Merely a Tax Misunderstanding



Taxpayers tuning in to Friday's House Ways and Means hearing on IRS targeting of conservative groups may have expected to hear some hangdog apologies from senior members of the agency. If so, they were disappointed.

Acting IRS Commissioner Steven Miller, who was fired by President Obama this week but is sticking around to help with the transition, was almost casual about the pattern of biased enforcement that cost him his job. Earlier this week he blamed the political targeting on "rogue" officials in Cincinnati, but on Friday he said the behavior was "obnoxious" but that he does "not believe that partisanship motivated the people who engaged in the practices described in the inspector general's report." He even took issue with the word "targeting."

Mr. Miller said the whole thing is a misunderstanding based on some "foolish mistakes" made by "people trying to be more efficient in their workload selection." What really happened at the IRS wasn't an attempt to silence the Administration's political enemies during an election season but a simple case of "horrible customer service," he said.

You almost have to admire his nerve in describing the coercive power of taxation as the equivalent of rude service at a Best Buy. But if all of this is such a non-issue, why did it take the department so long to acknowledge its mistakes? The Treasury Inspector General report released this week shows that Mr. Miller knew about the use of conservative keywords in tax-exempt vetting in May 2012, months before the Presidential election. Republicans were asking about it at the time. If it wasn't a political bombshell, why didn't he make it public immediately?

Instead, the agency's Tax Exempt Organization Director Lois Lerner broke the story last Friday in response to a question at a meeting of the American Bar Association in Washington. She implied at the time that her apology for the targeting, conveniently timed to front-run the Treasury IG report, was a spontaneous answer to a surprise question from the audience.

But Friday's hearing revealed that the IRS planted the question that was asked by Washington tax lawyer Celia Roady, who serves on the IRS's Advisory Committee on Tax Exempt and Government Entities. So it was an inside job, and Ms. Lerner knew the question was coming. This may seem a small bit of spin-control hoping to minimize the story before a spring weekend. But if Ms. Lerner fibbed so casually about that, what else are we supposed to trust her on?

Meanwhile, more groups are disclosing their mistreatment by the IRS. The Texas Public Policy Foundation, a conservative think tank and 501(c)(3), says the agency publicly released its list of donors last year. While 501(c)(3) groups are required to list their donors on the 990 form they submit to the IRS, that information is supposed to be redacted before the tax form is made public.

Somehow the IRS missed the redaction, exposing some 115 of the group's largest donors to any liberal advocacy groups that wanted to know their names. No doubt this was one more unfortunate misunderstanding.

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