The Daily Caller News Foundation has found an email from Lois Lerner in which she seems unconcerned with potentially misreported political spending by labor unions. Lerner's disinterest toward labor unions is in glaring contrast to her persecution of conservative and tea party groups. The finding not only shows how the IRS played favorites, but how labor unions get special treatment from the government. After someone informed Lerner that the AFL-CIO, the Teamsters union, the NEA, and UNITE-HERE were all reporting millions of dollars in political spending to the Department of Labor but none to the IRS, then-director of the IRS Exempt Organizations department said,
We looked at the information you provided regarding organizations that report substantial amounts of political activity and lobbying expenditures on the DOL Form LM-2, but report little to no political expenditures on the Form 990 filed with the IRS…We believe this difference in reporting does not necessarily indicate that the organization has incorrectly reported to either the DOL or the IRS…Lerner attempted to explain that there may not have been a controversy, claiming that,
The Form LM-2 does not separate this reporting from the reporting of lobbying expenditures...Furthermore, even if section 501(c)(5) labor organizations were required to report their lobbying expenditures, the amount required to be reported on Form LM-2 includes activity, such as attempting to influence regulations, that is not required to be reported as lobbying, as the IRS limitations apply to legislative lobbying.
There's a crucial distinction in Lerner's explanation: Notice that she did not say there weren't any instances of spending for legislative lobbying on the LM-2 forms, she simply says that LM-2 forms require reporting of expenditures that go towards influencing regulations (which do not fall under the jurisdiction of the IRS) along with expenditures for legislative lobbying. That seems like a cop-out.
Lerner is right, however, in saying that there is no clear distinction between lobbying for federal regulations and legislative lobbying on an LM-2 form. Schedule 16 is the section of Form LM-2 where unions list their political spending and it requires unions to list, "Political activities and lobbying," without requiring a distinction between legislative lobbying and activity to influence regulations.
Maybe it was the case that those unions spent millions only on trying to influence regulations but I seriously doubt that Lerner went through the LM-2s line-by-line to find out if in fact there was not a single instance of legislative lobbying.Regardless, Lerner’s conduct toward labor unions is pretty charitable compared to her attempt to audit Senator Chuck Grassley (R-Ia.) simply because a group tried to pay for his wife to attend an event where he was speaking. Lerner also punitively scrutinized the tax exempt statuses of many tea party and conservative groups. Her disdain for conservatives was clear in emails in which the former IRS official called them “a—holes,” and “crazies.” Rep. Dave Camp (R-MI), the chairman of the Ways and Means Committee, has said, “At every turn, Lerner was using the IRS as a tool for political purposes in defiance of taxpayer rights.” The discovery of these emails confirms the breath-taking level of hypocrisy in how the IRS leveraged its power during Lerner’s reign of terror. One would think that an agency charged with collecting taxes and enforcing tax codes would be one of the most professional and nonpartisan bureaucracies but the IRS was in fact being used as a weapon against the Obama administration’s political enemies. In discriminating against conservative groups while giving labor unions a pass, the IRS has joined the ranks of other highly partisan bureaucracies, like the National Labor Relations Board and the Department of Labor, which routinely favor certain private entities over others in disputes. Congress must increase its oversight of these federal agencies to prevent them from being hijacked for partisan political interests in the future.