the audit

Peggy Noonan loses it on the IRS story

The Journal columnist draws an evidence-free connection to the White House
May 17, 2013

We are in the midst of the worst Washington scandal since Watergate.

That’s Peggy Noonan today in The Wall Street Journal, and no, she will not be laughed out of Washington. There are papers to sell and clicks to harvest. Forget about the fact that there’s zero evidence of any White House involvement in the IRS flagging Tea Party groups, and forget about past scandals like Iran-Contra, the Iraq War, the US Attorneys, and Bill Clinton lying under oath about hooking up with an intern.

As I wrote yesterday, it’s hard to get too worked up about Tea Party applicants getting flagged when journalism startups got the same treatment—and the nonprofit-news applicants had a much better case for approval than Tea Party groups.

But Noonan also alleges that the IRS, under the White House’s direction, targeted individual conservative activists with tax audits. That would be a serious crime, but here’s all her evidence for such a serious allegation:

The second part of the scandal is the auditing of political activists who have opposed the administration. The Journal’s Kim Strassel reported an Idaho businessman named Frank VanderSloot, who’d donated more than a million dollars to groups supporting Mitt Romney. He found himself last June, for the first time in 30 years, the target of IRS auditors. His wife and his business were also soon audited. Hal Scherz, a Georgia physician, also came to the government’s attention. He told ABC News: “It is odd that nothing changed on my tax return and I was never audited until I publicly criticized ObamaCare.” Franklin Graham, son of Billy, told Politico he believes his father was targeted. A conservative Catholic academic who has written for these pages faced questions about her meager freelance writing income. Many of these stories will come out, but not as many as there are. People are not only afraid of being audited, they’re afraid of saying they were audited.

All of these IRS actions took place in the years leading up to the 2012 election. They constitute the use of governmental power to intrude on the privacy and shackle the political freedom of American citizens. The purpose, obviously, was to overwhelm and intimidate–to kill the opposition, question by question and audit by audit.

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It is not even remotely possible that all this was an accident, a mistake.

Here’s the problem. The IRS audits about 1.5 million individual tax returns a year. Guess what? Some of those 1.5 million unlucky taxpayers will be conservative political activists. Some of those will be liberal political activists. What about all the big conservative donors who weren’t audited? There’s just no evidence that activists that individuals were targeted based on their political views or that conservatives got audited disproportionately.

You, average American, have a little better than 1 percent chance of getting audited in any given year, and your chance of getting audited is much higher if you make lots of money, like VanderSloot and Scherz, and if you take lots of write-offs. Betcha George Soros has been audited a time or two, and not necessarily during Republican administrations.

In other words, it’s not smart to pick up a handful of anecdotes from across the country and turn them into evidence of a Nixonian conspiracy that threatens the republic. (Another outlet doing this is ABC, which ratcheted up the Benghazi story last week with a false report by Jonathan Karl based on misrepresented documents that apparently came from Republicans in Congress, according to CBS).

Remember, the 501(c)(4) hubbub, which Noonan conflates here with the supposed persecution of individuals, did not involve audits. It involved flagging groups applying for tax-exempt status and checking whether they were really political organizations, which are supposed to be ineligible for tax exemption. All the flagged groups were eventually given tax-exempt status after a long delay. The same thing has happened with the nonprofit-news sector (though the investigative journalist Roddy Boyd, for one, says that his Southern Investigative Reporting Foundation is still awaiting approval). The Inspector General report found that the Tea Party targeting was “not politically biased” and that “officials stated that the criteria were not influenced by any individual or organization outside the IRS.” Two-thirds of the flagged applicants were not conservative groups.

Noonan mentions none of this.

And, yet again, it’s worth noting the head of the IRS during all this was a political appointee put in charge of the IRS by… George W. Bush. Noonan forgets that too.

I’ll go out on a limb here and predict that Obama’s Watergate this is not. It’s flat irresponsible to suggest otherwise in the pages of the country’s most important business outlet—at least from everything we know thus far.

(h/t Andrew Sullivan)

Read the IG’s report here:

Inspector General's Report on IRS Reviews of Tax-exempt Applications by mmemmott

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.