isn’t ProPublica or anyone trying to find out who gave the orders to flag these groups in the first place, and how they got started up again once it was stopped in 2012?  Other articles have already reported that employees at the low levels don’t have the authority to flag these groups in there own.  This article appears to try to clear the IRS of political bias in their actions, but doesn’t even try to get to the source of the actions.  It makes it appear that ProPublica is trying really hard to make it seem like there is no political aspect to this.  Don’t be deflectors for this Administration just because your ideological bent is to the left.  You’re supposed to follow the facts wherever they go, aren’t you?

.@F E Green That error has been corrected—thanks for flagging it.

So many people are crying foul, but I have yet to understand who has been fouled. Certainly none of the 501(c)4 organizations were negatively impacted. They all conducted their business. Most of their business was political funding, contrary to what their applications stated. No one is in trouble for lying on their applications from what I can tell, although that case could be made. The only ones taking a beating in all this is the IRS and the President.

And when Mitch McConnell talks of “intimidation” please tell me, who’s intimidating whom? If I am an IRS employee in Cincinatti, you know I’m going to rubber stamp whatever comes across my desk for fear of intimidation and abuse.

It seems those crying foul the loudest are those committing the greatest offenses. Now why does that not surprise me?

You are failing to point out that the increase in 2012 was after the IRS stopped the discrimination of conservative groups.

I am amazed and ashamed that ProPublica is just throwing away their reputation by publishing this cloying article about the IRS. Of course you have benefitted in the past from the criminal actions of IRS employees leaking private tax information.

BOOOO!!!! HISSS!!! SHAME ON YOU!

As I understand it, the Cincinnati office where this took place was only required to process the applications for exemption.  Those generally are based solely on the materials provided by the applicant (which is why there was a lot of back and forth questioning by the office personnel when they suspected there was a problem.

The question of whether they were breaking the rules - which yes could have been checked by cross-refering to FTC filing and other sources - is not something these people ordinarily would do.

Interestingly, I have not seen any information regarding how many of these groups are audited, and how many of them have lost their exemptions or otherwise been penalized for breaking the rules. 

And there can be no doubt they were breaking the rules….

The rules for determining who is or is not exempt are out of control.  Frankly, I can’t see any reason why “social welfare organizations” should be exempt to begin with.  They are supposed to be nonprofits.  Well, if they don’t make a profit they don’t need an exemption (it is, after all, an income tax).  If they do make a profit, they should pay tax.

But this problem goes beyond just social welfare organizations.  Can anyone explain to me why hospitals can be exempt from tax but the doctors who work for and with them aren’t?  They both have the same purpose.  They both generate fees for basically performing the same services.  Why are hospitals “special” and pay no tax while doctors are not?

We need to seriously re-think the whole concept of issuing these exemptions.

I’m sorry, but when I’m overworked and underpaid, I’m still required to document what I do.  If tax dollars don’t buy the same sort of commitment that a low-level engineer is required to have (at a comparable salary, but with much more rigorous education), maybe we should rethink hiring practice rather than suggest that the IRS needs a bigger budget.

Seriously, “if we had more money, we never would have unfairly targeted groups that are against the current administration based on secret criteria” is a shallow excuse and not one worth building an article around.  It’s up there with “our culture needs room to expand” and “she fell eye-first into a doorknob.”

As for dysfunction, everything that’s wrong with the IRS can be seen in Obama’s reaction to the scandal:  Fire the acting IRS chief and put a stop to investigating these organizations.  Since we know some of these organizations do violate the terms by which the taxpayer subsidizes them, he should have called for a unilateral investigation to balance the scales and shine a light into the dark corners, not ordering the government to put its head back in the sand.

