Posts Tagged ‘IRS’


IRS STampAt the end of the tax year, the IRS office sent an inspector to audit the books of a local hospital. While the IRS agent was checking the books, he turned to the CFO of the hospital and said . “I notice you buy a lot of bandages. What do you do with the end of the roll when there’s too little left to be of any use?”

“Good question ,” noted the CFO. “We save them up and send them back to the bandage company and every once in a while, they send us a free roll.”?”Oh,” replied the auditor, somewhat disappointed that his unusual question had a practical answer. But on he went, in his obnoxious way. “What about all these plaster purchases? What do you do with what’s left over after setting a cast on a patient?”

“Ah, yes,” replied the CFO, realizing that the inspector was trying to trap him with an unanswerable question. “We save it and send it back to the manufacturer and every so often they will send us a free bag of plaster. “I see,” replied the auditor, thinking hard about how he could fluster the know-it-all CFO. “Well,” he went on, “What do you do with all the remains from the circumcision surgeries?”

“Here, too, we do not waste,” answered the CFO. “What we do is save all the little foreskins and send them to the IRS office, and about once a year they send us a complete prick.”

Fact: Obama Appointed Chief IRS Counsel Actually Developed Tea Party Targeting Guidelines

By Josh HicksIRS_tea_party_irs

The chief counsel’s office for the Internal Revenue Service, headed by a political appointee of President Obama, helped develop the agency’s problematic guidelines for reviewing “tea party” cases, according to a top IRS attorney.

In interviews with congressional investigators, IRS lawyer Carter Hull said his superiors told him that the chief counsel’s office, led by William Wilkins, would need to review some of the first applications the agency screened for additional scrutiny because of potential political activity.

Previous accounts from IRS employees had shown that Washington IRS officials were involved in the controversy, but Hull’s comments represent the closest connection to the White House to date. No evidence so far has definitively linked the White House to the agency’s actions.

According to a partial transcript released by House Oversight Committee Chairman Darrell Issa (R-Calif.) and House Ways and Means chairman Dave Camp (R-Mich.), the chief counsel’s office also discussed using a template letter to ask questions about the groups’ activities, despite Hull’s warning that such a boilerplate approach would be impractical.

“My reviewer and I both said a template makes absolutely no difference because these organizations, all of them are different,” Hull told investigators. “A template would not work.”

Hull told investigators that he had already requested additional information from the applicants at that point and felt he had enough facts to make a determination about their eligibility, according to the transcripts.

Social welfare groups, known as 501 (c)(4)s, faced delays lasting months and even years as the IRS reviewed their applications during the 2010 and 2012 election cycles.

IRS inspector general Russell George released a report in May that said the agency had inappropriately targeted groups based on ideology rather than looking for politically neutral signs of campaign activity. He also found that the IRS went too far in its questioning of applicants, asking them for everything from resumes to names of donors or membership lists, which experts say the IRS cannot legally do.

Democratic and Republican lawmakers in recent months have offered competing narratives about who was to blame for the IRS’s actions. GOP lawmakers have suggested that Washington IRS officials and even the White House had a hand in the controversy, while Democrats have said the issue started with mid-level employees in the agency’s tax-exemption office in Cincinnati.

While talking about the controversy in May, White House press secretary Jay Carney referred to “the apparent conduct by our IRS officials in Cincinnati” and said “line IRS employees in Cincinnati improperly scrutinized 501 (C)(4) organizations by using words like ‘tea party,’ in quotes, and ‘patriot.’”

Some Republicans, particularly Issa and Senate Majority Leader Mitch McConnell (R-Ky.), have argued that the administration was essentially bullying Obama’s opponents.

Rep. Elijah Cummings, the ranking member of the House Oversight committee, releasedtranscripts of congressional interviews with IRS employees that showed a Cincinnati agent elevated the first tea party case to Washington for guidance. A timeline from the inspector general’s report suggests that event served as the genesis of the targeting initiative.

On Wednesday, Cummings released additional transcripts in which Cincinnati IRS employees, some of them self-described Republicans, say they knew of no political motivation or White House involvement in the process.

IRS documents show that the agency has created “be on the lookout”, or BOLO lists, to screen both progressive and conservative groups for additional scrutiny, but one set of search criteria applied only to right-leaning groups initially.

