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Pascrell Blasts Damning Report of Systemic IRS Failings

Watchdog investigation reveals “insufficient” IRS process approved 80% of fake charities

U.S. Rep. Bill Pascrell, Jr. (D-NJ-09), the Chairman of the House Ways and Means Subcommittee on Oversight, today blasted Internal Revenue Service (IRS) leadership following findings by the below Treasury Inspector General for Tax Administration (TIGTA) reports that the agency approved four-out-of-five fake charities that applied for tax exempt status. 

“The findings by TIGTA are the latest gut punch and embarrassment for IRS leaders. These reports are more evidence that Trump appointee Charles Rettig should be ousted,” said Chairman Pascrell. “Back in July I demanded answers for the burgeoning scandal and heard more from chirping crickets than the IRS. We have further confirmation today the IRS is rotting from the head. It is unacceptable that the IRS has in place an ‘insufficient’ process that was vulnerable to be taken advantage of by unscrupulous actors. The IRS must treat achieving tax exempt status like the crown jewel and demand as much detail as possible for anyone seeking its benefits. Finally, I appreciate the good work at TIGTA. They heard my calls for an audit and got the IRS to take needed corrective actions.”

Chairman Pascrell continued, “The enactment of the Inflation Reduction Act by Democrats activates the most important IRS investment in generations. But just as an ocean line can only avoid icebergs with a capable captain, that investment will only matter if managed by a competent leader. With Republicans vowing to continue their deliberate sabotage of the IRS, it is imperative we act fast to fix our tax agency. That starts with putting in new leadership to right the ship now.”

On July 22, 2022, Pascrell wrote to the IRS Commissioner demanding answers regarding a New York Times report identifying rampant fraud by fake charities approved by the IRS. TIGTA followed up on the inquiry with two reports on the fast-track application organizations use to request tax-exempt status, known as Form 1023-Z. TIGTA found this application provides insufficient information for the IRS to make an accurate determination about tax-exempt status. TIGTA was able to obtain 501(c)(3) status for four of five nonexistent organizations they submitted to the IRS as part of their investigation. 

On May 13, 2022, Pascrell became the first member of Congress to demand Rettig’s dismissal. He reiterated those calls on July 7 after the audits of Comey and McCabe were brought to light, saying: “If you think the audit of Donald Trump’s purported enemies was a random act of God then I have a bridge in North Jersey I’d like to sell you.” On July 8, Pascrell wrote to President Biden demanding he “fire Mr. Rettig so we can begin the crucial work of fixing the IRS.”

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