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The hearing focused on the agency’s targeting of conservative groups seeking tax-exempt status, including those with names that included “tea party” or “patriot.” “You get a letter from you folks, or a phone call, it’s with terror that you look at it, and now this kind of reconfirms that--you know what--they can do almost anything they want, to anybody they want, anytime they want,” Kelly said. “This is very chilling for the American people.”
Kelly noted that Miller’s resignation would not bring closure to the growing scandal. “This is a Pandora’s box that’s been opened and I don’t know that we can get the lid back on it,” Kelly said. “I’m really concerned, I gotta’ tell you, where you’re sitting, you should be outraged -- but you’re not,” Kelly said. “The American people should be outraged, and they are.”
Calling it a “huge blow to the faith and trust the American people have in their government,” Kelly again questioned the power the IRS holds over the American people. “I am more concerned today, than I was before and the fact that you all can do just about anything you want to anybody, you know you can put anybody out of business that you want, anytime you want,” Kelly said, adding that the IRS does not tolerate it when taxpayers do not comply with the law. “When the IRS comes in, you’re not allowed to be shoddy, you’re not allowed to be run horribly, you’re not allowed to make mistakes, you’re not allowed to do one damn thing that doesn’t come in compliance,” Kelly said. “If you do, you’re held responsible right then. “I just think the American people have seen what’s going on right now in their government, this is absolutely an overreach and this is an outrage for all America,” Kelly said.
Committee chairman Dave Camp (R-Mich.) gaveled the session to order several times before the hearing continued. More hearings are expected on the IRS revelations in the coming weeks.
Congressman Gets Standing Ovation for Telling IRS It Strikes Fear Into Americans | CNS News
“Was the IRS using inappropriate criteria in its review of organizations applying for tax-exempt status?” George said. “Yes. Was the IRS delaying their applications? Yes. And finally, did the IRS ask inappropriate and unnecessary questions of applicant? Yes.” The House Ways and Means Committee hearing focused on George’s May 14, 2012, IG report and the testimony of Acting IRS Commissioner Steve Miller.
Miller told the committee that he had not prepared a written statement, but he would answer questions. He categorized the broadening scandal at the agency by blaming it on personnel making mistakes. “Foolish mistakes were made,” Miller said.
Committee Chairman Dave Camp (R-Mich) had a different characterization of the charges against the IRS. “This revelation goes against the very principles of free speech and liberty upon which this country was founded,” Camp said. “The blatant disregard with which the agency treated Congress and the American taxpayer raises serious concerns about leadership at IRS.”
http://cnsnews.com/news/article/ig-irs-scandal-clear-evidence-wrongdoing
A Virginia Medicaid Fraud Control Unit (MFCU) investigation, which found that Abbott Laboratories illegally marketed the seizure drug Depakote for non-approved uses, was concluded when a settlement was reached in September 2011. A final court order was issued in October 2012. However, $125 million owed to Virginia as part of the plea agreement has yet to be paid, and federal officials place the blame on the IRS. “Federal officials have refused to release approximately $125 million that is owed to Virginia from a 2012 Medicaid fraud case Attorney General Ken Cuccinelli’s office investigated,” reads a statement from Cuccinelli’s office. “Federal officials have said that the IRS has refused to properly fill out post-case paperwork for almost a year, which is holding up the disbursement intended for Virginia law enforcement,” the statement said.
According to Cuccinelli’s office, the IRS and federal government “have known for nearly two years” what Virginia’s fraud unit was owed out of a $198.5 million asset forfeiture, which was part of Abbott’s plea agreement. The Treasury Department initially blamed the federal budget sequester for why Virginia has not received the money, Cuccinelli said, despite the fact that the funds come from the private sector, to be paid by Abbott Laboratories. “Now the hold-up is the IRS, which, according to the Treasury Department, refuses to complete its paperwork so the money can be properly distributed,” Cuccinelli said. “The exact amount of the forfeiture was known since September 2011 and finalized in a May 2012 plea agreement.” “It doesn’t take a year to complete the paperwork,” he said.