Investigation Reveals IRS Used Credit Cards for Booze and Pornography - Where was Barry?

IRS Building


Poor oversight by the Internal Revenue Service allowed workers to use agency credit cards to buy wine for an expensive luncheon, dorky swag for managers’ meetings and, for one employee, romance novels and diet pills, an agency watchdog said Tuesday.

Two IRS credit cards were used to buy online pornography, though the employees said the cards were stolen. One of the workers reported five agency credit cards lost or stolen.

IRS employees used agency credit cards to make more than 273,000 purchases totaling nearly $108 million in 2010 and 2011, according to the report by the Treasury inspector general for tax administration.

The vast majority of those purchases were legitimate, the report said. However, the report said the IRS has inadequate controls to prevent inappropriate purchases.

For example, investigators found that one IRS employee spent $2,655 on diet pills, romance novels, steaks, a smartphone and baby-related items, including bottles, games and clothes. The case was referred to the IG’s office that investigates employee misconduct, the report said.

Among other “improper” purchases identified by the inspector general:

_ $3,152 to rent a popcorn machine and to buy prizes for an employee event, including bandanas, stuffed animals, sunglasses and stovepipe hats.

_ $418 for novelty decorations and swag at managers’ meetings, including kazoos, bathtub toys and “Thomas the Tank Engine” wristbands.

_ $119 for Nerf footballs that were never used and were found stored in a filing cabinet.

“Inadequate procedures to identify, report and address inappropriate use leaves the IRS purchase card program vulnerable to repeated violations of applicable laws and regulations,” said J. Russell George, the Treasury inspector general for tax administration.

The report comes as the IRS faces intense scrutiny over agents targeting conservative groups for additional scrutiny when they applied for tax-exempt status. Documents released Monday show that liberal and progressive groups were singled out, too.

Also, the inspector general released a report earlier this month that detailed lavish spending at employee conferences. In all, the agency spent nearly $50 million on employee conferences from 2010 through 2012.

“Clearly, any inappropriate card use impacts our bottom line and is cause for concern,” said acting IRS Commissioner Danny Werfel, who took over the agency last month. “Wasteful spending cannot be tolerated, and any employees found to be abusing the system will be held accountable. In fact, we are following up on several inappropriate incidents mentioned in the report, ranging from internal actions to criminal charges.”

“That said, more than 99.75 percent of IRS purchases adhered to the rules,” Werfel added. “The IRS has made important progress over the past two years in strengthening the controls in our purchase card program. We are committed to protecting taxpayer resources, and we will take quick action to implement all of TIGTA’s recommendations.”

The new report highlighted a 2010 conference in Washington for tax officials from other countries. At a luncheon, the IRS bought 28 bottles of wine _ for 41 guests, the report said. A dinner at the conference cost the agency $140 a person, four times the allowable government rate at the time.

In all, the agency spent more than $50,000 on meals, receptions and meetings at the five-day conference, the report said. Agency credit cards were used for about $12,500 of the purchases.

“It is important to note that the luncheon described in the report took place in 2010 for an international business meeting of tax officials from several of the world’s largest countries. This meeting is an important forum for international leaders on major tax issues,” Werfel said. “However, given the excessive purchases for the luncheon, I am directing the IRS business units to more closely review spending in advance for any similar events to ensure all spending is appropriate.”

The IRS participates in the General Services Administration’s SmartPay purchase card program. Under the program, agency employees can use purchase cards, which act like credit cards, to buy work-related items. The maximum amount for an individual purchase is $3,000.

More expensive items are subject to competitive pricing policies.

In 2010 and 2011, internal controls at the IRS found 327 cases in which employees divided their purchases to skirt the $3,000 limit. The inspector general’s office found an additional 34 cases. In all, the purchases totaled $493,000, the report said.

The report said 94 employees were responsible for the purchases, including 22 workers who had done it more than once in a six-month period. However, the report said, none of the employees were disciplined.

As for the two IRS employees whose cards were used to buy pornography, the inspector general’s report didn’t determine who bought the material or whether their cards were actually stolen. One of the employees is no longer at the agency. The IG is continuing to investigate the other employee, the report said.

