EDITORIAL: Byzantine tax code invites IRS corruption

In an interview held just ahead of the Super Bowl kickoff, President Barack Obama got to play a little defense against Fox News host Bill O’Reilly. The president wasn’t nearly as good as the Seattle Seahawks’ unit.

When asked about the ongoing probe into IRS targeting of conservative groups seeking tax-exempt status, and whether corruption was involved, President Obama said: “There were some bone-headed decisions out of a local office,” but that there was “not even a smidgen of corruption.” Apparently, the president forgot that Lois Lerner, then-director of exempt organizations for the IRS, exercised her Fifth Amendment right against self-incrimination during one of the inquiry’s initial House hearings last May.

Three days after the president’s interview with Mr. O’Reilly, his claim unraveled during yet another hearing into the targeting scandal. On Feb. 5, House Ways and Means Committee Chairman Dave Camp, R-Mich., revealed a June 14, 2012, email from Treasury attorney Ruth Madrigal to key IRS officials in the tax-exempt department — including Ms. Lerner. The email read: “Don’t know who in your organizations [sic] is keeping tabs on c4s, but since we mentioned potentially addressing them (off-plan) in 2013, I’ve got my radar up and this seemed interesting.”

The translation of “off-plan,” as reported by The Daily Caller: “The Treasury Department and Ms. Lerner conspired to draft new 501(c)(4) regulations to restrict the activity of conservative groups in a way that would not be disclosed publicly [meaning that their plans would not be published on the public schedule], according to the House Committee on Ways and Means. They planned the new rules in 2012, while the IRS targeting of conservative groups was in full swing, and not after the scandal broke in order to clarify regulations, as the Obama administration has suggested.”

That’s a long way from a bone-headed decision out of a local IRS office, and if it’s not evidence of corruption, then Webster’s needs to come up with a new definition.

There are many issues at play in this investigation, but what’s most noteworthy now that tax filing season is underway is that all of this activity, secrecy and targeting results from the complexity of the U.S. tax code. Those books give the IRS the power to regulate political speech, fully disclosed or otherwise, and punish expression its employees disagree with.

In the wake of the latest email revelations, the Republican-led House has an obligation to determine the depth of IRS misconduct. However, no matter how thorough the investigation, even if it results in consequences for those involved, the underlying problem will remain. It’s the tax code. There is not a person in this country, conservative or otherwise, who would emerge from the scrutiny of an IRS audit unscathed. The tax code is so overwhelming and changes so frequently, it’s simply impossible to fully comprehend and abide by.

As this case and many others demonstrate, it’s far past time for Congress to go on offense and simplify the tax code, instead of putting taxpayers on defense every spring. But the IRS clearly prefers the current setup. After last week’s hearing, new IRS chief John Koskinen actually apologized. But the agency’s actions were far louder, as it announced bonuses to bolster employee morale — at a cost of $62.5 million, giving employees a 1 percent windfall.

Meanwhile, for the taxpaying public, the beatings will continue until morale improves.