What Right-Wing Media Won't Tell You: Cincinnati IRS Initially Flagged Tea Party Group

Right-wing media are cherry-picking newly released emails from Judicial Watch to allege that the Washington D.C. office of the IRS initiated the flagging of Tea Party groups, omitting the full email chain that reveals the Cincinnati IRS office first flagged Tea Party applicants for tax-exempt status for further review.

Judicial Watch Releases IRS Emails Under FOIA Request

Judicial Watch Released Batch Of Email Correspondence Between IRS Officials Pursuant To FOIA Request. On May 14, conservative group Judicial Watch released a batch of documents dating back to February 2010 that included a chain of email correspondence between the Cincinnati, Ohio Internal Revenue Service (IRS) office and the Washington D.C., based IRS office. Judicial Watch reported that “The documents came in response to an October 2013 Judicial Watch Freedom of Information Act (FOIA) lawsuit filed after the agency refused to respond to four FOIA requests dating back to May 2013.” [Judicial Watch Press Room, 5/14/15]

Released Emails Reveal Cincinnati Originally Flagged Tea Party Group As “High Profile”

February 25, 2010: Cincinnati IRS Employee First Flagged Tea Party Group As “High Profile” Case. Judicial Watch's emails show that the first person to flag a Tea Party group as a “high profile” case was a Cincinnati IRS employee, who notified his superior, Screen Group Manager John Shafer, in Cincinnati, of his decision to flag the group citing indications of “possible future political candidate support,” which would disqualify the group from 501(c)(3) status. The email reads:

Judicial Watch email

[Judicial Watch, accessed 5/15/14]

Email Chain Details Flagging Beginning In Cincinnati, Follow-Up Emails From DC Concerning Initial Inquiry

Feb. 25: Shafer Forwarded Email Highlighting Concern For “High Profile” Cases To Los Angeles Office. After receiving notification that his subordinate in Cincinnati had flagged some applications as “high profile,” John Shafer forwarded the email to Sharon Camarillo in the Los Angeles IRS office, stating that the “case will be sent to inventory for further development. Political campaigns on behalf or [sic] in opposition to any political candidate do not promise social welfare.” He wrote that he would “hold this case for a decision concerning this type of organization may be considered a 'High Profile Case'.” [Judicial Watch, accessed 5/15/14]

Feb. 25: Following Standard Protocol, Washington Was Notified Of The “High Profile” Case. Later on February 25, Sharon Camarillo in Los Angeles forwarded the message to Cindy Thomas, back in Cincinnati, instructing her to notify Washington that the Tea Party application “indicates possible future political candidate support.” Camarillo noted that she would hold the application pending EO Technical's (EOT) response. [Judicial Watch, Accessed 5/15/14]

Under IRS Rules, EOT Office In Washington, DC Processes Cases That “Require Interpretation Of The Tax Law.” IRS Rules and Agreements On the Determination of Exempt Organizations instruct the EOT office in Washington to handle cases “where issues cannot be resolved by established precedent and thus require interpretation of the tax law”:

Identification of EO Technical Cases

1.     EO Technical in Washington, D.C., is responsible for processing:

A.     Cases where issues cannot be resolved by established precedent and thus require interpretation of the tax law. See IRM 7.20.1.4.1 for a list of cases reserved for EO Technical.

B.     Cases where issues are subject to a study or not covered by clearly established precedent because they may have significant regional or national impact.

C.    Technical advice cases. Procedures for requesting technical advice are set forth in Rev. Proc. 2012-5 (updated annually).

D.    Technical assistance requests (Guidance from EO Technical on procedural or technical matters that do not relate to a specific case). See Rev. Proc. 2012-5 (updated annually). 

2.     Determination staff should expeditiously handle any case identified for EO Technical to avoid delay in processing the case. If possible, screeners and group managers should attempt to identify cases that meet criteria for referral to EO Technical before they are assigned to a determination specialist.

3.     Determination specialists may encounter certain issues which require analysis, development, and/or guidance from EO Technical before a case can be conclusively identified as an appropriate EO Technical referral.

A.     The specialist, with the approval of his or her group manager, may contact an EO Technical subject matter expert to determine whether clearly established precedent covers the issue before transferring the case.

B.     Under no circumstances should screeners, specialists, or managers cite a telephone conversation with a person in EO Technical as the reason for transferring a case.

C.    A determination specialist, who decides an assigned case should be referred to EO Technical after checking with EO Technical staff, should forward the case to his or her group manager for transfer.

D.    Under no circumstances should a determination specialist issue a determination letter in a case that should be handled by EO Technical. [IRS.gov, accessed 5/15/14]

Feb. 25: Cincinnati IRS Office Asked Washington Office If They Were Interested In Reviewing “High Profile” Case. From Cincinnati, Thomas forwarded the chain of emails to Holly Paz, a senior IRS official in Washington, D.C., asking if “EO Technical wants this case because of recent media attention.” [Judicial Watch, accessed 5/15/14]

Feb. 26: Washington Informed Cincinnati That They Would Review The Case. On February 26, Holly Paz in Washington responded to Cindy Thomas stating, “I think sending it up here is a good idea given the potential for media interest. Thanks.” [Judicial Watch, accessed 5/15/14]

March 16-17: In The Meantime, Cincinnati Identified 10 Additional Tea Party “High Profile” Cases, Washington Agreed To Review Two. Between March 16-17 of 2010, Cincinnati's John Shafer identified ten additional Tea Party cases - three of which had already been approved, and his colleague Thomas in Cincinnati emailed the Washington IRS EOT office to ask, “Do you want all of them or do you only want a few and then give us advice as to what to do with the remaining?” Paz responded that EOT would only take two and asked that the rest of the cases be held “until we get a sense of what the issues may be.” [Judicial Watch, accessed 5/15/14]

