Audits, Rectal Exams, and Political Payback
by Neil H. Buchanan
I begin today's column by noting that I have a bad track record when it comes to predicting that certain political developments will not have staying power. Not just a bad track record, but a laughably terrible one.
Two of the most painfully obvious examples of my anti-predictive powers have, in fact, in the end helped my academic career. When I first wrote about what I soon dubbed "the IRS non-scandal" in 2013, I imagined that that complete nothingburger would at most add up to a one-week brouhaha. I will return to that story below, because it is suddenly relevant again in an even weirder way. But as an initial matter, I readily concede that the Republicans' insistence on running with that utterly contrived grievance spawned many a column in my formative years writing on Dorf on Law and Verdict.
Even more egregiously, we need only look at my initial reaction to news that Republicans in late 2010 (after retaking the House of Representatives in President Obama's first midterm election) were planning to use the debt ceiling statute to hold the economy hostage, forcing Obama to accede to their increasingly unhinged demands.
I have recounted several times over the years that a reader contacted me just as that idea began to make the rounds among his conservative friends (and thus before I had heard about it). When he suggested that I might want to have a go at writing a column about it, my response was, almost verbatim: "I can't imagine being able to fill an entire column discussing something so silly, but sure, I'll try."
Literally hundreds of columns -- plus five law review articles (co-authored with Professor Dorf) and a book compilation of my first two years of columns about the insanity -- later, there is still more to be written. (Yes, there is another Buchanan/Dorf law review article in the works that extends our analysis in yet another direction.) Once again, my bad prediction ended up being good for my academic career, as I added many lines to my curriculum vitae. And that is what truly matters, right?
This time, I wonder if I will be wrong again. About what? It turns out that the IRS under Donald Trump audited both James Comey and Andrew McCabe -- the former Director and Deputy Director of the FBI, respectively -- after each of them was fired by Trump for failing to toe the Trumpian line. That sounds bad, and it is. Why do I nonetheless imagine that this is destined to die a quiet death? And might I be wrong?
My reasons for suspecting that this story -- which, as I will explain, could end up being truly explosive -- will add up to nothing are alternatively naive and cynical. The naive explanation is that, as a columnist for The New Republic suggests, it is -- even under Trump -- rather difficult to imagine the IRS being this clumsily political.
Naked political payback via the IRS was a Nixonian move (Nixon himself having launched a gauntlet of political attacks on the IRS that continues to this day, motivated by Nixon's anger at having been caught cheating on his own taxes), and we have come to believe that the post-Nixon safeguards put in place at the IRS were enough to prevent the Service from ever again being used for political hatchet jobs. Even though the odds of a person being randomly selected for such an audit is 1 in 30,600, meaning that two of Trump's hated enemies being subject to such treatment is suspicious in the extreme, who knows? Maybe this is truly a coincidence.
The cynical reason for being somewhat confident that this story will not have legs is that there is so much else to pursue in the post-Trump world that an IRS-related scandal will not receive enough oxygen to survive, much less thrive.
The work of the House Select Committee examining the January 6th insurrection has been nothing short of astonishing in both its analytical and political power, and if Attorney General Merrick Garland ever decides to bring criminal charges against Donald Trump and his unfunny gaggle of Keystone Kops, there is more than enough material to work with before getting to political abuse of the tax enforcement system.
In addition, no matter how blatant Trump's use of the IRS to punish his enemies might turn out to be, there is the nasty problem of the public's deep cynicism about their country's tax collection agency. I suspect that the general reaction will be: "Well, hey, I'm worried about going to prison for making a tiny mistake on my taxes, so if the IRS ended up giving some political appointees a hard time, I have no sympathy." The premise of that idea is wrong -- the IRS, in fact, gives people multiple opportunities to correct any errors and only pursues criminal cases against people who repeatedly insist upon breaking the law -- but that is unlikely to change the public's cynicism about anything tax-related. Why would even an apolitical Attorney General spend political capital pursuing a former President for anything along these lines?
I do, however, want to say something very clearly. In this case, I will be very, very happy to be wrong, because this is a very, very big deal. It should worry (if not horrify) us that Trump might well have used the IRS to punish his enemies. We knew that he was corrupt to his core, and his lapdog William Barr (prior to a last-minute "this is a step too far" moment as Trump plotted to overthrow the Constitution in order to stay in power) was more than willing to help Trump use the powers of the federal government for sleazy ends. Using the IRS to do his dirty work would have made it all even worse.
But living as we do in a world of whataboutism, we have already seen people say that, well, there was an IRS scandal in which Obama "targeted" his political opponents, too. What is the big deal? Glad you asked.
When the IRS non-scandal began in 2013, I earned a two-for-one for wrongness award not only by predicting that it would go nowhere fast but by giving the benefit of the doubt to the TaxProf blog, which was breathlessly hyping the story from the very beginning. In one of my first columns, I insisted that I was writing "not to criticize TaxProf," thinking that there was at least some reason to think that a down-the-middle non-commentary site ought to cover all sides of a potentially important story.
That blog soon proved my baseline belief in its good faith to be quite naive, as it click-baited the non-scandal (even numbering its days, echoing the "Iran Hostage Crisis Day 238" framing of Ted Koppel fame) literally for years, until Donald Trump took office in 2017 and the blog suddenly declared the "scandal" to be over. I am honestly not sure (and do not care to check) whether that publication is still in business, because it so completely destroyed its credibility throughout that time. Perversely, the proprietor of the blog insisted that it would have been "political" to admit that there was no scandal, even though pretending that there was a scandal was itself one hundred percent political.
