Internal Revenue Service officials on Thursday tried to tame another scandal plaguing the agency, apologizing to lawmakers for a lavish 2010 conference in California that included an elaborate Star Trek spoof training video.
“After I saw the production, I fully regretted it,” said Faris Fink, the IRS small business commissioner who played the character Spock in the Star Trek parody that included a tax-themed skit. “It’s embarrassing.”
The IRS, already under a cloud of scandal related to the targeting of conservative groups, this week faced fresh criticism over a Treasury watchdog report on wasteful spending.
Lawmakers on the House Oversight and Government Reform Committee accused the agency of grossly misusing taxpayer money when it spent at least $4.1 million at the conference on luxury hotel rooms, expensive training videos and outside speakers on topics such as leadership through painting.
A Treasury report released this week condemned the conference and said $3.2 million of the cost was funded by money set aside to hire enforcement employees.
Fink on Thursday said the IRS did not keep full records of the Anaheim, California, conference and warned the overall cost could have been as high as $5 million.
The conference scandal has further eroded the public image of the IRS, which is under fire after it was revealed last month that workers in a Cincinnati, Ohio, field office targeted conservative groups for intense scrutiny when considering applications for tax-exempt status.
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The Internal Revenue Service, already under fire after officials disclosed that the agency targeted conservative groups, faces increased scrutiny because of an inspector general’s report that it spent about $50 million to hold at least 220 conferences for employees between 2010 and 2012.
The report by the Treasury Department’s inspector general about conference spending is set to be released Tuesday. The department issued a statement Sunday saying the administration “has already taken aggressive and dramatic action to reduce conference spending.”
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Thanks to Obamacare, all Americans will now have to submit their health insurance information to the Internal Revenue Service (IRS). Sadly, this new requirement comes at the same time that serious questions have been raised about the IRS’s ability to manage personal health records competently.
As American Enterprise Institute scholar Scott Gottlieb noted:
An unnamed health care provider in California is suing the IRS and 15 unnamed agents, alleging that they improperly seized some 60 million medical records of 10 million Americans, including medical records of all California state judges, on March 11, 2011.
The complaint alleges that IRS agents exceeded the scope of their search warrant, seizing not just financial records, but “information on psychological counseling, gynecological counseling, sexual and drug treatment, and other sensitive medical treatment data.”
The alleged data seizure occurred at roughly the same time in which employees in another division of the IRS targeted tea party and other conservative groups due to their political beliefs. If true, these new allegations regarding seized medical records would further undermine trust in the IRS’s ability to conduct its affairs properly and to manage the sensitive and confidential information all Americans submit to the agency every year.
As this week’s entire series has shown, the IRS’s reach within Obamacare seemingly knows no bounds. Armed with new bureaucrats and funded by a massive spending blitz, the IRS will implement trillions of dollars in tax increases; issue new regulations, edicts, and orders; impose new paperwork burdens on all Americans; and increase the scope of government intrusion into the lives of ordinary, law-abiding citizens.
Prior to the recent scandals, many Americans thought the IRS could not be trusted to implement Obamacare in a competent and impartial manner. Now they know it. It’s one more reason why Congress should repeal Obamacare once and for all.
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Embroiled in scandal, the IRS has replaced the official who supervised agents involved in targeting Tea Party groups.
Lois Lerner, IRS director of exempt organizations, refused to answer questions by a House committee Wednesday, saying she did nothing wrong but was nevertheless invoking her Fifth Amendment right not to testify against herself.
“I have not done anything wrong. I have not broken any laws. I have not violated any IRS rules and regulations, and I have not provided false information to this or any other congressional committee,” Lerner said.
She was replaced Thursday by Ken Corbin, a 27-year IRS veteran who had a deputy director in the wage and investment division.
In announcing the change in an e-mail to IRS employees, the agency’s new acting commissioner, Danny Werfel, did not mention Lerner. Administration and congressional sources told news organizations that she was placed on administrative leave.
The move came hours after Sens. Carl Levin, D-Mich., and John McCain, R-Ariz., who lead the Senate Permanent Subcommittee on Investigations, sent Werfel a letter urging him to suspend Lerner “immediately.”
Lerner was the IRS official responsible for the office in Cincinnati that created a “be on the lookout” list for tax-exempt applications from groups using the words “tea party,” “patriot” and “9/12 project” in their names. Those applications were held up for more than a year while applications from liberal groups requesting similar status were routinely approved, a USA TODAY review found.
