Amended in Assembly January 6, 2014

California Legislature—2013–14 Regular Session

Assembly Joint Resolution No. 25

Introduced by Assembly Members Gorell and Conway

(Coauthors: Assembly Members Allen, Bigelow, Chávez, Dahle, Donnelly, Beth Gaines, Grove, Hagman, Harkey, Jones, Linder, Mansoor, Melendez, Morrell, Nestande, Olsen, Patterson, Wagner, Waldron, and Wilk)

June 12, 2013

Assembly Joint Resolution No. 25—Relative to the Internal Revenue Service.

LEGISLATIVE COUNSEL’S DIGEST

AJR 25, as amended, Gorell. Internal Revenue Service.

This measure would urge the President and the Internal Revenue Service (IRS) to comply with all requests related to congressional inquiries related to IRS misconduct in a full and transparent manner, and ensure that all government employees are made available for questions relating to the application of tax exempt status for religious organizations. This measure would also urge the begin delete oppointment end delete begin insert appointment end insert of begin delete on end delete begin insert an end insert independent counsel to investigate the actions of the IRS.

Fiscal committee: no.

WHEREAS, Throughout its history, millions of people have
come to the United States seeking a haven from religious or
political persecution in their native lands; and

WHEREAS, The democratic ideals of religious liberty, the
freedom to associate and express one’s views without fear of harm
or recrimination, and a government that derives power from the
consent of the people it governs continue to be this nation’s guiding
principles; and

WHEREAS, People who live under oppressive regimes around
the world today look to the United States as a beacon of freedom,
and it is essential that officials at every level of government set an
example by administering just laws without malice or prejudice;
and

WHEREAS, The federal government is entrusted by the people
with great powers, including the power to tax, and the constitutional
guarantee of checks and balances was first established to safeguard
Americans from harassment or intimidation based on their political
or religious beliefs; and

WHEREAS, President Barack Obama encouraged all Americans
in the 2013 proclamation for “Religious Freedom Day” to “let us
remember the legacy of faith and independence we have inherited,
and let us honor it by forever upholding our right to exercise our
beliefs free from prejudice or persecution; and

WHEREAS, Organizations, such as nonprofits and charities,
seeking federal tax’ exempt status are required to file an application
with the Internal Revenue Service (IRS); and

WHEREAS, The IRS’s Exempt Organizations Function, Rulings
and Agreements Office, which is headquartered in Washington,
D.C., is responsible for processing applications for tax-exempt
status and for reviewing applications as they are received to
determine whether organizations qualify for this status; and

WHEREAS, During 2012, members of Congress raised concerns
to the IRS about targeting non-profits and charities based on their
perceived political position and the IRS’s performance of its duty
to treat similarly situated organizations consistently. In addition,
several organizations applying for tax-exempt status under IRS’s
Section 501 (c) (4) of the Internal Revenue Code made allegations
that the IRS targeted specific groups applying for tax-exempt
status, delayed the processing of targeted groups’ applications for
tax-exempt status, and requested unnecessary information from
targeted organizations; and

WHEREAS, In early 2012, the Inspector General for Tax
Administration began an audit reviewed case files using acceptable
government accounting standards. Case files were selected in June
2012 and the audit was concluded in February 2013; and

WHEREAS, The Inspector General for Tax Administration
found that the IRS in 2010 “developed and began using criteria to
identify potential political cases for review that inappropriately
identified specific groups applying for tax-exempt status based on
their names and policy positions” (Inspector General’s Final Audit
Report reference number 2013-10-053, Page 5); and

WHEREAS, The Inspector General’s report found that the IRS
developed and began using criteria to review specific groups
applying for tax-exempt status based on their names or policy
positions instead of developing unbiosed criteria based on the tax
laws and treasury regulations; and

WHEREAS, IRS officials started using search terms such as
“patriot,” “9/11,” and “tea party” to flag certain applicants for
additional scrutiny and placing them in a “Sensitive Case Report”
resulting in the use of selected criteria for reviewing their
applications; and

WHEREAS, Some flagged organizations were required to
provide further documentation, including what books their
members were reading, as well as what they had posted on social
networking Websites. One group was asked to “please detail the
content of the members of your organization prayers.”
Organizations were informed that if they did not provide the
information sought, they would not be certified as tax-exempt; and

WHEREAS, In 2010, several Jewish groups were targeted by
the IRS and asked inappropriately whether their group “supported
the existence of the land of Israel”; and

WHEREAS, The Treasury Inspector General for Tax
Administration made numerous recommendations to the IRS,
including that they should document the reasons why applications
potentially involving political campaign intervention are chosen
for review, develop a process to track requests for assistance, and
expeditiously resolve remaining political campaign intervention
cases, some of which have been in process for three years, and
request that social welfare activity guidance be developed by the
Department of Treasury; and

WHEREAS, Senior program managers at the IRS have refused
to answer Congress’s questions under oath, invoking their right to
plead the fifth Amendment under the advice of legal counsel; and

WHEREAS, The IRS must do more so that the public has
reasonable assurance that the IRS will not use political criteria to
administer the tax laws of the nation and will operate in a fair and
impartial manner in the future; now therefore, be it

Resolved by the Assembly and the Senate of the State of
California, jointly, That the Legislature holds that government
agencies, including the IRS, should apply the law fairly. Profiling
citizens based on their political positions should not be allowed;
and be it further

Resolved, That the Legislature commends the United States
Congress for investigating the alleged misconduct at the Internal
Revenue Service and urges the President and the Internal Revenue
Service to comply with all requests related to congressional
inquiries in a full and transparent manner and ensure that all
government employees are made available for questions relating
to these matters; and be it further

Resolved, That an independent counsel be appointed to
investigate the actions of the IRS in this matter and to determine
if any violations of law or policy occurred begin delete ,and end delete begin insert , and end insert be it further

Resolved, That the Legislature condemns the actions of those
involved in the misuse of their office and position to discriminate
against individuals based on their political views; and be it further

Resolved, That the Legislature begin delete stands in support of the Treasury
Inspector General for Tax Administration’s recommendations for
the Internal Revenue Service and urges that, if the IRS fails to take
action, Congress should pass and the President should sign
legislation that enacts those recommendations into federal law. end delete
begin insert urges the full cooperation of involved individuals and governmental
entities, including Congress and the Federal Bureau of
Investigation, in order to take all appropriate action to prevent
discrimination in the application of the law by the IRS; and be it
further end insert

begin insert

Resolved, That the Chief Clerk of the Assembly transmit
copies of this resolution to the President and Vice President of the
United States, to the Speaker of the House of Representatives, to
the Majority Leader of the Senate, and to each Senator and
Representative from California in the Congress of the United
States.

end insert