CAN YOU BELIEVE THIS -IRS Sent $46,378,040 in Refunds to 23,994 ‘Unauthorized’ Aliens at 1 Atlanta Address

Cincinnati IRS Employee: I Was ‘Essentially a Front Person’ for Washington

by Paul ScicchitanoLERNER LOIS

Carter Hull, an IRS Attorney in Washington, D.C. closely oversaw the agency’s scrutiny of tea party groups and other conservative organizations in an apparent contradiction of top agency officials, who insisted that low-level employees in Cincinnati were to blame for the now widening scandal.

The Wall Street Journal reported on Wednesday that Elizabeth Hofacre of the Cincinnati office told congressional investigators that she had limited autonomy to act on her own when it came to questioning conservative organizations.

“I was essentially a front person, because I had no autonomy or no authority to act on [applications] without Carter Hull’s influence or input,” she said in transcripts of her interview, according to the Journal.

The newspaper also reported that interview transcripts suggest Gary Muthert of the Cincinnati office was among the first IRS employees to begin searching for tea-party groups by name among the groups seeking tax-exempt status in March 2010 at the request of a local manager who told him that “Washington, D.C. wanted some cases.” At first he was told to pull seven applications.

But over the following two months he expanded his search to include groups with “patriot” and “9/12” in their applications for a total of about 40 tea-party cases.

Hofacre told investigators that attorney Hull suggested questions to ask the tea-party groups and that she was also told to forward him their responses as well, something she found “demeaning.”

There was no indication that Obama admininstration officials were involved or asked for groups to be targeted.

“All I remember saying and thinking is, ‘This is ridiculous,’” she said, according to the publication. “Because at the same time, you are getting calls from irate taxpayers. And I see their point. Even if a decision isn’t favorable, they deserve some kind of treatment and they deserve, you know, timeliness, and . . . these applications and their responses were just being sent up there [to Washington] and I am not sure what was happening.”

At another point during the interview with investigators Hofacre complained she was “being micromanaged to death, and it was just really frustrating.” She was subsequently granted a transfer in the fall of 2010 that Hofacre described as a promotion.

Karen Kenney BLASTS CONGRESS - Testifies on IRS Abuses of Power

IRS targeted news anchor after Obama interview…

Barack Obama(Politico) – Larry Connors, a veteran local news anchor at KMOV Channel 4 in St. Louis, says that the Internal Revenue Service has been targeting him since an April 2012 interview he conducted with President Obama — a fact that he dismissed as coincidence until the recent reports about the IRS targeting conservative groups.

“Shortly after I did my April 2012 interview with President Obama, my wife, friends and some viewers suggested that I might need to watch out for the IRS. I don’t accept ‘conspiracy theories’, but I do know that almost immediately after the interview, the IRS started hammering me,” Connors wrote on his Facebook page late Monday night.

House Throws Down Gauntlet on IRS -Ways and Means to IRS: ‘Provide All Communications Containing Words ‘Tea Party,’ ‘Patriot,’ or ‘Conservative’—By Wednesday

by Terrance Jefferyirs

House Ways and Means Oversight Subcommittee Chairman Charles Boustany (R.-La.) (J.Scott Applewhite)

( – The House Ways and Means Subcommittee on Oversight has thrown down an investigative gauntlet to the Internal Revenue Service, demanding that the agency hand over by next Wednesday every communication in its records that includes the words “tea party,” “patriot” or “conservative.”

The committee is also demanding of the IRS that by next Wednesday it provide the committee with the names and titles of all individuals who were involved in targeting conservative non-profit groups for more intensive review of their applications for non-profit status.

The request follows a report this morning from the Associated Press that Lois Lerner, director of the IRS Exempt Organizations Division, said at an American Bar Association conference that the IRS had targeted for special review applications of non-profit groups that included the words “tea party” or “patriot.”

“That was wrong,” the AP quoted Lerner as saying. “That was absolutely incorrect, it was insensitive and inappropriate. That’s not how we go about selecting cases for further review.”

“The IRS would like to apologize for that,” Lerner said.

Lerner’s statement at the ABA conference, however, seems to contradict testimony that then-IRS Commissioner Douglas Shulman made in the Ways and Means Subcommittee on Oversight on March 22, 2012.

At that hearing, Oversight Subcommittee Chairman Charles Boustany (R.-La.) specifically asked Shulman about allegations that the IRS had been targeting Tea Party groups.

