UPDATED: Timeline Of IRS Tax Exempt Organization Scandal

May 7 2014, 8:14pm CDT | by

Despite today’s Contempt of Congress vote in the House, the tax exempt organization scandal at the Internal Revenue Service didn’t start with Lerner. And it won’t end with Lerner.

As before, the further we get away from the onset of the scandal, it’s easy to forget the chain of events. And context is important. So here’s an updated timeline with highlights of what happened and when:

  • July 2008. In the run up to the presidential election, Citizens United, a conservative lobbying group, wanted to air a series of commercials promoting a film targeting Hillary Clinton. The United States District Court for the District of Columbia ruled that they couldn’t, finding that it was a violation of the Bipartisan Campaign Reform Act of 2002 (also known as the McCain–Feingold Act). The group appealed.
  • August 18, 2008. The U.S. Supreme Court agreed to hear the matter and put it on the docket as No. 08-205.
  • March 24, 2009. Oral arguments began in Citizens United v. Federal Election Commission, 558 U.S. 310. Citizens United was represented by Theodore B. Olson of Gibson, Dunn & Crutcher (if that name sounds familiar, he successfully former President George W. Bush in Bush v. Gore) and the government was represented by Malcolm L. Stewart, of the Department of Justice.
  • September 9, 2009. After more than forty briefs amicus curiae were filed in the matter, including those from Sen. John McCain (R-AZ), Sen. Mitch McConnell (R-KY), the Institute for Justice and the National Rifle Association, the case was re-argued. Olson again represented Citizens United. Solicitor General Elena Kagan argued for the government (yes, that Elena Kagan who now sits on the Supreme Court).
  • January 21, 2010. The Supreme Court issued an opinion reversing the original decision in part, affirming the matter in part and remanded it back to the lower court. (downloads as a pdf) The Court found that it was unconstitutional to ban all free speech by corporations, unions and other organizations – even as it applied to political campaigns. Specifically, the Court found that the “government may not suppress political speech on the basis of the speaker’s corporate identity. No sufficient governmental interest justifies limits on the political speech of nonprofit or for-profit corporations.” As a result of the ruling, the number of nonprofit organizations applying for tax exempt status under section 501(c)(4) of the Tax Code increased dramatically.
  • March 2010. Internal Revenue Service employees in the Cincinnati office were asked to further scrutinize tax exempt applications using politically charged key words.
  • August 2010. The IRS distributes its first formal BOLO (Be on the Lookout) listing to those examining applications. The criteria in the BOLO listing were Tea Party organizations applying for section 501(c)(3) or section 501(c)(4) tax exempt status status.
  • June 2011. Terminology on the BOLO listings increased to include additional names (Patriots and 9/12 Project) as well as specific policy positions such as government spending, taxes and government debt. Then acting Director of Exempt Organizations, Lois Lerner, is advised of the practice.
  • July 8, 2011. The IRS announced that it would no longer pursue an investigation into donors who made contributions to nonprofit groups for the purpose of political ads. Specifically, the IRS reversed its position – held for the last thirty years – that those transfers were subject to federal gift tax.
  • November 2011. The Technical Unit at IRS provides written guidance on the matter. Applications which had been held for further review were on hold until this time. As many as forty cases were involved.
  • January 2012. The IRS continues the practice of flagging applications which use politically charged language. Additional information request letters are sent to certain organizations.
  • February 2012. The issue hits the media for the first time but attracts fairly little notice.
  • March 22, 2012. Former IRS Commissioner Doug Shulman testifies (downloads as a pdf) in front of the House Ways and Means Subcommittee on Oversight that there was “absolutely no targeting” by the IRS of conservative and/or Tea Party organizations.
  • May 2012. Shulman is briefed by TIGTA about what was happening together with former Acting Commissioner Steven T. Miller.
  • June 2012. Following up on complaints, Rep. Darrell Issa (R-CA) formally requests a Treasury Inspector General for Tax Administration (TIGTA) inquiry.
