[Congressional Record Volume 159, Number 68 (Wednesday, May 15, 2013)]
[Senate]
[Pages S3517-S3518]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                      The Internal Revenue Service

  Mr. President, over the last 5 days, information that I can describe 
only as very troubling has emerged about a systematic practice by the 
IRS to target conservative groups seeking tax-exempt status.
  According to a report released last night by the Inspector General 
for Tax Administration, the IRS developed and used inappropriate 
criteria to identify applications from organizations applying for tax-
exempt status based ``upon their names or policy positions instead of 
indications of potential political campaign intervention.''
  In addition, the 48-page report finds that ineffective management of 
the IRS allowed for this inappropriate practice to stay in place for 
more than 18 months, resulted in substantial delays in processing 
certain applications, and allowed unnecessary information requests to 
be issued.
  While the inspector general report does not say the IRS was 
intentionally partisan, it did find that the agency's narrow focus of 
the criteria gives the appearance that the IRS was not impartial in 
conducting its mission.
  These actions by the IRS, if true, are a clear breach of the public's 
trust. Targeting groups based on their political views is not only 
inappropriate, but it is intolerable, unacceptable, and cannot be 
allowed.
  I intend to get to the bottom of what happened. The inspector 
general's report is just the beginning. There are still many unanswered 
questions. The Senate Finance Committee, which has congressional 
oversight over the IRS, has just begun what will be a thorough 
investigation.
  Some are now using this issue to try to score political points. Some 
of my friends across the aisle are claiming the IRS was just doing what 
Democrats wanted in examining these conservative groups.
  Let me clear up this misperception. I, for one, have never advocated 
targeting conservative groups. This is important, let me be clear. What 
I have called for in the past, especially in 2010, and continue to call 
for today is closer examination of any and all groups already granted 
or applying for tax-exempt status--let me say that again, any and all 
groups.
  Since the Citizens United case decided by the Supreme Court, there 
has been a dramatic increase in political

[[Page S3518]]

organizations masquerading as social welfare groups. We need to make 
sure these groups are complying with IRS political activity rules.
  Any group claiming tax-exempt status under section 501(c)(4) of the 
Internal Revenue Code needs to prove it is following the letter of the 
law.
  As the New York Times noted yesterday, ``No one has an automatic 
right to this tax exemption. Those seeking one should expect close 
scrutiny from the government to ensure it is not evading taxes.''
  While I expect the scrutiny of the IRS to be thorough, I also expect 
it to be administered equally across the board, on conservative or 
liberal organizations and any in between.
  Americans expect the IRS to do its job without passion or prejudice. 
The IRS can't pick one group for closer examination and give the other 
a free pass. But that is apparently what they did here. That was the 
agency's big mistake, and now they have to answer for it.
  The Senate Finance Committee has launched a formal bipartisan 
investigation. A team of investigators from my staff and the staff of 
Senator Hatch has begun compiling questions and seeking additional 
documents from the IRS. There seems to be some inconsistencies in the 
timeline regarding who knew what and when, and we will get to the 
bottom of it.
  As part of the investigation, I went straight to the top and met with 
Acting Commissioner Steve Miller yesterday. It was a tough talk. I told 
Mr. Miller the actions of the IRS were inexcusable and warned he is in 
for serious questioning from this committee and from others. I told Mr. 
Miller the committee demanded nothing less than his complete 
cooperation and total transparency.
  The Finance Committee will hold a hearing on Tuesday to examine this 
issue. There needs to be a full accounting of what happened at the IRS 
and who knew what, when, how long did this practice go on, and what 
other groups were flagged for additional scrutiny.
  There is another important question that needs to be asked: Is there 
a fault in the Tax Code that may have contributed to the IRS taking 
such unacceptable steps? Do we need a better definition of what 
organizations qualify for tax exemption? Do we need to revisit the role 
tax-exempt organizations play in our political system? What part of the 
Tax Code has to be changed for us to guarantee this overreach never 
happens again? And there are many more questions.
  This will be an issue we delve into in tax reform as well. Clearly, 
something is amiss for the IRS to behave the way it did. The actions of 
the IRS are unacceptable and people will be held accountable.