Cuccinelli implied that he believes the delay may be related to the recently uncovered scandal at the agency, where conservative groups were targeted and had their applications for non-profit status delayed for up to three years. “For months, we thought this was just incompetence by the IRS, but with its refusal to properly fill out fairly simple paperwork for an entire year, we are left to wonder if this involves more deliberate motives,” he said. “Virginians need to know that for eight months the administration has been withholding money that is supposed to be used to protect first responders’ lives.”
The attorney general said he intends to use the money for police departments, equipment, training and gang and gun crime reduction programs. “During the eight months the Treasury Department has been withholding the money, they have been depriving Virginia law enforcement of tools to make their jobs safer,” he said. “The interest alone on Virginia's share of the money in those eight months would have totaled more than a half-million dollars. That interest could have purchased more than 1,000 bulletproof vests for police officers and sheriffs’ deputies.” The investigation into Abbott Laboratories found that the company was illegally marketing the prescription drug Depakote to treat dementia patients in nursing homes, and for schizophrenia. The drug is intended to treat epileptic seizures. At the time of this story, the IRS did not respond to a request for comment.
Cuccinelli: IRS Refusing to Release $125 Million Medicare Fraud Settlement to Virginia | CNS News
Based on a cost-benefit analysis, “in many instances, it’s more expensive for them to go after those who gamed the system or cheated the system than to in effect write it off,” George told Rep. Harold Rogers (R-Ky.) when he asked what was being done to tackle the problem. “Mr. George, it was your report that the IRS had overpaid low-income tax credits by up to $13.6 billion in one year – 2012. When Secretary [Jack] Lew was before this subcommittee in late April, I made clear to him in no uncertain terms that this was unacceptable. That sum was more than the entire budget of the IRS. What steps are being taken, Mr. George, to tackle that problem?” Rogers asked.
George called it “one of the intractable problems confronting the Internal Revenue Service.” “Refundable tax credits, which again are credits that can be paid to people who do not have tax obligations, once the money is out the door, it’s extremely difficult for the Internal Revenue Service to collect it,” he said. George deferred to acting IRS commissioner Daniel Werfel to “define their procedures and policies.” “And we’re just talking one instance in terms of the Earned Income Tax credit … the Child Tax credit among many other credits. This is a very, very difficult issue for the IRS to confront, and it’s a longstanding one, sir. This is something that Congress has been looking at for decades,” George added.
“This is not a small problem. This is a huge amount of money. It’s more than the budget of the entire agency as I said. Has anyone been fired over this?” Rogers asked George and Werfel. “Not to my knowledge,” George and Werfel replied. “Will there be?” Rogers asked. Werfel responded that it would depend on whether those payments were paid out “advertently in error versus inadvertently in error.” “I think to answer your question in terms of whether anyone should be fired, it really goes to the question of whether those payments were paid out advertently in error versus inadvertently in error,” Werfel said. “If there is some underlying malfeasance associated with these improper payments, then certainly, but in most cases – and this is an area that I just coincidentally happen to have some expertise on from earlier parts of my career in the federal government – in most cases, the errors that are made are not due to malfeasance of the underlying employee,” he said. “It’s due to complexity in the programs and complexity in identifying the right eligibility criteria. I’m not making excuses for it – I’m just suggesting that there are more fixes other than employee dismissal,” Werfel added.
He noted that since there is no “global childhood residency database,” it is “extremely difficult to validate” whether someone who claims the earned income tax credit has “lived with their dependent child for more than six months or not.” “Again on this particular question of improper refund papers – if you can indulge me – I think one of the causes of these improper payments orients around the complexity of the code and the complexity of the eligibility criteria,” Werfel said.
MORE
The report said that during the two years in question agency employees sent Citibank a total of 325 bad checks written on personal accounts that had insufficient funds to cover them, that agency officials with top-secret security clearances had their charge accounts suspended for failure to pay the balances, and that the IRS had a tendency of being overly lenient in disciplining those who misued the cards.
