Cincinnati IRS office has a history of aggressive scrutiny

From reading this Wall Street Journal article, one gets the impression that what went on at the Cincinnati office of the IRS that was responsible for approving tax exempt status of non-profits that there was inadequate, or incompetent management of employees who were allowed to be as aggressive as they wished in targeting groups for extra scrutiny.

The Internal Revenue Service unit under fire for its reviews of conservative organizations has a long history of targeting groups with extra scrutiny, including foreclosure-assistance charities, credit-counseling services and New York Jewish charities, interviews with current and former employees show.

The scrutiny has included such tactics as listening to telephone calls between groups and their clients, according to one group's lawyer. In the case of tea-party organizations, IRS officials studied social-media postings to gauge political activity.

Sometimes the tactic of extra scrutiny for particular kinds of groups seeking tax exemptions helped manage a flood of entities in areas where abuse was common; other times it snagged innocent parties, subjected applicants to long delays and even made IRS employees feel uncomfortable.

The IRS's recent move to delay and second-guess hundreds of tax-exempt applications from conservative and other nonprofit groups appears to be the most politically tinged use of this model. Who came up with the plan to screen tea-party groups, and why they did so, isn't yet known.

This picture of how the unit operates offers fodder for both sides in the current debate. IRS defenders say the agency has long resorted to clustering similar entities to make its scrutiny more efficient, and didn't do so just in the case of conservative groups. "It makes sense to put cases together so you can see trends," said Bonnie Esrig, a former longtime IRS manager who, before her January retirement, was assigned for 18 months to a Cincinnati unit that reviewed tax-exempt applications.

Critics say the IRS operates with too few controls, making inappropriate behavior all too common and sweeping up a range of firms and nonprofit groups because of a few bad actors.

This also helps explain the total cluelessness of both managers and employees about the political nature of their scrutiny. They swallowed the narrative being promoted by Democrats that tea parties were trying to get away with banned political activity and saw nothing wrong with targeting them even though the groups were largely part of an opposition movement to the party in power.

It may turn out that this entire program was planned and ordered from on high. But I think it more likely that the arrogance of managers and IRS employees in this office - along with an unhealthy bias against the right - led to unfair and possibly illegal targeting of conservative groups.