  • July 2012. The TIGTA inquiry begins.
  • November 11, 2012. Shulman resigns and is replaced by Miller.
  • April 2013. The White House is advised that TIGTA will issue a report on its findings regarding what happened.
  • May 10, 2013. During an American Bar Association meeting, Lerner admits that organizations were targeted because of their titles or beliefs, calling it “absolutely incorrect, insensitive, and inappropriate.”
  • May 14, 2013. TIGTA issues its initial report on the matter as Attorney General Eric Holder announces an FBI investigation.
  • May 15, 2013. IRS issues a statement on the scandal. Acting IRS Commissioner Steven Miller resigns.
  • May 16, 2013. After Miller’s resignation, President Obama names 42 year old Daniel Werfel as Acting Commissioner of the IRS.
  • May 17, 2013. Miller and TIGTA Inspector General J. Russell George testified at a hearing in front of the House Ways and Means Committee.
  • May 22, 2013. Lerner refuses to testify in front of the House Committee on Oversight and Government Reform, pleading the Fifth Amendment.
  • May 23, 2013. Lerner is placed on administrative leave.
  • June 12, 2013. The use of BOLO lists is officially suspended.
  • June 20, 2013. News is made public that IRS is set to pay out $70 million in employee bonuses. At the same time, taxpayers learn that Lerner received $42,000 in bonus money while former Miller received $100,000.
  • June 24, 2013. The IRS issues its own report into the scandal together with an action plan. At the same time, the IRS admitted fault, saying that “inappropriate criteria” was used for review of organizations applying for tax-exempt status.
  • June 25, 2013. Democrats in the House claim that the IRS provided information which proves that progressive terms were also used as identifiers on the BOLO lists.
  • July 10, 2013. Congress threatens to slash the IRS budget as part of its punishment for the scandal.
  • September 24, 2013. The news is made public that Lerner will retire.
  • December 23, 2013. The IRS posts REG–134417–13, Notice of Proposed Rulemaking Guidance for Tax-Exempt Social Welfare Organizations on Candidate-Related Political Activities. It receives a record number of public comments.
  • January 9, 2014. Rep. Issa and Regulatory Affairs Subcommittee Chairman Jim Jordan (R-OH) send a letter to Attorney General Holder, expressing concern that Barbara Bosserman, a Department of Justice trial attorney tasked with leading the IRS tax exempt organization investigation, had been a donor to the Democrats.
  • January 14, 2014. Congressional leaders fume when sources indicate that no criminal charges will likely be considered by the Federal Bureau of Investigation following a lengthy investigation into tax exempt organization scandal.
  • March 11, 2014. The Committee on House Oversight and Reform issues a report on “Lois Lerner’s Involvement in the Targeting of Tax Exempt Organizations” (downloads as a pdf).
  • April 7, 2014. IRS Commissioner John Koskinen addresses the scandal at the National Press Club and confirms that there are six ongoing investigations: four conducted by Congressional committees, one by the Department of Justice and one by TIGTA. He says that more than 250 IRS employees have spent over 100,000 hours as part of these investigations and the cost to taxpayers has been at least $14 million.
  • April 8, 2014. The Committee on House Oversight and Government Reform announces that it would pursue contempt charges against Lerner.
  • April 10, 2014. The Committee votes along party lines to proceed with contempt charges against Lerner.
  • May 7, 2014. The House of Representatives passes H. Res. 574 by a vote of 231 to 187, holding Lois Lerner in contempt of Congress. The resolution read:

    Recommending that the House of Representatives find Lois G. Lerner, former Director, Exempt Organizations, Internal Revenue Service, in contempt of Congress for refusal to comply with a subpoena duly issued by the Committee on Oversight and Government Reform.

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And we’re not done yet. I’ll post as details are available. There’s more to come… (Trust me!)

Want more taxgirl goodness? Pick your poison: receive posts by email, follow me on twitter (@taxgirl), hang out with me on Facebook or check out my YouTube channel. If you want to keep an eye on documents I’ve posted, check out my profile on Scribd. And finally, you can subscribe to my podcast on the site or via iTunes (it’s free).

 
 

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