House Ways and Means Oversight Subcommittee Chairman Charles Boustany (R.-La.) (J.Scott Applewhite)

Lerner’s statement at the ABA conference, however, seems to contradict testimony that then-IRS Commissioner Douglas Shulman made in the Ways and Means Subcommittee on Oversight on March 22, 2012.

At that hearing, Oversight Subcommittee Chairman Charles Boustany (R.-La.) specifically asked Shulman about allegations that the IRS had been targeting Tea Party groups.

“I’ve gotten a number of letters,” Boustany said at that hearing. “Just recently, we’ve seen some recent press allegations that the IRS is targeting certain Tea Party groups across the country requesting what have been described as owner’s document requests, delaying approval for tax-exempt status, and that kind of thing. Can you elaborate on what’s going on with that? I mean, can you give us assurances that the IRS is not targeting particular groups based on political leanings?”

“Yes,” said Shulman. “No, thanks for bringing this up, because I think there’s been a lot of press about this and a lot of moving information. So, I appreciate the opportunity to clarify. First, let me start by saying, yes, I can give you assurances.”

“And so, what’s been happening has been the normal back-and-forth that happens with the IRS,” Shulman testified. “None of the alleged taxpayers and obviously, I can’t talk about individual taxpayers, and I’m not involved in these, are in examination process. They’re in an application process which they moved into, voluntarily. And so, there’s absolutely no targeting. This is the kind of back-and-forth that happens when people apply for 501(c)(4) status.”

Shulman was nominated as IRS commissioner by President George W. Bush and confirmed by the Senate on March 14, 2008. He left the position on Nov. 9, 2012, and was replaced by acting Commissioner Steve Miller.

After the Associated Press story about Lerner’s statement to the IRS broke on Friday, Chairman Boustany sent a letter to IRS Acting Commissioner Miller pointing out that the Ways and Means Committee had been investigating this matter for more than a year, citing Lerner’s “apology” at the ABA conference, and demanding that the IRS produce certain communications and names by next Wednesday.

“As you know, for more than a year, the Committee on the Ways and Means has been pursuing an active investigation into the IRS’s targeting of conservative groups seeking tax exempt status,” Boustany wrote. “To help the committee fully understand the extent of the agency’s practices, provide the following information by no later than Wednesday, May 15, 2013: 1) Provide all communications containing the words ‘tea party’ ‘patriot’ or ‘conservative.’ 2) Provide names and titles of all individuals involved in this discrimination.”

As reported by the Associated Press, Lerner told the ABA conference that the targeting of groups that included the words “tea party” or “patriot” in their applications had been started by low-level IRS workers in Cincinnati. The AP said that after her talk Lerner told the news agency that high level IRS officials had not known about this targeting.

Back on March 23, 2010, the day after Shulman testified, Mark Levin, president of the Landmark Legal Foundation, wrote to the Treasury Inspector General for Tax Administration calling for an investigation of IRS misconduct in its treatment of Tea Party organizations.

“Recent media reports indicate that the EO Division is using inappropriate and intimidating investigation tactics in the administration of applications for exempt status submitted by organizations associated with the Tea Party movement,” Levin wrote to the IG.

“Landmark Legal Foundation respectfully requests an immediate and thorough investigation to determine whether IRS employees are acting improperly in the evaluation of exempt status applications,” wrote Levin. “This investigation also must determine whether the relevant IRS employees are acting at the direction of politically motivated superiors.”

Three months after Landmark Legal requested the IG investigation, House Oversight and Government Reform Chairman Darrell Issa (R.-Calif.) and Oversight Subcommittee on Regulatory Affairs Chairman Jim Jordan (R.-Ohio) sent a letter to the Treasury Inspector General for Tax Administration also requesting an investigation.

Today, Issa released a July 11, 2012 letter from the inspector general stating that his office “recently began work on the issue.” An IG audit is currently underway.

On Friday afternoon, asked the IRS if it intended to comply with the Ways and Means Committee’s request for the names and titles of people involved in discriminating against Tea Party or conservative organizations and all communications containing the words “tea party” “patriot” or “conservative.” A spokesman said he would check. As this story was posted—only a little more than an hour after the question was first posed–the IRS had not yet responded.

