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In GOP Opposition To Beefing Up IRS Enforcement, Shades Of A Fake, Obama-Era Zombie Scandal

UNITED STATES - MAY 22: Lois Lerner, director of exempt organizations for the Internal Revenue Service, arrives for a House Oversight and Government Reform Committee hearing on the investigation of the IRS's targeting of political groups. Lerner invoked her Fifth Amendment right to not testify. Lerner cause a protest from some committee members when she offered an opening statement and engaged in dialogue with members before invoking her right. (Photo By Tom Williams/CQ Roll Call)
UNITED STATES - MAY 22: Lois Lerner, director of exempt organizations for the Internal Revenue Service, arrives for a House Oversight and Government Reform Committee hearing in Rayburn Building on the investigation o... UNITED STATES - MAY 22: Lois Lerner, director of exempt organizations for the Internal Revenue Service, arrives for a House Oversight and Government Reform Committee hearing in Rayburn Building on the investigation of the IRS's targeting of political groups. Lerner invoked her Fifth Amendment right to not testify. (Photo By Tom Williams/CQ Roll Call) MORE LESS
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July 20, 2021 7:00 a.m.

On Sunday, Sen. Rob Portman (R-OH) said on CNN that giving the IRS more resources to go after very wealthy tax evaders, a provision that senators hoped would net $100 billion in 10 years to help pay for the bipartisan infrastructure plan, was officially on the cutting room floor.

He attributed the chop in part to “pushback” from fellow Republicans.

How did the GOP senators in the bipartisan group end up stepping away from a plan they had initially backed? Much of the pushback Portman referred to seems to have been sparked by an external pressure campaign. 

The Pressure Campaign

In early July, a group of big-ticket conservative groups sent a letter to Republican lawmakers, warning them not to support the bipartisan plan unless it followed their guideposts. Stephen Moore, Grover Norquist and Steve Forbes were among the signees. 

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While most of the letter’s demands were concerned with expressly banning any measures to help mitigate the climate disaster unfolding before our eyes, one addressed the IRS enforcement provision. 

“No additional funding for the Internal Revenue Service, especially given its multiple scandals over the past decade,” the letter said. “We have not forgotten about Lois Lerner’s tactics of using IRS enforcement to harass conservative groups and donors. Republicans in Congress shouldn’t either.”

The supposed Lois Lerner scandal was quite the throwback, and one the Republican minority on the House Ways & Means Committee had resurrected in a press release published the day before the letter from conservative coalitions made the same argument. 

The committee warned that more IRS funding will mean targets on the backs of all critics of the administration. “Flashback: Former IRS official Lois Lerner apologized in 2013 that Tea Party groups and other groups had been targeted for audits of their applications for tax-exemption, which effectively delayed that status until they could no longer take effective part in the 2012 election,” the release said. 

The Wall Street Journal editorial board sang the same tune.

“Remember Lois Lerner? During her tenure as director of exempt organizations, the IRS unfairly singled out conservative nonprofits for special scrutiny and harassment,” the board wrote. “It was a sobering lesson in how one of Washington’s most powerful agencies can be weaponized against political opponents.”

Senate Republicans started parroting similar language in their opposition to the provision soon after. 

“I don’t think anybody’s looking forward to an army of auditors to audit your tax returns. Unfortunately, the IRS has a reputation problem because of weaponization … the Lois Lerners of the world,” Sen. John Cornyn (R-TX) told a HuffPost reporter Monday.

“We want to be able to collect the taxes that are due, but we also don’t want to harass individuals — and in between is a fine line we don’t want to cross,” Sen. Mike Rounds (R-SD) said.

The unspoken piece of Republicans’ pushback is clear: they don’t want to alienate their wealthy supporters and donors. It seems politically extreme that they’re willing to potentially sink the bipartisan infrastructure plan in service of those very wealthy few — even now, negotiators are scrambling to find a payfor acceptable to both sides that’ll fill the $100 billion hole — but the presumption that Republicans will support policies to help the richest in society is so baked in that it doesn’t even generate headlines.

So instead, the GOP pressure campaign is pegged to an explanation simpler and more righteous for Republicans to echo: an IRS scandal, where innocent conservatives were harassed and targeted. Fox Newsian red meat, in other words. 

Zombie Scandal

The Republican memory of the IRS “scandal” during the Obama administration is pure fantasy, yet continues to be the dominant story of what happened, aided by a credulous media. 

In 2013, right-wing groups started complaining that the IRS was targeting them for seeking a tax-exempt status, loading them with undue burdens and difficulties. Republicans wasted little time accusing former President Barack Obama of being behind the effort to target Tea Party groups, and Obama himself preemptively condemned any potential wrongdoing. Media outlets of all stripes bit.

Even in the immediate aftermath of the Republican uproar, it soon became clear that the IRS was not only targeting conservative groups; it was trying to identify all political groups, including liberal ones, to weed out those that were inappropriately seeking the coveted tax-exempt status during an era when it was coming into vogue (as it continues to be) among dark money groups looking to hide the identities of their wealthy backers. While using search terms like “tea party” to expedite that process, the IRS also used “progressive” and “green energy.” And it stopped using the search terms altogether once the “scandal” broke.

“We replaced the leadership of the IRS over this. We have subpoenas out. We are deposing employees. And we have damaged the president,” said Rep. Gerald Connolly (D-VA), a member of the House committee that launched an inquiry into the agency. “It turns out this has been a gross distortion of reality.”

Lois Lerner, then-director of the IRS exempt organizations division, became the GOP-chosen face of the outrage, and sacrificial lamb on the altar of the fake scandal. The Republican-majority House found her to be in contempt of Congress for invoking her 5th Amendment right not to testify; her emails were subpoenaed; she was put on administrative leave and ultimately resigned. 

An assistant attorney general wrote, upon closing the DOJ’s investigation into the IRS “scandal” in 2015, that not only did Lerner have no criminal liability, but she was actually the first official to flag the political term searching as a problem and try to stop it.

None of that stopped Republicans from beating the dead Benghazi-esque horse, insisting that this was a bona fide Obama administration scandal and insinuating that the President was behind it — despite the Department of Justice, FBI and Treasury Department coming up empty after exhaustive probes. Republicans even called for the impeachment of an IRS commissioner who didn’t work there during the “scandal.” 

The fantasy continues to this day, with Republicans of all flavors insisting that it was a grim reminder of the result of unfettered bureaucratic power. They carry the grudge into anger about a recent ProPublica piece revealing how little the richest in society pay, accusing the IRS of being behind the leak when ProPublica itself has said it doesn’t know the source of the documents. Dark money groups, meanwhile, continue to exploit the tax code to hide their donors. 

Now, the bipartisan negotiators will have to identify another revenue stream to fill the $100 billion chasm — hopefully stemming from a department with which Republicans don’t have a nearly-decade long, completely fabricated beef.

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