The Senate Finance Committee has launched a bipartisan “blank slate” review of the tax code by eliminating all credits and deductions as a first step.
So perhaps Congress should enact a law sunsetting the Internal Revenue Code by a date certain — say 2015 — forcing every special interest to defend its turf as a new code is built up.
A major aim of any new tax code should be to radically reform and reduce the role of the Internal Revenue Service, which has shown political bias as well as incompetence in administering the law.
In the latest blow to the reputation of the IRS, Russell George, the Treasury Department’s inspector general for tax administration, has written Democratic lawmakers to deny that the IRS was evenhanded in its review of political committees seeking tax-exempt status. The agency’s actions were, his letter shows, overwhelmingly slanted against conservative groups
Rep. Sander Levin, D-Mich., complained last week to the inspector general that his criticism of the service for abusively targeting conservative Tea Party groups seeking tax-exempt status was one sided and ignored IRS scrutiny of “progressive” groups.
But Mr. George’s answer makes it clear that the harassment suffered by Tea Party and other conservative groups was extremely one-sided.
Less than one-third of groups with the word “progressive” in their applications received extra scrutiny, he said, compared to 100 percent of groups labeled “Tea Party.”
All of the “progressive” groups had their applications approved, while some tea party groups are still waiting.
It is understandable that Democrats are embarrassed by the news that the IRS tilted in their favor. But the evidence simply does not support their effort to explain away the problem as even-handed bureaucratic bumbling.
“While we have multiple sources of information corroborating the use of tea party and other related criteria ... we found no indication in any of these other materials that ‘progressives’ was a term used to refer cases for scrutiny for political campaign intervention,” Mr. George wrote.
Rep. Levin responded that the inspector general had fully informed lawmakers: “Congress deserved to know that ‘progressives’ were on the IRS screening list during the time of the audit and progressive organizations were in the review group. These omissions changed the nature of the investigation ...”
But it turns out that “progressives” was an IRS watchword from some time in the past, and had nothing to do with the special scrutiny reserved in 2010 and 2011 for the tea party and groups with the words “Patriot” or “9/12” in their names.
When the deliberate leaking of tax return information of the National Organization for Marriage to the pro-gay-marriage Human Rights Campaign and similar leaks are taken into account, it is clear that the IRS and/or its employees have decided to play political hardball against the right.
That is simply unacceptable.
One potential remedy:
Let the law that created the IRS expire so that it can be re-written in a manner aimed at regaining Americans’ trust in the federal tax agency.