House Republicans proposed a top-to-bottom reorganization of the IRS on Tuesday, saying the agency’s treatment of Tea Party groups proved that it’s now a political organization instead of nonpartisan tax collector.
The committee, led by Chairman Darrell Issa (R-Calif.), has made the case in recent months that President Obama’s criticism of the Supreme Court’s Citizens United decision drove the IRS’s improper scrutiny of Tea Party groups.
Republicans also say that IRS brass were too focused on implementing ObamaCare in recent years – giving too much space to officials like Lois Lerner, the former head of a division overseeing tax-exempt groups and the central figure in the Tea Party controversy.
“The IRS has grown to become a partisan policy-making body and full-fledged arm of the administration in power,” the Oversight report said.
Because of the agency’s growing responsibilities, the GOP report says that the job of running the IRS has grown too large for one person. Instead, the report calls for the sort of bipartisan panel that oversees a range of other regulatory bodies.
Republicans also say in the new report that the IRS should essentially stop judging whether a group seeking tax-exempt status is too political, a job for which the GOP says the agency is ill-equipped.
As it stands, IRS regulations say that groups seeking 501(c)(4) status should be primarily engaged in advancing social welfare. In their new report, Republicans suggest that the IRS should give broad latitude to groups working on an issue promoting the common good, even if that issue has become part of the political debate.
“If the section 501(c)(4) applicants operate within the bounds of applicable and appropriate campaign-finance restrictions, the IRS should presume to consider all types of political speech to be consistent with social-welfare conduct,” the report said. “By erring on the side of free speech and free association, this proposal would ease the IRS’s task of evaluating a tax-exempt application and recognize the applicants’ constitutional rights.”
Democrats have also complained about the current set-up, but have argued for tighter rules governing 501(c)(4) groups. The IRS had to back away from rules this year that said that those organizations could not count activity for candidates as part of their social welfare mission.
Rep. Elijah Cummings (Md.), the top Democrat on the Oversight panel, was also quick to lash out at the new GOP report, especially the idea of getting rid of the commissioner’s position.
“How in the world does this make sense?” Cummings said. “Chairman Issa has been criticizing over-politicized boards for years, including at the Nuclear Regulatory Commission and the Chemical Safety Board, but now he wants to establish one at the IRS?”
The congressional investigations into the IRS’s scrutiny of Tea Party groups have gotten new life with the agency’s statements last month that a hard drive crash have left them unable to recover an untold number of Lerner’s emails.
Since then, Democrats have accused the GOP of desperately seeking for any hint of scandal in the IRS’s actions.
Other GOP ideas in the report include removing the IRS from Affordable Care Act implementation and revamping Treasury’s inspector general for tax administration – which outlined the IRS scrutiny of Tea Party groups, but also failed to stop it from happening, Republicans said.