Accuracy in Media

The U.S. Senate Finance Committee, chaired by Utah Senator Orrin Hatch, released this report last week. Here are the highlights from the report, which report can be found here.

  • During the years 2010 to 2013, IRS management failed to provide effective control, guidance and direction over the processing of applications for tax-exempt status.
  • Top IRS managers did not keep informed about the applications involving possible political advocacy and thereby forfeited the opportunity to provide the leadership that the IRS needed to respond to the legal and policy issues presented by these applications.
  • Lois Lerner, who headed the Exempt Organizations Division, became aware of the Tea Party applications in early 2010, but failed to inform her superiors about their existence.  While under Lerner’s leadership, the Exempt Organizations Division undertook no less than seven poorly planned and badly executed initiatives aimed at bringing the growing number of applications from Tea Party and other groups to decision.  Every one of those initiatives ended in predictable failure and every failure resulted in months and years of delay for the organizations awaiting decisions from the IRS on their applications for tax-exempt status.
  • The Committee also found that the workplace culture in the Exempt Organizations Division placed little emphasis or value on providing customer service.
    • Few if any of the managers were concerned about the delays in processing the applications, delays that possibly harmed the organizations ability to function for their stated purposes.
  • The Committee made a number of recommendations to address IRS management deficiencies as follows:
  • The Hatch Act should be revised to designate all IRS, Treasury and Chief Counsel employees who handle exempt organization matters as “further restricted.”  “Further restricted” employees are precluded from active participation in political management or partisan campaigns, even while off-duty.
  • The IRS should track the age and cycle times of applications for tax-exempt status to detect backlogs early in the process and allow management to take steps to address those backlogs.
  • The Exempt Organizations Division should track requests for assistance from both the Technical Branch and the Chief Counsel’s office to ensure the timely receipt of that assistance.
  • A list of over-age applications should be sent to the Commissioner on a quarterly basis.
  • Internal IRS guidance should require that employees reach a decision applications no later than 270 days after the IRS receives that application.  Employees and managers who fail to comply with these standards should be disciplined.
  • Minimum training standards should be established for all managers within the EO Division to ensure that they have adequate technical ability to perform their jobs.




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