The House Oversight and Government Reform Committee will release a report Tuesday that finds the Obama White House has turned the IRS into a political organization that has spent years attacking conservative groups.
"The Internal Revenue Service has compromised its traditional position as an independent tax administrator," the report found. "The IRS's inability to keep politics out of objective decisions about interpretation of the tax code damaged its primary function: an apolitical tax collector that Americans can trust to treat them fairly."
The document is its final staff report under Chairman Darrell Issa (R-Calif.) about the IRS targeting scandal, which ultimately led to the dismissal of the IRS commissioner and former IRS employee Lois Lerner. But the report said the fact-finding mission of Congress is not yet complete, and said the next Congress will have to continue this work.
It made several suggestions for fixing the IRS and allowing it to act in a bipartisan fashion again. Among other things, it suggested replacing the IRS commissioner with a bipartisan commission, removing the IRS as a regulator for political speech, and creating a private right of action for victims of information leaks by the IRS.
The report indicated that improper IRS activities began with a 2010 comment from President Barack Obama, who said some of the Tea Party groups were being funded with corporate money, and "we don't know where this money is coming from." That criticism was prompted by Democratic reactions to the Citizens United case in the Supreme Court, which many Democrats blamed for allowing the wealthy to pour more money into campaigns.
Five days after Obama spoke in 2010, former IRS official Lois Lerner spoke at Duke University and said many wanted the IRS to "fix the problem."
"The pressure to 'fix the problem,' as articulated by Lois Lerner, originated with President Obama and senior party leadership," the report found. "For twenty-several months, from February 2010 until May 2012, the Internal Revenue Service systematically targeted conservative tax-exempt applicants for additional scrutiny and delay."
"As prominent Democratic politicians and the media condemned conservative non-profit groups, the IRS sought ways to rein in the groups' political speech," the report found. "Lois Lerner initiated a 'c4 project' — careful to ensure that it was not 'per se political' — and called applications filed by Tea Party groups "very dangerous" because she believed that they could undo existing IRS limits on non-profit political speech."
That led to additional scrutiny of conservative groups seeking tax-exempt status. The report said that while a few groups were targeted with the words "progress" or "progressive" in their title, almost all were conservative-leaning organizations.
The decision to target conservative groups was followed by later decisions to cover it up, and blame lower level workers for the initiative.
The report also blamed Obamacare, which gave the IRS a key role in implementing Obama's health program, for turning the IRS into an arm of the White House, when it should have remained independent.
"Evidence shows an IRS responsive to the partisan policy objectives of the White House and an IRS leadership that coordinates with political appointees of the Obama administration," it found.
It said efforts to cover up the scandal were ultimately led by Obama himself. Obama initially said the IRS's actions were inexcusable, but later said there was not a "smidgen of corruption" at the IRS.