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IRS scandal: employees speak



Logo of the Internal Revenue Service, the federal income tax authority

Two key employees at the IRS spoke today to the House Oversight and Government Reform Committee. They confirmed what the Committee hinted at yesterday. The Office of the Chief Counsel if the IRS had a hand in the IRS scandal. Those in that office did not merely receive information from the Cincinnati Office on Tea Party, Patriot, and other groups. They asked for it.

IRS scandal: the scapegoats

The two key witnesses at today’s IRS scandal hearings were:

  • Carter Hull, a senior Tax Law Specialist with 48 years of service.
  • Elizabeth Hofacre, who worked in the Cincinnati Office.

The Oversight Committee took evidence from Mr. Hull and Ms. Hofacre yesterday, before they testified in public. The Committee sent this letter to Acting Commissioner Daniel Werfel yesterday. (See also this piece by Jerome R. Corsi at WND.)

The trouble began in the winter of 2010-2011, after the realigning election that gave Republicans control of the House of Representatives. By then, the IRS Tax-Exempts Division had several Forms 1024 (Application for Recognition of Exemption under Section 501(c)(4)) from “Tea Party” and similar groups. Mr. Hull at first handled those applications as he always had. He sent “development letters,” asking for more information. He got it. He was all set to send “determination letters,” which:

  • Recognize the exemption.
  • Assign an identifying number to each group.
  • Instruct them, from then on, to file Form 990, the “information only” return from tax-exempt groups.
The IRS scandal gained a new face - in Congress.

New York office of the IRS. Photo: Matthew G. Bisanz, CC BY-SA 3.0 Unported License.

But this did not happen. Instead, Lois Lerner, the head of the division, said all such applications needed a “multi-level review.” (This same Lois Lerner tried to “take the Fifth,” and bungled it.) And so those applications ended up going to the Chief Counsel’s office.

Mr. Hull never saw anything like this in his 48 years of working in and for the IRS. The applications went to the Chief Counsel’s office. And there they sat.

But the game did not end there. The Chief Counsel’s office asked for the second round of information, including donors’ lists and descriptions of political activity in 2010. Equally astounding, the Chief Counsel waited until August of 2011 to ask this. This, and not any swamping of the Cincinnati Office, caused a backlog.


Elizabeth Hofacre backed this up. She knew those applications were fine. But her supervisors told her to wait for guidance – from the Washington headquarters. The guidance never came.

Until suddenly Hofacre heard people saying that rogue agents in Cincinnati held up those applications. That phrase had to include her. As she told the Committee today, she felt as if she’d suffered a “nuclear strike” when she heard that.

So now the IRS scandal has two parts:

  1. The Tea Party did not decide to sit on their hands in the 2012 election. The IRS nailed their knees to the floor.
  2. And when the IRS got caught, they blamed underlings, thinking they could bully them.

But of course some things stink so badly, that those they happen to, suddenly decide they have nothing to lose, and nothing to fear. Carter Hull and Elizabeth Hofacre seem to have reached that point.

IRS scandal: attempted cover-up

But then something happened at the hearings that should take people’s breath away. Democrats on the Oversight Committee tried to make light of the IRS scandal, and even cover up its key findings.

Elijah Cummings, D-Md., was, by all odds, the worst. He is the Ranking Member. The American people have the right to expect more, and demand more, from him, when something this ugly is going on. So what did he do? He opened by denying that “the Republicans” had any evidence. How he could say that in light of the letter to Commissioner Werfel only yesterday, defies comprehension. Equally breathtaking, he is brazen enough to publish that opening statement on the House web server.


As the hearing went on, Mr. Cummings’ case broke down. And so, as a direct result, did he. He acted exactly like a little boy caught with his hand in the cookie jar. And Chairman Darrell Issa, R-Calif., called him on it.

Eleanor Holmes Norton, D-D.C. (who does not have a vote), was the second worst. J. Russell George, the Treasury Inspector General for Tax Administration, testified to his own findings of targeted groups. Ms. Norton RANTED AND RAVED AND SCREAMED AT THE TOP OF HER LUNGS at him, trying to get him to say that liberal groups somehow faced similar delay. They did not. Not, at least, in the same proportion. (Those organizations that did face delay, probably faced that because they criticized the Obama administration from the left. Obama has never in his life been willing to accept criticism of himself as legitimate.)

In sum, the Democrats could no longer deny that Tea Party groups did not get their determinations, and so could not raise funds.

IRS scandal: perspective of another non-profit

Your correspondent happens to be Secretary-Treasurer of the Creation Science Hall of Fame.That organization incorporated in August of 2012 as a non-profit corporation. That State charter was enough for CSHF not to pay State income tax. But: our accountants advised us that CSHF must file Form 1120, the Corporate Income Tax Return, until such time as we actually get a Determination in hand from the IRS. And to our certain knowledge, a donor tabled a decision to donate until such time as we could show an IRS determination and listing as a tax-exempt public charity under Section 501(c)(3).

So: do not let Alan Colmes, or any other talking head, tell you that “you can act like a non-profit until you get your recognition.” Even an entity acting like a non-profit must still pay the corporate income tax until the determination comes through.


(Note: CSHF did receive a determination of tax-exempt status under Section 501(c)(3) in May of 2013. CSHF can only conclude that the advocacy of creation science was under the Obama political radar.)

IRS scandal: summing up

In sum: the clumsy attempt to blame the IRS scandal on “two rogue agents in Cincinnati” failed today. The orders came from above. And the head of the office from which they came, is one of two IRS officials whom the President appoints. (The other is the Commissioner himself.) More to the point, the extra scrutiny had a political motive. Two veteran “suits” at the IRS know: nothing else can explain the orders they got – or the treatment they got when the IRS scandal blew up.

The Democratic Party must know the IRS scandal reaches even higher than the Chief Counsel’s office. Why else would Representative Cummings and Delegate Norton so disgrace themselves at today’s hearing? Why did they even try to suggest that Mr. George, a holdover from the Bush administration, was somehow trying to get partisan revenge?

If it is partisan to protest when the IRS shuts out grassroots activists on one side of an election from taking part in that election, then maybe a little more partisanship is just what people need to protect their liberties. What shall we call a party whose members say that liberty itself benefits the other party? CNAV has a few suggestions:

Communist Party of the USA. (Sorry – taken.)


National Socialist American Community Organizers for Reform Now. (Hm-m-m-m. Sounds familiar.)

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Terry A. Hurlbut has been a student of politics, philosophy, and science for more than 35 years. He is a graduate of Yale College and has served as a physician-level laboratory administrator in a 250-bed community hospital. He also is a serious student of the Bible, is conversant in its two primary original languages, and has followed the creation-science movement closely since 1993.

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