The tax man danceth? Line dance video complicates IRS defense

As if the IRS didn't have enough problems, an inspector general report cites waste and abuse in funny videos produced for conferences. They didn't cost much, but the image doesn't help.

The IRS says it has reformed since a pre-2012 election period when it admits to targeting conservative groups and paying tens of thousands of dollars to produce goofy and expensive videos, including one of employees line dancing to the “Cupid Shuffle,” to spice up a conference in California.

But l’affaire IRS isn’t going away any time soon, with more hearings on internal IRS shenanigans scheduled next week, particularly focused on a scathing new Inspector General report on spending within the agency, highlighted by the employee videos, which acting IRS commissioner Danny Werfel called “vestiges of another era.”

At the same time, the scope of inquiry into the targeting of patriot and tea party groups has moved beyond original assertions of a few rogue low-level employees to 88 people whose computers Congress wants to inspect, and news that Doug Shulman, the IRS commissioner during the tea party targeting era, had 147 cleared visits to the White House, more than any other agency head. (It’s not clear how many times he actually visited the White House.)

All of those revelations taken together are fueling a growing number of questions about an agency whose tendrils dig deep into the economic lives of every adult American.

To be sure, none of those facts mean that there was collusion with the White House or Democratic operatives to use the IRS as a political tool to wither away Republican support and cash ahead of the 2012 election. Moreover, many Democrats believe Republicans are gussying up the details only to score points against Democrats in power, when it’s bureaucrats at an independent agency who are at fault.

But the issue has now become enough of a matter of public trust that Congressional hearings and internal investigations may ultimately not be enough to ease the mind of taxpayers. In a Quinnipiac poll last week, 76 percent of Americans – with a plurality in both parties – said they want Obama to appoint a special counsel to sort out what many say has become a foundational conundrum for the Republic.

“What does it mean when half the country – literally half the country – understands that the revenue-gathering arm of its federal government is politically corrupt, sees them as targets, and will shoot at them if they try to raise their heads?” wonders Wall Street Journal columnist Peggy Noonan in a widely cited column calling for an independent counsel into the IRS scandal. “That is the kind of thing that can kill a country, letting half its citizens believe that they no longer have full political rights.”

At the same time, appointing special counsel could benefit President Obama, too, silencing critics in the short term and sending the scandal onto the back pages. The danger with a special counsel, some liberals note, is that a prosecutor could expand a “witch hunt” that could damage Obama.

“Yes, it is difficult for an administration to investigate itself credibly. So be it,” writes Tod Lindberg in The New Republic. “That’s in the nature of the executive power in our system. Any ‘solution’ ends up creating still worse problems. There may come a point when the path of least resistance for Obama is to acquiesce and agree to appoint a special counsel. If he does, he will almost certainly regret it.”

It’s not clear how the latest IRS video, released by the agency on Friday, a traditional day for Washington to dump unflattering stories, will play into the debate over whether to appoint a special prosecutor. The release came after two videos from a 2010 conference were released in late March, showing IRS employees dressed as characters from 1970s shows Star Trek and Gilligan’s Island.

The third video – which cost $1,600 to produce – shows IRS employees “line dancing” on a stage, as part of a team building exercise. Mr. Westfel, the new acting commissioner, said that the agency has cuts its conference and entertainment expenses by 80 percent.

"While there were legitimate reasons for holding the meeting, many of the expenses associated with it were inappropriate and should not have occurred,” Westfel said in a statement

The videos will become part of Congressional hearings on Thursday, when the House Oversight and Government Reform Committee will hear testimony on a new Inspector General report about waste inside the IRS, titled "Collected and Wasted: The IRS Spending Culture and Conference Abuses.”

Republicans say the videos and the tea party targeting are of a piece, shaking faith in government. So far, several IRS officials have resigned, and one key employee, Lois Lerner, told Congress she had done nothing wrong before refusing to answer more questions last week, citing the Fifth Amendment right against self-incrimination.

“Whether it is the tens of thousands of hard-earned taxpayer dollars spent to produce frivolous entertainment for agency bureaucrats, or the IRS’s own admission that it targeted the American people based on their personal beliefs, the outrage toward the IRS is only growing stronger,” Rep. Charles Boustany (R) of Louisiana, chairman of the Ways and Means oversight subcommittee, said in a statement.

Meanwhile, complaints from a growing array of conservative groups and individuals about unfair treatment at the hands of the IRS have begun to raise pointed questions from reporters who are detailing how anti-abortion activists and politically vocal military veterans suddenly received attention from the IRS after beginning to speak out against the government.