April 23-April 26: Emails Show D.C., Cincinnati Coordinating On Cases, Requesting Additional Information From Tea Party Groups. Emails from April 23-26 show that Steven Grodnitzky, a tax attorney from the Washington D.C., office, followed up with the Cincinnati office on the status of the cases being reviewed, pointing out that one “development letter,” - a request for additional information or clarification from the applicant in order to further the process - had been sent to one Tea Party group, and another was being prepared. On April 25, Thomas in Cincinnati informed both offices that the cases were assigned for review. [Judicial Watch, accessed 5/15/14, Internal Revenue Service, accessed 5/15/14]

July 3: Cincinnati Office Confirmed That They Were Reviewing Cases. On July 3, Cindy Thomas in Cincinnati confirmed that her office was reviewing the Tea Party cases “in coordination with EOT.” [Judicial Watch, accessed 5/15/14]

July 6: Washington Office Confirmed They Were Coordinating On Review Process With Cincinnati. On July 6, 2010 Washington D.C.'s Grodnitzsky emailed to confirm that the EOT was reviewing the applications as they had originally agreed upon for the Cincinnati office. Grodnitzky wrote “EOT is working the Tea party applications in coordination with Cincy. We are developing a few  applications here in DC and providing copies of our development letters with the agent to use as examples in the development of their cases.” [Judicial Watch, accessed 5/15/14]

Right-Wing Media Cherry-Pick July 2010 Email, Ignore Feb. 2010 Email, To Claim IRS Targeting Originated In D.C.

Fox: “Bombshell” New Emails Reveal IRS Targeting Of Conservative Groups “Originated” In DC. The May 15 edition of Fox News' Fox & Friends cited the July 6 email as “proof” that administrators in Washington D.C. played a role in the IRS targeting of political groups: 

ELISABETH HASSELBECK: These emails, Judicial Watch is revealing, actually reveal that this whole scandal wasn't just this small group in Ohio, in Cincinnati, that was dealing with this little scandal here. No, it actually links directly the White House, D.C., to the IRS pressuring these groups, putting them in the back room, and really not dealing with them. Really not allowing them to communicate with you, the American people, when it comes to elections.

STEVE DOOCY: This is a bombshell, because Congress has gotten a number of these emails, but they've been all blacked out. They've been excised the important part.

BRIAN KILMEADE: Redacted.

DOOCY: Now Judicial Watch has wound up with clean copies of it. It's very clear that while the White House, while democrats have been saying, you know what, 'this is just a few rogue agents out there in Cincinnati', it originated in Washington, D.C. And you've got a very powerful Democratic senator, Carl Levin from Michigan, who constantly was calling the IRS telling them to crack down on his political opponents. This is a bombshell.

KILMEADE: So we've got the proof.

Doocy read the July 6 email from Grodnitzsky, and claimed:

DOOCY: So in other words, if they're coordinating with Cincinnati, this is coming from Washington. [Fox News, Fox & Friends, 5/15/14]

Fox's Outnumbered: Emails “Link The IRS Tea Party Targeting Scandal Straight To The Agency's Washington Headquarters.” On the May 15 edition of Fox News' Outnumbered, co-host Sandra Smith introduced a segment on the emails by claiming they linked the targeting “straight to the agency's Washington headquarters.” Later in the segment, Smith said “these weren't rogue employees in Ohio. These were in Washington, DC.” [Fox News, Outnumbered, 5/15/14]

TownHall: “Targeting Of Tea Party Groups Came Directly Out Of Washington D.C., Not Rogue IRS Office.” On May 14, TownHall's Katie Pavlich, also a Fox News contributor, cited the July 6 emails to claim that “the IRS' targeting came directly from Washington, D.C.” and that D.C. “instructed Cincinnati about how to handle tea party applications”:

New documents obtained and released through a Judicial Watch lawsuit show the targeting of tea party and conservative groups came directly out of Washington D.C., not a rogue IRS office in Cincinnati.

On July 6, 2012, former Director of the IRS Rulings and Agreements Division and current Manager of Exempt Organizations Guidance Holly Paz sent an email to IRS Attorney Steven Grodnitzky asking for an explanation of how tea party group applications were being handled. Grodnitzky responded by confirming the cases were being handled in Washington.

[...]

When the IRS targeting scandal broke last year, officials in Washington immediately pinned the blame on the Cincinnati office. This documentation proves not only that direction was coming out of Washington, but that Washington instructed Cincinnati about how to handle tea party applications. [TownHall, 5/14/14

Testimony Made Publicly Available In 2013 Identified February 2010 Tea Party Case As “Where This Started”

Testimony Made Publicly Available In 2013 Identified February 2010 Tea Party Case As “Where This Started.” On June 18, 2013, Democratic Ranking Member of the House Committee on Oversight and Government Reform Rep. Elijah E. Cummings released “full transcript on an interview with an IRS Screen Group Manager in Cincinnati.” The transcript showed that the Screen Group Manager, presumably John Shafer, testified that in late February 2010, an “agent who worked for” him asked for “guidance concerning a case that had been assigned to him” because he “had concerns about this being a high-profile case” due to “media attention that he had seen” as well as the application's “mention[] of potential political activity.” The manager identified the case as a “Tea Party application” and noted that he “reviewed” the concern and “elevated” the concern about this application up the IRS chain of command, ultimately to “EO Technical” in Washington, DC. He stated that this February 2010 case was “where this started.” [Rep. Cummings press release, 6/18/13; Committee on Oversight and Government Reform, Interview transcript, 6/6/13]