The IRS & Dirty Deeds: More Common Than You Might Think

President Kennedy IRS investigated right-wing groups

William Shughart Independent InstituteTexas Insider Report: WASHINGTON, D.C. – The recent IRS scandal — the agency’s stonewalling and harassment of Tea Party groups that sought tax-exempt status during the run-up to the 2012 elections — has evoked righteous indignation across the political spectrum. But one emotion it IRS in D.C.shouldn’t elicit is surprise. The Infernal Revenue Service, as many detractors call it, has long been used as a political weapon.  

President Nixon turned the IRS against those on his “enemies list,” and under President Kennedy the agency investigated right-wing groups via its Ideological Organizations Project.

Even select congressional staffers have benefited from the agency:

IRS Internal Revenue ServiceSuch incidents of political misbehavior are not outliers.

In 2001, Shughart and two colleagues, Michael Reksulak and Marilyn Young, revealed a disturbing pattern of political activism by the IRS in a peer-reviewed journal article based on data culled from tax returns from all 33 of the agency’s geographic districts from 1992 through 1997. Two patterns were particularly pervasive.

Finding #1:

The agency was less likely to audit a return, Shughart writes, “if the taxpayer lived in a district that was politically important to the sitting president or was represented by a member of Congress serving on a committee with IRS oversight responsibility.”

Finding #2:

“Audit rates were substantially lower in so-called battleground states with large numbers of electoral votes where presidential elections have historically been close,” Shughart continues, “such as Ohio, Pennsylvania, and Wisconsin.”

These patterns suggest that the IRS is happy to deploy the “carrot” of foregoing an audit when doing so serves its political bosses and friends, whether they work on Capitol Hill or at the White House.

“No one other than the most naïve observer of American politics should be shocked to find that the IRS, like all bureaucracies, is susceptible to political manipulation,” Shughart concludes.

Independent Institute logo“It’s happened before, and will probably happen again.”

IRS Scandal Is Nothing New—It’s Always Been a Political Weapon, by William F. Shughart II (Investor’s Business Daily, 5/23/13)

Taxing Choice: The Predatory Politics of Fiscal Discrimination, edited by William F. Shughart II

Taxation, Forced Labor, and Theft, by Edward Feser (The Independent Review, Fall 2000)

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