Tax receipts on pace to hit record $2.7T this year, congressional report says

irs_buildingexteriorAs President Obama launches into the next phase of budget negotiations with Congress, recent estimates may lend credence to Republican claims that the federal coffers are well fed on taxes.
The Congressional Budget Office estimates the federal government is on pace to bring in a record $2.7 trillion in tax receipts this fiscal year.
The increase reflects a steady post-recession rise in revenues. They ticked up 6 percent in 2012, but according to the CBO could jump 11 percent in 2013.
The expected tax boost comes after Congress and the White House struck an eleventh-hour deal at the start of the year that allowed for an increase in tax rates for top earners, and for the expiration of a 2-point payroll tax cut. The agreement will play a big role in boosting revenues this year — and is also the No. 1 reason cited by Republicans for not wanting to agree to more tax increases as part of a new budget deal.
“The president got $650 billion of higher taxes on the American people on January the 1st,” House Speaker John Boehner told NBC’s “Meet the Press” over the weekend. “How much more does he want?”
Obama, though, said at the start of the first Cabinet meeting of his second term Monday that he wants to continue to push for “the kind of balanced approach of spending cuts, revenues, entitlement reform that everybody knows is the right way to do things.”
According to historical figures from the White House, the last tax revenue record was set in 2007, when the government raked in nearly $2.6 trillion. By 2009, tax revenue took a dive, before gradually building back up.
The CBO shows that, as a percentage of GDP, revenue is still below the 40-year average of 18 percent. The 2013 figure would represent 16.9 percent of GDP — a full point higher than it was the year before.
The IRS has benefited from a bounty of sources, from increases in corporate income taxes to increases in estate and excise taxes.
Meanwhile, spending is on pace to hit $3.55 trillion in 2013, roughly what it was in 2012. According to the CBO, that represents 22.2 percent of GDP — “a share that is still larger than in any year between 1986 and 2008.”
While Republicans say spending is the problem, both sides agree that cutting discretionary spending alone — or the annual spending that doesn’t go to programs like Medicare, Medicaid and Social Security — will not solve America’s debt and deficit crisis.
With the enactment of the sequester, Congress will cut deeper and deeper into discretionary spending. But costly entitlements will continue to grow, driving up the U.S. debt and also the annual interest taxpayers pay on that debt.

Read more:

Obama Secretly Diverts $500 million to the IRS to Help Set Up Obamacare

There are no such restrictions on our government. Billions of dollars are at its disposal, and disposal is the right word. If the federal General Services Administration wants to take a trip to Las Vegas and spend nearly a million dollars, they can do it. It’s not their money.
Now we learn that a half-billion dollars has been diverted to the IRS “to help set up the president’s controversial health-care law.” So even before the program is up and running, $500 million is being spent on enforcement.
Not only do we have to contend with the IRS and its thousands of pages of regulations, power to tax, and authority to garnish wages, but now we’re going to be at the mercy of this agency when it comes to healthcare.
A new study is showing that there’s going to be a $530 billion shortfall that will be rolled into the federal budget deficit. Research shows “that the law is expected to boost net federal spending by more than $1.15 trillion and add between $340 billion and $530 billion to deficits between 2012-21.”
The White House dismissed the projections as “new math [that] fits the old pattern of mischaracterizations” about the health care law. This is the same type of dismissal that created the housing crisis. There were people in government who were warning that the mortgage loan guarantee programs were a house of cards.
It’s never been about making houses and healthcare affordable. It’s all about control of our lives and making us dependent on the State.
Conde Pallen’s “utopian” novel Crucible Island depicts what happens when the State takes on the attributes of a god. Man looks for a substitute provider so “the individual should have no thought, desire, or object other than the public welfare, of which the State is the creator and the inviolable guardian. As soon as the child is capable of learning, he is taught the Socialist catechism, whose first questions run as follows”:
Q. By whom were you begotten?
A. By the sovereign State.

Q. Why were you begotten?
A. That I might know, love, and serve the Sovereign State always.
Q. What is the sovereign State?
A. The sovereign State is humanity in composite and perfect being.
Q. Why is the State supreme?
A. The State is supreme because it is my Creator and Conserver in which I am and move and have my being and without which I am nothing.
Q. What is the individual?
A. The individual is only a part of the whole, and made for the whole, and finds his complete and perfect expression in the sovereign State. Individuals are made for cooperation only, like feet, like hands, like eyelids, like the rows of the upper and lower teeth.[1
 Welcome to Crucible Island.

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