IRS Scandal Brings Calls for Heads to Roll, Obamacare to be Delayed

IRS Scandal Brings Calls for Heads to Roll, Obamacare to be Delayed
May 21, 2013

Steve Stanek

Steve Stanek (sstanek@heartland.org) is a research fellow at The Heartland Institute and managing... (read full bio)

The scandal involving the Internal Revenue Service that exploded into the headlines in mid-May is still being investigated, but the implications already appear wide, perhaps even to the point of delaying implementation of Obamacare.

With allegations swirling that the IRS was used as a political weapon against groups that are conservative, libertarian, or constitutionalist in nature came news it was also used as a shield for progressive, “green,” and other groups.

At about the same time, news also broke of a lawsuit alleging the IRS had improperly obtained millions of personal health records. This raises more concerns about the Patient Protection and Affordable Care Act, popularly known as Obamacare, because the IRS has a big role to play in its implementation and enforcement.

“Even the appearance of playing partisan politics with the tax code is about as constitutionally troubling as it gets. With the recent push to grant federal agencies broad new powers to mandate donor disclosure for advocacy groups on both the left and the right, there must be clear checks in place to prevent this from ever happening again.,” said the American Civil Liberties Union in a statement.

“The American people deserve to know what actions will be taken to ensure those who made these policy decisions at the IRS are being held fully accountable and more importantly what is being done to ensure that this kind of raw partisanship is fully eliminated from these critically important non-partisan government functions,” wrote Republican senators to President Barack Obama. “As such, we demand that your Administration comply with all requests related to Congressional inquiries without any delay, including making available all IRS employees involved in designing and implementing these prohibited political screenings, so that the public has a full accounting of these actions.”

Stonewalling on Identities

The Obama administration so far has declined to identify anyone directly connected to the activities.

Acting IRS Commissioner Steven Miller was forced to resign, then testified before members of the House Ways and Means Committee. He objected to their use of the word “targeting” to describe the IRS’s treatment of organizations—a word that was used more than one dozen times in an IRS inspector general’s report on the IRS activities—and said such conduct was “absolutely not illegal.”

Organizations with “Tea Party,” Patriot,” or other names indicating a conservative, libertarian, or limited-government bent that were seeking tax-exempt status were often harassed with intrusive demands for information that included names of donors, personal Facebook and Twitter accounts, prayers people in the group might be saying, and books people in the groups might be reading. Some groups were forced to wait two years or more for an IRS decision. Others gave up out of frustration.

Meanwhile, USA Today and some other organizations reported they had obtained documents showing the IRS often fast-tracked for tax-exempt approval groups likely to be friendly to the Obama administration or its political objectives.

Staged Revelation

The story first made news after the IRS’s Lois Lerner, director of the agency’s tax-exempt organizations section, answered a question during a presentation at a meeting of the American Bar Association. Later, the IRS was forced to admit the questioner was a plant and the question was set up in advance to get out front of the inspector’s report on the agency’s targeting of certain groups. The IRS also has been forced to admit the targeting was much more widespread than Lerner said.

A further embarrassment for the IRS hit when Courthouse News reported a class action lawsuit against the IRS.

“This is an action involving the corruption and abuse of power by several Internal Revenue Service (‘IRS’) agents (collectively referred to as ‘Defendants’ herein) during a raid of John Doe Company, in the southern district of California, on March 11, 2011,” the complaint, quoted by Courthouse News, reads. “In a case involving solely a tax matter involving a former employee of the company, these agents stole more than 60,000,000 medical records of more than 10,000,000 Americans, including at least 1,000,000 Californians.”

Backlash Against Obamacare

The scandal has brought out bipartisan calls for a special prosecutor to investigate the allegations against the IRS, as well as calls for delaying or repealing full implementation of Obamacare, which is scheduled to happen in 2014.

“The power in our health care system should belong to patients and their families, not politicians—and certainly not the tax man,” Rep. Andy Harris of Maryland said in mid-May in the Republican Party’s weekly radio address as the scandal was heating up.

Steve Stanek

Steve Stanek (sstanek@heartland.org) is a research fellow at The Heartland Institute and managing... (read full bio)