[EL] Wall Street Journal IRS Atmosphere Timeline

[Mark Schmitt]

I remember Austan Goolsbee well, what of it? He made a statement, which was
wrong, that he "thought" Koch Industries was structured as an LLP or MLP.
He was mistaken. It was a statement about tax policy, a reminder that some
large companies aren't subject to the corporate income tax, which is true.
As it turns out, his example was mistaken. The Koch Industries website
shows that several of its large subsidiaries are LLCs, but the corporation
itself is not.

What is the signal that you think low-level IRS employees would take from
that misstatement about tax policy and public information?


Mark Schmitt
Senior Fellow, The Roosevelt Institute <http://www.rooseveltinstitute.org/>
202/246-2350
gchat or Skype: schmitt.mark
twitter: mschmitt9


On Mon, Jun 10, 2013 at 10:27 AM, <BZall at aol.com> wrote:

> **
> No one seems to be reacting to the *Wall Street Journal* column
> attempting to use a timeline to explain how "low-level" IRS agents might
> find it necessary to scrutinize 1024s from some groups more than others,
> asking otherwise inappropriate questions about volunteers and individuals.
>
>
> http://online.wsj.com/article/SB10001424127887323844804578529571309012846.html?mod=opinion_newsreel
>
> This echoes a debate at last week's First Tuesday Lunch meeting where one
> set of public policy attorneys (my own term for lawyers who specialize in
> both campaign finance and exempt organization law) discussed with another
> set whether there was direction, either explicit or tacit, from the
> Administration. One set remembers Austan Goolsbee very well; others not so
> much, and the discrepancy taints the analysis of current events.
>
> We have long known that the IRS reads the newspapers, as you would expect
> them to. The question is whether they consciously or unconsciously absorb
> some of the campaign rhetoric, and if they do, whether it is absorbed
> evenly or not. In an area where confirmation bias runs rampant, as
> evidenced by recent posts to this list, are we training IRS agents to avoid
> it? Even lawyers who read some IRS publications have no clue about how the
> political rules actually work. In many cases, it takes years to understand,
> just as you expect in any other complex area. There's no real evidence of
> that type of training in the IRS, and the TIGTA report indicates that
> training sessions were either late or incomplete. Was Judy Kindell, the
> resident guru on political matters in the IRS EO Division, consulted in
> 2009, when this whole mess began? Apparently the isolation of Cincinnati
> imposed by the 2003 IRS reorganization bore its bitter fruit, fertilized by
> a continual lack of resources, in that time period.
>
> Perhaps the point is one also made at last week's lunch: the real problem
> here is that IRS Determs was using audit techniques instead of reviewing
> applications. That may have been because the agents were fearful that some
> of what was being said in the media (as opposed to the applications) was
> true, and sought to get to the bottom of it. That is not necessarily a bad
> thing if you are tasked with determining how organizations will operate in
> the future (itself an incredibly difficult task), particularly with
> charities. But these were c4s, where political activity is perfectly
> lawful. Audit techniques are likely inappropriate when an organization does
> not have a track record, and will only result in shutting down the smaller
> and newer organizations who can't afford the skilled counsel who can simply
> stare down the inappropriate questions or call the managers they already
> know to complain. It is all well-and-good to question the competence of
> low-level employees who made mistakes, but we should look at the system to
> see the real structural issues.
>
> Barnaby Zall
> Of Counsel
> Weinberg, Jacobs & Tolani, LLP
> 10411 Motor City Drive, Suite 500
> Bethesda, MD 20817
> 301-231-6943 (direct dial)
> bzall at aol.com
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