Some Empirical Evidence of IRS Political Manipulation

This morning Politico reports that there are plans for some congressional hearings into the unfolding IRS scandal. According to that report, these hearings will “probe whether the targeting of right-leaning groups is systemic or isolated.” In that connection, members of Congress (and others) should read this article from the Cato Journal, “Political Influence and the Internal Revenue Service.” Here’s an excerpt from the conclusion:

While history is replete with anecdotal evidence concerning the misuse of the Internal Revenue Service, this paper attempts to offer, to our knowledge, the first empirical evidence of systematic political manipulation. Findings reveal that the IRS is more active in states where noncompliance is more likely, but we also find evidence that political factors help shape enforcement patterns. For example, the IRS audits fewer returns in states whose representatives are members of congressional committees charged with IRS oversight. In addition, taxpayers in those states that gave Clinton greater political support were subjected to significantly fewer audits. Using 1995 audit rate data from the 63 IRS districts across the nation, we find that political factors offer significant explanatory power. In particular, a 10 percent increase in the vote for Clinton in the 1992 presidential election led to a 0.1 percent reduction in returns audited from the state. Thus evidence supports our hypothesis that both public-interest and private-interest motives shape IRS enforcement activity.

George Will has additional thoughts on the IRS matter:

The Post reported Monday that the IRS also targeted groups that ‘criticized the government and sought to educate Americans about the U.S. Constitution.’ Credit the IRS’s operatives with understanding who and what threatens the current regime.

Read the whole thing.