Despite the more than 1,000 IRS employees who misused the charge cards, the inspector general's report found that the IRS did a "generally effective" job in controlling its employees use of the cards. "We found that the IRS was generally effective in implementing travel card controls," said the IG report. "However, in some instances controls were not implemented effectively, which increased the risk for misuse and resulted in some travel card misuse going undetected." The report, which is dated April 18, 2013, was released on May 29.
IRS employees who misused charge cards included an executive-level official, a criminal investigator, and multiple employees with security clearances. We found that 15 cardholders with either secret or top-secret clearances had their travel accounts suspended due to their failure to pay outstanding balances, said the IG report. Two other cardholders with secret and top-secret clearances presented NSF [non-sufficient funds] checks to Citibank for payment of their travel card balance.
These were not the only IRS officials who wrote non-sufficient-fund checks after passing government background checks. In addition, said the inspector general, 94 cardholders serving public trust positions requiring moderate and high-level background checks wrote one or more NSF checks, and 36 had their accounts charged off [written off as a loss by Citibank] due to their failure to pay outstanding balances. For example, said the IG, a tax compliance officer wrote seven NSF checks in FY 2011 while occupying a position that required a moderate-risk background investigation.
The inspector general determined that the IRS had detected most, but not all, of the bad checks that IRS employees sent to Citibank. Our analysis of the NSF check control review for FY 2011 found that the IRS identified 110 (99 percent) of 111 of the NSF checks that we identified during our review, said the IG report. However, during the FY 2010 NSF check control review, we found that the IRS did not identify 77 (36 percent) of 214 NSF checks due to errors in extraction. This occurred because the IRS did not select the correct NSF code in the Citibank transaction data.
- See more at: IG: More Than 1,000 IRS Employees Misused Government Charge Cards; Wrote 325 Bad Checks | CNS News
The Internal Revenue Service is out of control. With each day, it gets worse. Let's start with the IRS scheme to secretly target conservative groups. We now know this program was widespread and has deep connections with the national IRS office in Washington, D.C. What we still don't know is how all of this began and who ultimately made the decision to launch this invasive scheme. The fact is the IRS is in complete disarray. Lois Lerner, the Director of Exempt Organizations, has been put on administrative leave, but apparently still has access to her IRS computer and taxpayer data of these conservative groups.
Let's not forget - it was Lois Lerner who admitted to this targeting scheme at a meeting of the American Bar Association in early May (after she planted a question in the audience). She claimed that this campaign originated with a couple of low-level employees out of the agency's Cincinnati office. The claim is not sitting well with employees in the Cincinnati office who likened Lerner's finger-pointing as a "nuclear strike" on the Cincinnati office. And, more importantly, the claim is bogus - it just doesn't square with the facts.
We know this scheme was widespread and had the approval and participation of top IRS officials in Washington. In addition to correspondence being sent out of the Cincinnati office, our clients also received questionnaires from the Washington, D.C. office as well as two offices in California - El Monte and Laguna Niguel. Further, we have letters signed by Lois Lerner herself - 15 letters from her to our clients - demanding additional information that was beyond the scope and constitutionality of what the IRS is permitted to ask.
We're moving forward with our federal lawsuit against the IRS representing 25 conservative groups that were unlawfully and unconstitutionally targeted by the IRS simply because of their beliefs. In fact, since we filed the suit a couple of weeks ago, we have been inundated with requests from other conservative groups that were also targeted by the IRS. We will be amending our complaint in the next few weeks adding additional plaintiffs to our lawsuit. This week, we heard Rep. Elijah Cummings, the top Democrat on the House Oversight and Government Reform Committee, declare the IRS scandal was over. The case, he said, was solved. No one believed that and he had to walk back that comment days later and admit the obvious - the IRS scandal is not solved. Not even close.
- See more at: An IRS Out of Control | CNS News
