Despite Lerner's retirement, IRS scandal still ongoing

It’s been four months since the exposure of wrongdoing within the IRS and heads are still rolling. Lois Lerner, who ran the Tax Exempt & Government Entities Division of the IRS in Washington, D.C., is stepping down before she can be removed for mismanagement by an internal review.

“We can confirm today that Lois Lerner has retired,” said the IRS in a statement released Monday. “Under federal privacy rules, the IRS cannot comment further on individual employee matters.”

Lerner oversaw the grants of tax-exempt status to nonprofit organizations, and was informed of the IRS policy to purposely delay tax-exemption grants to groups with conservative ideology since a meeting in June of 2011.

The problems for the IRS began in 2010, when the ruling by the Supreme Court on Citizens United v. Federal Election Commission overturned many restrictions on political spending, which led to an increase in spending and doubled the amount of tax-exempt status applications being sent to the IRS. At the same time, the IRS had its budget slashed by Congress, leading to massive layoffs of IRS employees at a time when the agency needed more. The IRS was unable to scrutinize every application that was coming through, and felt bureaucratic pressure to focus on conservative groups.

The intense scrutiny on applications with names related to the Tea Party and other conservative movements began in May 2010 with the creation of a “Determinations Unit” at the Cincinnati offices. Applications that referenced words such as “Tea Party”, “Patriots” or “Constitution” were placed on hold, trapped in an IRS purgatory where they were neither approved nor denied. Applications containing words such as “progressive”, “liberal”, or “equality” were quickly approved. Many conservative groups were also asked to answer specific questions regarding donations and the political affiliations of group members. Accusations of targeting were denied by then-IRS Commissioner Douglas Shulman in 2012, who retired at the year’s end.

Of all the IRS offices involved in the scandal, the Cincinnati office is undoubtedly the most important. Both California and Washington, D.C. are firmly Democratic, but Ohio has always been a crucial battleground state, perhaps never more so than this past election when many pundits believed that it could push either Obama or Romney to victory. A list of 162 targeted groups released this summer by the IRS includes at least 10 from Ohio.

When the bubble finally burst in May of this year, Lerner was one of the first officials to address the public’s concerns. She claimed that the targeting only occurred in Cincinnati and that the IRS was “apologetic” for its “absolutely inappropriate” actions during a meeting of the American Bar Association.Media reports just days later revealed that similar targeting had occurred in California and Washington, D.C., and that Lerner’s response at the ABA meeting was an answer to a question planted by then-IRS Commissioner Steven Miller. In her testimony before Congress, she denied any wrongdoing before pleading the Fifth Amendment rights.

“We still don’t know why Lois Lerner, as a senior IRS official, had such a personal interest in directing scrutiny and why she denied improper conduct to Congress,” said Rep. Darrell Issa, R-Calif., head of the House Committee of Oversight. “Her departure does not answer these questions or diminish the committee’s interest in hearing her testimony.”

The IRS scandal may have faded from the front pages of newspapers and news websites, but investigations continue. Lerner follows Miller and Joseph H. Grant as the third person to resign in the wake of the scandal, but she certainly won’t be the last. Congress and the Justice Department will dig deeper into a scandal that shows how partisan politics have become, and possibly deepen those political differences as well.