Taxpayers are having a hard time reaching the IRS on the phone and resolving issues.
Senate Finance Committee Chairman Orrin G. Hatch, R-Utah, and ranking member Ron Wyden, D-Ore., on August 5th released the committee’s investigative report detailing the probe into the IRS’s treatment of 501(c)(4) organizations applying for tax-exempt status. The report was delayed for more than a year after the IRS informed the committee that it had not been able to recover a large number of potentially responsive documents that were lost when former Exempt Organizations Division Chief Lois Lerner’s hard drive crashed in 2011.
The report follows a detailed, 41-question letter sent by the committee on May 20, 2013, to the IRS requesting information about the alleged targeting by the IRS of certain social welfare organizations applying for tax-exempt status based on those organizations’ presumed political activities. That letter marked the beginning of a bipartisan investigation by the committee into the IRS’s activities related to the review of tax-exempt applications and related issues raised by the Treasury Inspector General for Tax Administration (TIGTA) in a May 14, 2013, report.
In June 2014, the committee learned that Lerner had experienced the hard drive failure in 2011, which raised questions about the IRS’s ability to produce all the documents necessary to complete the Senate Finance Committee investigation. Hatch and Wyden then asked TIGTA to investigate the matter.
The investigation found that IRS management “failed to provide effective control, guidance and direction” over the processing of applications for tax-exempt status between the years 2010 to 2013. In addition, it discovered that Lerner became aware of the Tea Party applications—which served as the basis for the investigation—in early 2010, but failed to inform her superiors about their existence.
The report stated that, “while under Lerner’s leadership, the Exempt Organizations Division undertook no less than seven poorly planned and badly executed initiatives aimed at bringing the growing number of applications from Tea Party and other groups to decision.”
“This bipartisan investigation shows gross mismanagement at the highest levels of the IRS and confirms an unacceptable truth: that the IRS is prone to abuse,” Hatch said in a statement. Wyden, however, said the investigation “showcases pure bureaucratic mismanagement without any evidence of political interference.”
Hatch made several recommendations following the report, including: having the IRS track the age and cycle times of applications for tax-exempt status to detect backlogs early in the process and allow management to take steps to address those backlogs; a list of overage applications should be sent to the commissioner on a quarterly basis; internal IRS guidance should require that employees reach a decision on applications no later than 270 days after the IRS receives that application; and having minimum training standards established for all managers within the EO Division to ensure that they have adequate technical ability to perform their jobs.
