Obama administration’s ‘continuous resistance’ in IRS targeting case slammed by federal appeals court

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A federal appeals court Tuesday slammed the IRS for what it called three years of “continuous resistance” to turning over documents in connection with a class action suit brought by tea party groups singled out for months of delays, excessive paperwork and scrutiny as they sought tax-exempt status in 2010.

A unanimous ruling by a three judge panel of the Cincinnati-based U.S. Court of Appeals for the 6th Circuit found that the IRS, in its unresponsiveness to the targeting charges, “has only compounded the conduct that gave rise” to them.

The case was brought by NorCal Tea Party Patriots, and other groups, in 2013, just after a Treasury inspector general that May found that the IRS had singled out tea party groups for months-long delays in considering their requests for tax-exempt status, a practice President Obama called “intolerable and inexcusable.”

The allegations against the IRS produced a series of high-level resignations at the agency, and have been the subject of Republican hearings on Capitol Hill and an FBI investigation, which found no criminal wrongdoing.

But the suit by the organizations is separate from all that. They seek damages for what they allege are violations of the law by the IRS. But the case has never gotten down to the merits because, the appeals court panel said, “at every turn the IRS has resisted the plantiff’s requests for information” on the targeting practices, with the IRS contending both at the district court level and in the appeals court that the records sought, specifically the “names and other identifying information” of organizations that applied for tax-exempt status, are protected by privacy laws.

That argument was flatly rejected by U.S. District Judge Susan J. Dlott, who is in charge of the case in the trial court. She accused the government of “just running around in circles and not answering the questions…..My impression,” she said during a hearing in the case, “is the government probably did something wrong in this case …. I question whether or not the Department of Justice is doing justice.”

The Justice Department lawyers representing the IRS then took the unusual step of seeking an order against Dlott — called a “writ of mandamus” — generally reserved for a “judicial usurpation of power or a clear abuse of discretion.”

It was that order that the appeals court denied Tuesday — angrily.

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The opinion, written by Judge Raymond M. Kethledge, a George W. Bush appointee, and joined by Bush appointee Judge David W. McKeague and Jimmy Carter appointee Judge Damon J. Keith, ran through the whole history of NorCal’s struggle with the government which began in April 2010, when the group applied for tax-exempt status routinely granted to such organizations.

In July 2010, according to the opinion, the IRS sent NorCal a letter requesting additional information to process its application, to which NorCal “promptly replied with 120 pages of responsive material.

“Eighteen months passed without further word from the IRS,” said the court, “Then, in a letter dated January 27, 2012, the IRS demanded more information from NorCal,” in the form of five single-spaced pages bearing 19 separate requests, many of which had six or more sub-requests. Said the court:

Among other things, the IRS requested a list of all NorCal events and activities since July 2010, with detailed information concerning the circumstances of each event and the content of any speeches or presentations made at those events; the names of NorCal’s donors and whether those donors had run for elected office in the past or intended to run for elected office in the future, along with the amounts and dates of every donation; and copies of all newsletters, emails, or advertising materials that the group had sent to its members or to the general public. The IRS’s letter also reminded NorCal that, “[i]f we approve your application for exemption, we will be required by law to make the . . . information you submit in response to this letter available for public inspection.” The IRS directed NorCal to respond by February 17, 2012—three weeks after the date of the letter—and told NorCal that, “[i]f we don’t hear from you by the response due date . . . we will assume you no longer want us to consider your application for exemption and will close your case. As a result, the Internal Revenue Service will treat you as a taxable entity.” NorCal eventually provided approximately 3,000 pages of responsive material.

The panel noted that while the IRS forced NorCal “to produce 3,000 pages of what the Inspector General called ‘unnecessary information'” the agency then claimed it would be “unduly burdensome” for it to provide such information as the names of IRS employees who worked on the tea party groups’ applications.

“Among the most serious allegations a federal court can address,” the panel said, “are that an Executive agency has targeted citizens for mistreatment based on their political views. No citizen—Republican or Democrat, socialist or libertarian—should be targeted or even have to fear being targeted on those grounds. Yet those are the grounds on which the plaintiffs allege they were mistreated by the IRS here. The allegations are substantial: most are drawn from findings made by the Treasury Department’s own Inspector General for Tax Administration.

“Those findings,” said the court, “include that the IRS used political criteria to round up applications for tax-exempt status filed by so-called tea-party groups; that the IRS often took four times as long to process tea-party applications as other applications; and that the IRS served tea-party applicants with crushing demands for what the Inspector General called ‘unnecessary information.’ Yet in this lawsuit the IRS has only compounded the conduct that gave rise to it.

“…. The lawyers in the Department of Justice have a long and storied tradition of defending the nation’s interests and enforcing its laws—all of them, not just selective ones—in a manner worthy of the Department’s name. The conduct of the IRS’s attorneys in the district court falls outside that tradition.”

As of late Tuesday night, the Justice Department had not commented on the appeals court decision.

The unusually severe tongue lashing by the appellate judges followed a similar rebuke of the government in the unrelated but even more sensitive case involving a Freedom of Information Act request by Judicial Watch, a conservative group, involving former secretary of state Hillary Clinton’s personal email system.

Fed up with what he considered a long drawn out runaround by the State Department in the case, U.S. District Judge Emmet G. Sullivan of Washington accused the government of engaging in “a constant drip” in complying with the FOIA request. “That’s what we’re having here,” he said “….and it needs to stop…. How on earth can the Court conclude that there’s not, at a minimum, a reasonable suspicion of bad faith regarding the State Department’s response to this FOIA request?”

In response, Sullivan took the unusual step of allowing the questioning under oath of  seven current and former top State Department officials and aides to Clinton about her use of a private email server when she was secretary of state.

No date has been set for that questioning.