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Oversight from Washington, All Along
IRS specialists in Washington were closely involved in the Cincinnati office’s scandalous behavior.


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Eliana Johnson

From the outset, Internal Revenue Service lawyers based in Washington, D.C., provided important guidance on the handling of tea-party groups’ applications for tax-exempt status, according to both IRS sources and the inspector general’s report released in mid May.

Officials in the Technical Unit of the IRS’s Rulings and Agreements office played an integral role in determining how the targeted applications were treated, provided general guidelines to Cincinnati case workers, briefed other agency employees on the status of the special cases, and reviewed all those intrusive requests demanding “more information” from tea-party groups. At times, the Technical Unit lawyers seemed to exercise tight control over these applications, creating both a backlog in application processing and frustration among Cincinnati agents waiting for direction.

An IRS employee who asked not to be identified tells National Review Online that all members of the agency’s Technical Unit are based in Washington, D.C. A current list of Technical Unit managers provided by another IRS employee shows that all such managers are based at the agency’s headquarters on Constitution Avenue in the District of Columbia, and the IRS confirmed, in a testy exchange with National Review Online, that the Technical Unit is “based in Washington.”

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According to the IRS source, who is based in Cincinnati, complex cases are routinely elevated to the Technical Unit for guidance. Many of the questions that agents sent to groups most likely came “from Tax Law Specialists — lawyers — in D.C.,” the Cincinnati employee explains. “With tea-party cases, questions from the Tax Law Specialists were way too aggressive,” he says. The Washington Post described these lawyers as parsing “the murkier, more complex applications” — including those of tea-party groups.

This account comports with the one laid out in the inspector general’s report, although this aspect of the report has been neglected in much of the press coverage. On May 17, 2010, according to the IG report, Determinations Unit specialists in Cincinnati handling tea-party applications were instructed to “send additional information request letters to the Technical Unit for review prior to issuance.” Ten days later, the Technical Unit “began reviewing additional information request letters prepared by the Determinations Unit.”

The IG report indicates this became a source of frustration, and specialists in Cincinnati pressed for a streamlined approach. “Why does the Technical Unit need to review every additional information request letter when a template letter could be approved and used on all the cases?” they asked via e-mail. The Washington unit rejected this approach and, in February 2011, was developing individualized letters itself. According to the IG report, an update from the Technical Unit acting manager to the Determinations Unit manager indicated, “Letters were being developed and would be reviewed shortly.”

We now know that such letters asked for lists of groups’ reading materials and volunteers, copies of fliers, and printouts of Facebook pages.

This close and consistent involvement of Washington bureaucrats contradicts testimony offered May 17 by Treasury Department inspector general J. Russell George and acting IRS commissioner Steven Miller, who said that the scandal resulted from poor management and a lack of oversight. George told the House Ways and Means Committee that Determinations Unit specialists in Cincinnati sent letters to tea-party groups “with little or no supervisory review.” Yet the IG report itself indicates in its timeline that the letters were often written and reviewed by the Technical Unit.



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