Most readers, however, are probably thinking at this point: "But wait, what was that story all about? And why is Buchanan so certain that it came to nothing?" Again, I am glad that you asked. The story began when the Treasury Inspector General for Tax Administration released a report finding that some low-level IRS employees (not tax lawyers) had screened applications for a category of tax-exempt organizations (so-called 501(c)(4)'s) by using terms with political valence like "tea party patriots" to flag certain groups for more exacting scrutiny.
This was in fact a completely sensible thing to do, because Internal Revenue Code section 501(c)(4) stipulates that an organization qualifies for that category of tax-exempt status only if it is "operated exclusively for the promotion of social welfare ..., and the net earnings of which are devoted exclusively to charitable, educational, or recreational purposes" (both emphases added). Political activity disqualifies an organization, because that is not "social "welfare" or "charitable, educational, or recreational purposes." Even so, the IRS had previously allowed up to 49.99999 percent of a 501(c)(4)'s activities to be political before denying tax exempt status (proving again that the infamously tough agency is in fact quite accommodating).
So if a tax enforcement agency with chronic budget shortages (thanks to congressional anti-tax grandstanding) were trying to quickly find applicants that were too political to be tax-exempt, screening for obvious political buzzwords in their names is not a bad way to start. Except that the lawyers at the IRS knew immediately that using any screening mechanism that relied on partisan search terms would be terrible. As the Inspector General's initial report acknowledged, the IRS's higher-ups had long since corrected the problem, and there was nothing more to be done.
Who am I kidding? Of course there was more to be done. Republicans screamed to high heaven, certain that Obama had "done a hit job on conservative groups." After several years and millions upon millions of dollars of congressional resources (expended by multiple Republican-led committees), they found that the story was exactly as the Inspector General had described it from the start. Actually, it turned out that those IRS employees had also used left-valent terms like "occupy" to screen 501(c)(4) applications, so it was even more obviously not a matter of the Service having been turned into a political mafia.
Again, this non-scandal was repeatedly and thoroughly investigated by the most motivated political actors, and they found nothing. Their big "victory" came when the IRS agreed to settle some lawsuits by admitting what it had already admitted and corrected years before. So the IRS admitted it was wrong! Yes, it never claimed otherwise. It discovered an error and corrected it. There was never even the hint of political abuse.
So as a matter of saying "well, the Democrats did it, too," this is pathetic -- which is not to say that Republicans will not go there if the Trump story begins to grow. I do, however, want to take a moment to compare the two situations, even if their worst versions were/are true. That is, we have two allegations that would be truly bad, if true; but one of them is plainly worse. In the light most favorable to the plaintiffs, here are the two supposed scandals:
(A) Donald Trump used the powers of the presidency to order the IRS to audit two high-level FBI civil servants in the most invasive way possible. Last week's article reporting the story in The New York Times referred to an in-joke describing the type of audit that Comey and McCade endured as "an autopsy without the benefit of death." Or, as I refer to it in the title of this column (drawing on another insiders' grim joke), Trump ordered the IRS to punish those two men for disloyalty by giving them the tax equivalent of a rectal exam -- invasive, excruciating, and humiliating.
(B) Barack Obama told the IRS to require applicants for 501(c)(4) status to answer a lot of questions that they did not want to answer, potentially to gather intel on them and to make them wait longer for tax exempt status. Of course, donations to 501(c)(4) organizations are not tax deductible in the first place (that is only for 501(c)(3)'s), so the net effect of having to wait for this kind of tax-exempt status is ... what? The organizations might have been forced to pay taxes on any profits, except that these types of organizations do not earn profits. That, indeed, is the opposite of what they are supposed to do -- which is to gather donations and spend them immediately, to try to convince people that Obama was a socialist, fascist, Muslim, communistic Nazi. Who was born in Kenya.
As I wrote several times during the Obama non-scandal, if the White House's putative political hatchet men could only come up with something so utterly toothless to torment their enemies, Obama should have looked around for some political hacks with a bit more imagination. Seriously? Slow-walking 501(c)(4) applications for tiny groups scattered mostly around red states was the Democrats' big nefarious plot?
By contrast, training the big guns of the IRS on an individual person and continuing to probe until something turns up is the quintessential abuse of any government's tax-investigative powers. Companies complain about nuisance lawsuits and having to pay what they describe as ransom for baseless claims, but this is in an entirely different category of personal harm. The process itself is the punishment.
Where will this go? Will I find myself writing dozens more columns about this Trump/Comey/McCabe story in the next few years, or will it fade? It is easy to believe that it will go away, even though if the shoe were on the other foot, Republicans would be making a huge deal of it. (Former Bush speechwriter Peggy Noonan, after all, once seriously tried to argue that because she knew four people who were audited by the IRS, and they were all conservatives, the IRS was obviously politically motivated. Apparently, none of the those thousand points of light are still illuminated between her ears.)
Even if the worst case turns out to be true, however, the comparison between an attempted bloody coup and using the IRS to abuse political enemies is not even close. Trump might thus yet prove that he can get away with anything by committing more crimes than people can keep track of.
In any case, if something new develops on this story, I will reluctantly return to the beat.