After facing tough questions over the Tea Party controversy, the IRS now has to answer questions regarding the billions in tax credits given to the paper industry. In the Tea Party controversy, the IRS focused on the biases of a few employees, but the tax credit controversy has revealed that top officials of the IRS may have acted under pressure.
The IRS accepted responsibility for the Tea Party scandal and promised work would be done to rebuild the nation’s trust. Now, the IRS is under the microscope because of the $2 billion worth of tax credits it gave to the paper industry at a time when the country was facing an economic crisis.
The IRS tried to defuse the situation with a statement, “We didn’t produce any guidance on this.” IRS spokesman Anthony Burke said. He went on to say that the agency did not offer any “private letter rulings” either. Private letter rulings are offered at the request of companies, but none of the paper companies asked for the tax credits, according to the IRS.
The ease with which the tax credits were cleared leads to suspicions from outside parties. However, before pronouncing a judgement on the agency, it is important to probe the process that led to the clearing of the tax credits. It is believed aggressive lobbying by the paper industry caused the IRS to allow the credits to be issued.