Domestic Taxes

Wisconsin Gov. Scott Walker (R) promised on Wednesday to lower state income taxes if Congress approves online sales tax legislation.

In a letter to the state's members of Congress, Walker said the Wisconsin Department of Revenue estimates that the online sales tax bill would bring in $95 million in additional state revenue every year.

"I want to make clear, should federal Marketplace legislation become law, my intention would be for any resulting additional revenue be used to provide individual income tax relief for Wisconsin’s taxpayers," Walker wrote.

The new commissioner will replace Steven Miller, who resigned Wednesday amid the fallout over the targeting of conservative groups.

At least 17 groups are preparing lawsuits over the agency's improper targeting of conservative organizations. 

Congressional Democrats on Wednesday applauded President Obama’s move to force out the acting Internal Revenue Service (IRS) commissioner, while Republicans on Capitol Hill signaled that they were far from done investigating the agency’s targeting of conservative groups.

Steven Miller, the acting chief, became the first agency official to lose his or her job over the IRS’s singling out of Tea Party groups seeking tax-exempt status, with the 25-year IRS employee now set to leave the agency in June.

Speaking at the White House, Obama said Miller’s resignation would help restore confidence at the embattled agency, whose actions have also put the administration on its heels.

Miller’s resignation comes one day after a Treasury inspector general report found ineffective management at the agency, leading staffers to seek unnecessary information like donor lists from conservative groups seeking 501(c)(4) status and often delaying the application process.

Steven Miller becomes the first IRS official to lose job in the uproar over the targeting of conservative groups.

IRS staffers began singling out Tea Party groups over concerns about the amount of political activity being conducted by those organizations, the agency said Wednesday.

In explaining its actions, the IRS said that – as is normal practice – it used criteria to screen which groups applying for tax-exempt status needed more scrutiny.

Groups that appear to be involved in advocacy, lobbying or political campaigns receive extra attention. The IRS’s mistake, it acknowledges, was allowing “Tea Party” and other words linked to that movement as a shorthand for applications that needed more screening.

“IRS employees had seen cases of organizations with the name Tea Party in which political activity was an issue that needed to be reviewed for compliance with legal requirements,” the agency said. Read more...

The IRS said William Wilkins, one of two political appointees at the agency, was not involved with the applications.

The House’s top tax writer said that a new report on the IRS’s singling out of conservative groups leaves many questions unanswered.

Ways and Means Chairman Dave Camp (R-Mich.) said that the audit from the Treasury’s inspector general for tax administration did not detail who exactly put into place extra screening for Tea Party groups seeking tax exempt status – and how and why IRS employees decided to focus on conservative organizations.

The report did find that ineffective management led the IRS to inappropriately target conservative groups, and that the agency asked groups for a wide range of unnecessary information, including donor lists.

“I think the IG report is almost as significant for what it doesn’t cover, as much as what it does cover,” Camp told reporters in the Capitol. “Certainly, it’s some additional information, but there’s a lot they don’t go into.”

Senate Republicans are demanding that President Obama be “fully forthcoming” during congressional investigations into the IRS’s targeting of Tea Party groups.

All 45 GOP senators, in a Wednesday letter to Obama, said they were “deeply disturbed” by the findings of a Treasury inspector general’s report that found that ineffective management had led to the extra scrutiny of conservative groups seeking tax-exempt status.

“This type of purely political scrutiny being conducted by an Executive Branch Agency is yet another completely inexcusable attempt to chill the speech of political opponents and those who would question their government, consistent with a broader pattern of intimidation by arms of your administration to silence political dissent,” the senators wrote in the letter organized by Minority Leader Mitch McConnell (R-Ky.) and Sen. Orrin Hatch (Utah), the ranking Republican at the Finance Committee.

Sen. John Thune (R-S.D.) has joined the growing call for resignations at the Internal Revenue Service (IRS) over the targeting of Tea Party groups.

In a statement Wednesday, Thune said acting IRS Commissioner Steven Miller should step down immediately. Any official that knew of the activity should be fired as well, he said, while suggesting there may have been criminal activity at the tax collector.

"The report indicates that the abuse of power in targeting certain Americans went on for at least an 18-month period, and any IRS official who knew about this misconduct but remained silent should be fired immediately," Thune said. "This sort of breach of public trust is at best the result of incompetence and at worst the result of potentially illegal and malicious conduct."