Taxes

IRS Scandal Strategy: The Democratic and Republican Playbooks


Steven Miller, who was forced out as acting commissioner of the Internal Revenue Service, listens during a House Ways and Means Committee hearing in Washington on May 17

Photograph by Andrew Harrer/Bloomberg

Steven Miller, who was forced out as acting commissioner of the Internal Revenue Service, listens during a House Ways and Means Committee hearing in Washington on May 17

The House Ways and Means Committee has kicked off what will be a long season of recrimination over the Internal Revenue Service’s Tea Party profiling scandal.

Unfortunately, ping-pong questioning by Republicans on the attack and Democrats on the defensive—made murkier by the mumble-grumble of IRS officials who know they’re in trouble—may leave many observers wondering what the whole mess means. What strategies will the two political parties deploy as they sort out the damage?

Clearly stated, if not necessarily persuasive, outlines of those strategies are readily available. Check out the editorial pages of the New York Times and the Wall Street Journal, whose editors are wired into Washington’s partisan war rooms—the Times to the White House, of course, and the Journal to the Republicans on the Hill. In a house editorial entitled “Scandal Machine,” the Times dismisses the IRS debacle as the mundane product of bureaucratic confusion:

The Internal Revenue Service, according to an inspector general’s report, was not reacting to political pressure or ideology when it singled out conservative groups for special scrutiny in evaluating requests for tax exemptions. It acted inappropriately because employees couldn’t understand inadequate guidelines.

President Obama may have fired the IRS commissioner and condemned the targeting of conservative political groups as “outrageous,” but the deeper Democratic strategy will be to turn the tables on congressional Republicans. In the fullness of time, the White House will accuse Republicans of pursuing a witch hunt in response to a back-office snafu. Don’t buy it. Given the enormous power the IRS possesses, and the clear evidence of overreaching already on the public record, it’s far too early to minimize this fiasco as a function of “inadequate guidelines.”

On the other side of the aisle, Republicans are hell-bent on proving that powerful Democrats—possibly the president himself—unleashed the IRS to afflict hapless activists who enjoy dressing up like Ben Franklin. Kimberly Strassel, the Journal’s “Potomac Watch” columnist, urges an instant verdict: “Was the White House involved in the IRS’s targeting of conservatives? No investigation needed to answer that one. Of course it was.” She elaborates:

President Obama and Co. are in full deniability mode, noting that the IRS is an “independent” agency and that they knew nothing about its abuse. The media and Congress are sleuthing for some hint that Mr. Obama picked up the phone and sicced the tax dogs on his enemies. But that’s not how things work in post-Watergate Washington. Mr. Obama didn’t need to pick up the phone. All he needed to do was exactly what he did do, in full view, for three years: Publicly suggest that conservative political groups were engaged in nefarious deeds; publicly call out by name political opponents whom he’d like to see harassed; and publicly have his party pressure the IRS to take action.

This version of “how Washington works” has the advantage of not requiring its proponent to prove actual White House involvement in IRS misdeeds. According to Strassel, merely by observing—accurately—that since 2010, Republicans have gained the upper hand in the campaign finance arms race, Obama and his Democratic colleagues were craftily instructing revenue agents to politically profile the Tea Partiers.

It may turn out that the White House ordered IRS-gate; let’s find out by collecting all the facts. But Democrats’ complaints about tax-exempt “social welfare” organizations that can conceal their donors while running political attack ads were legitimate. So were rejoinders from Republican operatives such as Karl Rove that Democrats’ hands were just as dirty in this regard.

Both parties have exploited our porous campaign finance regulations. In recent years, the Republicans have done so more energetically. What the IRS (and the Federal Election Commission) should have been doing all along was challenging the privileged status of the attack-ad factories, forcing them at a minimum to disclose their financial supporters.

A parting thought from a sharp nonpartisan observer: “The irony here is that the IRS is going to get punished, justifiably, for its heavy-handed tactics with the Tea Party committees,” says Melanie Sloan, the executive director of Citizens for Responsibility and Ethics in Washington (CREW). “But the larger problem is that the IRS does nothing to enforce the law against the groups that are abusing a broken system on a much bigger scale.”

Barrett_190
Barrett is an assistant managing editor and senior writer at Bloomberg Businessweek. His new book, Law of the Jungle, tells the story of the Chevron oil pollution case in Ecuador.

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