An audit by the IRS inspector general found that Lerner tried to immediately correct that list when she learned about it in 2011 but replaced it with criteria that included groups “critical of how the country is being run.” Members of Congress from both parties want to know why she never informed Congress — even under direct questioning.
Levin and McCain wrote that they believe that Lerner “failed to disclose crucial information concerning the IRS’s inappropriate targeting of some conservative … organizations” during the committee’s investigation into how the IRS enforces the law for tax-exempt 501(c)(4) groups.
“Given the serious failure by Ms. Lerner to disclose to this Subcommittee key information on topics that the Subcommittee was investigating, we have lost confidence in her ability to fulfill her duties as Director of Exempt Organizations at the IRS,” the senators wrote. “Ms. Lerner’s continued tenure in the office she holds, where she is responsible for overseeing 1.6 million tax-exempt organizations, would erode public trust and confidence in the IRS and its professional integrity. We believe that the immediate removal of Ms. Lerner from office would be a vital step in helping to restore public trust in the agency.”
Last week, acting IRS commissioner Steven Miller resigned at the request of President Obama.
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General Motors (NYSE: GM ) figures its re-entry into the S&P 500 club will be quite soon, even though the company is still in the early stages of its turnaround. There’s no denying that the U.S. automotive recovery is going well for Detroit. It’s only been a few years since the ugly recession, financial collapse, and ensuing bailouts for two of Detroit’s Big Three, the exception being Ford (NYSE: F ) . And all three companies have gained market share this year in the U.S. at the expense of Japanese rivals Toyota (NYSE: TM ) and Honda (NYSE: HMC) . GM just recorded its 13th consecutive profitable quarter, so the nearly $50 billion that taxpayers like you and I funded to save GM was a huge success. Right?
Most people don’t realize how much GM actually took from taxpayers, and how little it’s given back. If I told you GM has repaid only $6.7 billion out of the $49.5 billion in loans it was given, would you be surprised? If I told you the expected loss to the U.S. Treasury of roughly $12 billion isn’t even a fraction of the real cost, would you believe me? If not, you might be in for a nasty surprise.
Bailout by the numbers The Treasury plans to exit its entire holdings of GM by next April. By the end of this past March, the government had reclaimed just over $30 billion of its investment, leaving a substantial loss. While the government says it didn’t anticipate making a profit from saving the auto industry, the other $419 billion in TARP funds were 94% recovered — making GM a big loser. At today’s GM stock price, the Treasury looks to lose between $11 billion and $12 billion, unless the stock price changes drastically.
Yet that number doesn’t tell the whole story.
Consider that the only true loan GM received from the U.S. government was for $6.7 billion at 7% interest, which it has since repaid. The majority of the nearly $50 billion was in stock purchases by the U.S. Treasury at a price that GM didn’t lose money when recently rebuying shares.
Also consider that GM was “gifted” tax losses from the “Old GM” corporation in amounts of $45 billion. What that really means is the “New GM” can write off current profits up to that amount and not pay taxes on it. That’s a complete joke, in my opinion.
Think of it like this: GM took our tax dollars to save its company, and then after turning 13 quarters of profit, it still isn’t paying a single income-tax dollar. Are you kidding me? News flash: My recent taxes cost me and my wallet a bundle, and I didn’t turn billions in profit.
Too often, people assume that since GM received nearly $50 billion in taxpayer funding, and when people hear that GM has fully repaid its obligations, we assume that means it repaid the said $50 billion. That couldn’t be further from the truth. GM has merely paid its initial pure loan of $6.7 billion with interest, and rebought some of its own shares from the Treasury — often at a cheaper price. Most of us taxpayers don’t even realize Ford paid an effective tax rate of 26% in 2012, compared with 0% for GM — a complete joke to Ford, which didn’t take any of our taxpayer dollars.
Bottom line You’ll see in my disclosure that I own stock in both Ford and GM. But I own stock in both for completely different reasons. I believe Ford has excellent management and is way ahead of GM in operating efficiency and global consolidation of platforms — helping it create net income off lower revenue. It’s also way ahead in creating value and quality in segment trends dominated by fuel efficiency — not to mention that its F-Series has been the best-selling truck for 36 years.
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Reading the highly critical report by the Internal Revenue Service’s auditor, you get the sense that rogue, lower-level agents ran amok, writing up watch lists, targeting conservative agencies, and stalling their applications for tax-exempt status.
At least IRS management has painted a picture of misguided underlings who acted “inappropriately,” finally offering a mea culpa a couple years after claims that Tea Party groups being hung up, even harassed, by tax agents began filtering in.
