America's IRS Scandal Is Better Than Canada's

Christopher Flavelle writes editorials on health care, energy and environment for Bloomberg View. He was a senior policy analyst for Bloomberg Government and chief speechwriter for the leader of the Liberal Party of Canada.
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The IRS scandal offers plenty of reason to be upset. It also contains some nuggets of good news: The inspector general did his job. The administration fired the agency's acting commissioner. And IRS investigators may now think twice before applying partisan filters.

In the end, the system worked.

If that seems too piddly to be thankful for, consider a similar case in Canada, where opponents of the government likewise found themselves in the taxman's crosshairs. In January 2012, Canada's minister of natural resources criticized environmental groups opposed to the government's proposals to build oil sands pipelines, calling them "radical" and accusing them of taking foreign funding.

Two months later, the government gave the Canada Revenue Agency, the country's equivalent of the IRS, additional money for "education and compliance activities with respect to political activities by charities." Prominent groups that opposed the pipelines, such as Tides Canada, announced their charitable status was being audited. Opposition politicians called the audits "politically motivated."

At this point, the two stories diverge. In his report released this week, the IRS inspector general, J. Russell George, wrote that he started his review because members of Congress complained. His review led to nine recommendations, seven of which the IRS has agreed to.

In Canada, by comparison, there was no investigation of complaints of political targeting. Heads didn't roll. The audits continued (although the government had revoked just one charitable status by the end of March). The audit of Tides Canada is still open.

So while the IRS scandal is obviously upsetting, it's also a chance to appreciate the system of checks and balances that help make this story unusual. That story revealed the power of individuals within the IRS to wreak havoc, but also the organizational restraints on that power -- slow though they may be.

Unlike other scandals, the sweep of wrongdoing here wasn't exposed by congressional hearings or dogged journalists (who probably would have found it out eventually), but by the agency itself. That's small comfort, and it doesn't absolve the administration of an ounce of responsibility. But in a situation like this, it's what passes for good news.

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To contact the author on this story:
Christopher Flavelle at cflavelle@bloomberg.net