But hey, he’s against wars he conducts and hires lobbyists he planned to ban from Washington.  It only makes sense that he’d do his part to support the Citizens United decision he hates…

“I really thought this was much ado about nothing, but I do think we all learned an important lesson. I learned never again to pick another team over the Sun Devils in my NCAA brackets. . . . President [Michael] Crowe and the Board of Regents will soon learn all about being audited by the IRS.” - Barack Hussien Obama

When nonprofit CEO’s end up making $1 million a year, there is something wrong…Check out the defense associations, for example.

“But just six months later, Cincinnati employees changed the revised criteria to focus on “organizations involved in limiting/expanding government” or “educating on the Constitution.” They did so “without executive approval.”

Stand by for another revision of this article.

60,000 applications and determining those that are worthy of the benefits of nonprofit status? I wonder how a “Google” type “intelligent” search engine would “sort” all of the words in those applications? Maybe the same? Maybe not?

If this department is so mismanaged, why are bonuses handed out to managers so freely?

If employees are so dense they don’t know when they are violating laws, how can they be expected to enforce others (laws)?

A 10% across the board reduction in the level of workforce of the IRS would help employees become motivated to meet standards. Decimation is an effective way of getting the workforce’s attention.

If management is so bad, why are we expanding the responsibilities of the IRS to include enforcement for the Affordable Care Act? (And, do we really want the IRS anywhere near out medical care?)

A typical progressive response throw more money at the dysfunction and problem solved. Not a chance.

There is no way the information turned over to ProPublica was a mistake, it was planted bait and ProPublica took it hook line and sinker.

If the government were not so involved in social issues, social non-profits would not appear to be so involved in politics.

Take one item for example - the abortion issue. If the government is involved, those interested in this issue will want vote for a candidate aligned according to their social concerns. Doesn’t matter what party or person - just the social issue.

I have evaluated tax exempt organizations for over 35 years and if you look at the IRS filings of these groups, you could toss a coin, and you would find at least 50 percent, don’t follow the instructions, accounting rules, conflict of interest policies, etc. And a large majority aren’t very transparent in publishing this information to the public. Only by requiring full disclosure by tax exempts, including the publication of all Board and Committee meeting minutes, and other governing documents, will the public really know, how these public tax exempt organizations, really operate, in the public interest, or not.

Indiscresionary

May 31, 2013, 10:19 p.m.

.... I feel the need to add a disclaimer prior to my following comment…. This is a personal opinion (based on my own investigative efforts) in search of answers on how… unethical practice, discrimination, and bias based on political view…. was used as a weapon against me in custody litigation. After further research… I became aware of a long line of mothers being subjected to these unfounded attacks on a national level.
That being said….. Focusing primarily on numbers provides a very limited scope of the initiative behind the regular practice of foundations, alliances, and coalitions among a few others in the nonprofit arena. I have noticed strange disclosures of information pertaining to groups by simply reading more about them in their own publications. Although a time consuming practice….. Definitely noteworthy. Metamorphasizing creatively and non disclosure of definitive entity information tells the tale….. manipulating envoking reluctance to question ulterior motives behind such powerful messages. All I have to say is… Some of us are more inclined to question everything with an open mind and an empathetic heart on behalf of those innocents who continue to suffer. Children. Respectfully submitted…........

Mike Stringham

June 5, 2013, 7:02 p.m.

“The problem with this article is it assumes that the reduction in budgets and process caused this situation.  It did not. “... Tim

Your assessment, Timmy; not Pro-Publica’s. Perhaps you should learn to read more critically.Then again, maybe you should just learn to read, Timmy.

As to gunste’s remarks, I tend to agree on most points.  The whole affair is one big muck-up that needs fixing: 1)Fully fund and staff the IRS; 2)redo it’s authorization, and do away with tax code that allows anonymous political saboteur’s to operate from the shadows no matter what their politics.  At the moment we have the kind of situation that arises when the engineers and conductors of this country have been asleep at their post’s for 5 decades and some change. It should be no surprise that home-grown enemies of this republic have had some success in wounding and hamstringing their own federal government so badly it may never recover.

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