Lois Lerner, director of the IRS’ exempt organizations unit, apologized a week ago for front-line employees who inappropriately flagged for further review organizations with the descriptors, “tea party” or “patriot.”
“We had a shortcut in the process. It wasn’t appropriate. We learned about it and we fixed it,” Lerner said, emphatically denying that the segregation of applications and the lengthy delays in processing them merely based on conservative-sounding names had absolutely nothing to do with partisan politics.
But a report released late Tuesday by the Treasury Inspector General for Tax Administration, the independent overseer of the IRS, points to lax management and at least ignorance of federal code governing tax-exemption review. And while TIGTA may not employ the term “targeted” in its scathing review, the auditor blasts the IRS for singling out conservative groups, asking them a host of unnecessary questions and, in many cases, grinding the application process to a halt.
More than anything, the IRS’ “inappropriate” measures threaten public confidence, the report notes.
“The mission of the IRS is to provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all. According to IRS Policy Statement 1-1, IRS employees accomplish this mission by being impartial and handling tax matters in a manner that will promote public confidence,” the audit states.
“However, the criteria developed by the (IRS) Determinations Unit gives the appearance that the IRS is not impartial in conducting its mission. The criteria focused narrowly on the names and policy positions of organizations instead of tax-exempt laws and Treasury Regulations.”
The audit depicts agents in 2010, earlier than IRS brass previously had stated, pulling out 501(c)(4) applications with “Tea Party, Patriots, or 9/12 in the organizations name,” as well as “political-sounding names.” In May 2010, the Determinations Unit began developing a spreadsheet that would become known as the “Be On the Look Out” list, according to the audit. By August, the unit began distributing the first formal BOLO list.
President Barack H. Obama’s outrageous seizure of the Associated Press’s phone records, allegedly to discover sources of leaks, should surprise no one. Obama has relentlessly pursued leakers ever since he became president. He is fast becoming the worst national security press president ever, and it may not get any better.
It is believed that Obama’s Justice Department sought AP’s records to find the source of a leak that informed an AP story about a failed terrorist attack. What makes this action particularly egregious is that Justice didn’t tell AP what it was doing until two months after it obtained the records. This not only violates Justice Department guidelines for subpoenas of this sort, but also common sense, decency, and the First Amendment.
Under the guidelines, subpoenas concerning the press cannot be issued without the express approval of the Attorney General. Further, before a subpoena is issued, the government is honor bound to negotiate with the party to which it is directed.
While Attorney General Eric H. Holder, Jr. may have approved the subpoena, he apparently never told AP about it. In the meantime, the Justice Department for two months has had all the details of AP’s newsgathering. AP could bring a lawsuit to declare its First Amendment rights have been violated and seek a return of its records. Gary Pruitt, President of AP, has already made a demand for them.
While this legal action by AP is possible, the government has picked the one federal jurisdiction most favorable to it for obtaining the source of leaks, namely, the federal court in the District of Columbia. Its subpoenas were directed to telephone companies located in D.C.
The Liberty Report Take: While Neocons, GOP Establishment, and general Conservative folks would all probably say Obama is the worst President not just for Freedom but overall, he probably has a ways to go before reaching the level of his predecessor W. or Richard Nixon. After all, Nixon was the man who enhanced a Big Brother Government, got us off the gold standard, and started the unconstitutional war on drugs.
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President Barack Obama vowed Wednesday to hold accountable those at the Internal Revenue Service involved in the targeting of conservative groups applying for federal tax-exempt status, beginning with the resignation of the agency’s acting commissioner who was aware of the practice.
In a brief statement delivered to reporters in the East Room of the White House, the president announced that Treasury Secretary Jack Lew had requested — and accepted — the resignation of acting IRS Commissioner Steven T. Miller.
The president said the “misconduct” detailed in the IRS Inspector General’s report released Tuesday over the singling out of conservative groups is “inexcusable
“Americans have a right to be angry about it, and I’m angry about it,” Obama said.
“It should not matter what political stripe you’re from. The fact of the matter is, the IRS has to operate with absolute integrity.”
Miller was made aware of the agency’s targeting of conservative groups in May 2012, according to the IRS, while serving as deputy IRS commissioner. He did not tell Congress about it when he testified before an oversight committee in July despite being questioned on the issue. Miller was named acting IRS commissioner in November.
Obama pledged to work “hand in hand” with Congress as it investigates, and he vowed new safeguards will be put in place at the IRS so that “this doesn’t happen again.”
In an internal message to IRS employees obtained by CNN, Miller said he would be stepping down as commissioner in early June.
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