The only thing worse than wielding the awesome power of the Internal Revenue Service in a discriminatory manner is to deny it took place and then take another year to change the story yet again. In the best possible light, the revelations that the Cincinnati office of the IRS targeted conservative groups for extensive questioning could be chalked up to the failure to properly supervise overwhelmed low-level bureaucrats. But that doesn't answer why IRS officials denied the trend to Congress last year only to admit it Friday. President Barack Obama was right Monday when he called the episode outrageous. But restoring America's faith in its tax collection agency is now part of his job. He must insist this independent agency accounts for every single chapter of this debacle, no matter what it reveals.
On Friday, the head of the IRS tax-exempt unit, Lois Lerner, acknowledged to reporters that the IRS's Cincinnati office had used phrases like "tea party" and "patriot" to single out for extra scrutiny some applications for social welfare groups, known as 501(c)4s. Groups granted the status do not pay taxes but cannot participate in some political activities.
Lerner and the IRS contend it was a mistake in judgment at a time of great stress and nothing more nefarious. The U.S. Supreme Court's 2010 Citizens United decision had unleashed a surge of corporate and labor union donations and groups wanting to help spend it. Applications to be 501(c)4 groups, which can't participate directly in a candidate's campaigns but can "educate" voters, doubled. Lerner said the bureaucrats were just looking for some mechanism to sift through the onslaught. When she objected in June 2011, the use of "tea party" and "patriot" were struck from the parameters. Twice more, in January and May of 2012, the agency would rewrite the test for which applications would undergo more scrutiny, the Washington Post reported.
Yet, in March 2012, as some conservative groups complained they were being targeted for excessive questioning, IRS Commissioner Douglas H. Shulman — an appointee of President George W. Bush — testified on Capitol Hill that it wasn't true. That tune changed on Friday, as the IRS braced for the release of its inspector general audit of the episode, the draft form of which has been circulating in Washington.
The report could be illuminating, but in many ways the damage is already done. The IRS is far from beloved. Taxpaying Americans have long accepted that someone must be in charge of ensuring that everyone pays their share. But to learn that enforcement can be so cavalierly administered plays into critics' worst expectations. The only way back for the IRS is a brutal and honest accounting of how something so simple as fairness and nonpartisanship went on hiatus in Cincinnati and why leadership didn't confess to the slip right away. Anything less will just further undermine the agency and Americans' trust in government.