My Last (?) Post About the Section 501(c)(4) Application Controversy
First, two months ago the U.S. Department of Justice announced that it would not reopen the criminal investigation of former IRS Exempt Organizations Director Lois Lerner, to howls of fury from her critics in Congress.
Then the Treasury Inspector General for Tax Administration released a new report that found a number of left-leaning organizations that had applied for section tax-exempt status had also had their applications subject to additional review and/or been subject to unnecessary questions. The report did not undermine TIGTA’s previous finding that the IRS had used inappropriate criteria to identify applications for additional scrutiny, or that many right-leaning organizations had been selected as a result of that criteria, but it muddied the waters regarding how politically biased the application process actually was and provided further support for the argument that the problems with that process likely reflected incompetence more than malevolent intent. (More coverage: Washington Post.)
Late last month the U.S. Department of Justice announced the settlement of two pending lawsuits relating to the controversy, including the one class action suit. According to a report by a CNN, the settlements did not involve the payment of any monetary damages but included an apology from the IRS. The NY Times later reported, however, that one of the settlements involved a seven-figure payment, although the exact amount and other details were not available. The two settled cases (assuming court approval of the settlement in the class action case) are NorCal Tea Party Patriots v. IRS (the class action) and Linchpins of Liberty v. United States. (More coverage: Fox News, Washington Post.) By my count there is still a pending lawsuit brought by True the Vote against the IRS, as well as Freedom Path’s lawsuit against the IRS (set for trial in summer 2018), so this settlement is not quite the end of all litigation.
Finally, earlier this month IRS Commissioner John A. Koskinen reached the end of his 5-year term. Despite calls for his removal or even impeachment because of the IRS’ handling of the controversy’s investigation, President Trump chose not to ask him to step down and Congress did not take any steps to begin the impeachment process. The Administration has not nominated his successor, with Assistant Secretary for Tax Policy David Kautter currently serving as interim IRS Commissioner. Coverage: N.Y. Times.
Lloyd Mayer