May 16,2013

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Hatch on IRS Scandal, Call for Investigation into Public Disclosure of Private Tax Information

Utah Senator Says, “The American people have a right to expect government agencies to perform their functions in a neutral, unbiased manner. When any agency breaks that trust, it undermines the credibility of our entire government.”

WASHINGTON – After every Republican member of the Senate Finance Committee sent a letter to the Treasury Inspector General for Tax Administration (TIGTA) earlier today requesting an investigation into the release of confidential taxpayer information to the news organization ProPublica, U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, delivered a speech on the Senate floor outlining the urgent need for this investigation and addressing the importance of the bipartisan Finance Committee investigation into the Internal Revenue Service (IRS) targeting conservative groups.  

Below are Hatch’s full remarks:

Mr. President, I rise today to speak on a matter that deserves the attention of everyone in this chamber.               

By now, we all know about what’s been going on at the Internal Revenue Service.  We’ve seen the report from the Treasury Inspector General for Tax Administration (TIGTA) indicating that, between 2010 and 2012, the IRS was targeting conservative groups applying for tax exempt status for increased levels of scrutiny.

We’ve read the accounts of conservative groups that were asked improper questions about their donors while some of their applications were delayed for more three years, even as applications for groups friendly to the President and liberal causes were promptly approved.  

And, we’ve heard the apologies from senior IRS officials and the condemnations from the White House.                 

While we know for a certainty that this unacceptable behavior was going on at the IRS, there is still much we don’t know.  

For example, we still don’t know why the targeting began or why only conservative groups were targeted by the IRS examiners.  

We don’t know the full extent to which senior officials at the IRS and Department of Treasury became aware of these practices, when they found out, and what they did or did not do to put a stop to it.
And, perhaps most importantly, we don’t know why, when Members of Congress asked questions about these issues last year, and after senior officials certainly knew of the problem, we were led to believe that no groups were being targeted.  

Indeed, neither Congress nor the American people learned anything about these activities from the responsible officials until they were trapped and their hands were forced.

Mr. President, there really aren’t words to describe what’s gone on here.  Some of us have tried – words like unconscionable, unbelievable, and Nixonian have been thrown around, rightfully in my opinion.
But, regardless of the words we use to describe it, this is easily the most shocking and outrageous turn of events we’ve seen in Washington in some time – and that’s saying something.  
One thing I’m glad to see is that these actions have, for the most part, been condemned by members of both parties.  In the end, I hope both Republicans and Democrats will work together to address these issues.  
I have said from the outset that it doesn’t matter if a tax-exempt group is liberal, conservative or moderate.  It is an outrage that the IRS would single out any group based on its political beliefs. On that point there is bipartisan agreement in Congress and throughout the country.

On the Senate Finance Committee, Chairman Baucus and I are undertaking a bipartisan investigation into this matter to find out exactly what happened and make sure this type of thing never happens again.  

I’m happy to be working with Chairman Baucus on this effort and I want to assure my colleagues that we’re going to get to the bottom of this.  We’re going to find out just how far down the rabbit hole the IRS went in singling out groups based on their political beliefs.  We’re going to find out why the IRS ignored a bedrock rule of tax administration: treat similarly situated taxpayers similarly.  Always. We’re going to find out exactly who was responsible. And, we’re going hold them accountable for their actions.

The IRS needs to come clean about what went on here.  Chairman Baucus and I intend to make sure that they do.  

Sadly, while the targeting of conservative groups in the review process has gotten most of the attention thus far, there are other issues involving the IRS that are every bit as disconcerting.

There are news reports indicating that, in 2012, the same IRS office improperly disclosed confidential information about certain conservative groups to media organizations.

Last November, the journalist group ProPublica requested 501(c)(4) applications for 67 different nonprofits.  

Less than two weeks later, the IRS produced application documents submitted by 31 of the organizations.  Included in this group of documents were the applications from nine conservative organizations that were still under consideration by the IRS.

ProPublica subsequently posted six of those applications in redacted form on the Internet and published articles analyzing the information they obtained.  This is disturbing for at least three reasons.  

First and foremost, under Section 6103 of the Internal Revenue Code, the IRS is prohibited from disclosing applications for tax-exempt status that are still under review.  While the IRS is authorized – under Section 6104 – to release application materials of groups that have already been granted tax-exempt status, pending applications are required by law to remain confidential.

This appears to be a pretty cut and dried violation of the Internal Revenue Code, meaning that civil and criminal penalties may apply.

Second, the IRS responded to ProPublica’s request in just 13 days.  That seems extraordinarily swift and it raises the question of how long the IRS normally takes to respond to such document requests.  I don’t want to pre-judge anything, but I suspect it usually takes longer than 13 days to hear back from the IRS.  It certainly takes longer than that for the IRS to respond to requests from Congress.  

Finally, this revelation comes not too long after other allegations that the IRS disclosed confidential information submitted by conservative nonprofits.

In the spring of 2012, activist groups and media outlets began posting confidential donor information regarding the National Organization for Marriage, a nonprofit 501(c)(4) organization, on the Internet.  Such information is also required by law to be kept confidential.  

Though the IRS is authorized to release yearly forms filed by tax-exempt organizations, the law prohibits donor information from being disclosed.

Yet, the National Organization for Marriage’s documents that found their way online in the middle of a presidential election appeared to have come from the IRS.  This was suspicious, to say the least.

That’s why, in May of 2012, I sent a letter to the IRS Commissioner requesting an investigation into whether the IRS publicly disclosed confidential donor information about the National Organization for Marriage.  To date, I have not received a substantive response.    

So, Mr. President, in addition to the revelations that the IRS was improperly targeting conservative groups for scrutiny of their 501(c)(4) applications, we have these unanswered questions about the possible illegal disclosure of confidential information to media outlets and other organizations.

This is another matter that needs to be resolved in order restore the credibility of the IRS as a government agency.  

That’s why I, along with all the Republican members of the Senate Finance Committee, have submitted a letter to the Treasury Inspector General asking that he look into these issues.

Among other things, our letter requests that TIGTA investigate to determine which employees at the IRS were responsible for improperly disclosing confidential documents to ProPublica and whether any actions have been taken against them.

In addition, it asks for an investigation into whether the IRS followed its usual Freedom of Information Act Procedures in its prompt response to ProPublica’s document request.

And, our letter asks TIGTA to determine whether the IRS ever undertook an investigation to determine if the agency was responsible for leaking the National Organization for Marriage’s donor information.  

Mr. President, the American people have a right to expect government agencies to perform their functions in a neutral, unbiased manner.  When any agency breaks that trust, it undermines the credibility of our entire government.

These aren’t matters that can simply be wished away by public apologies and condemnations. They can’t be covered up by a handful of resignations. I hope the administration knows this.

The only way to fully address these issues and to restore the credibility of the IRS is to have a full accounting of the facts.  And, one way or another, we’re going to learn the facts about what went on here.  

I hope that we can do so with the full and complete cooperation of the administration.