IRS Urged to Pay $1,000 'Apology Awards'

U.S. taxpayers' top citizen advocate in the Internal Revenue Service has proposed $1,000 awards to people who have been treated unfairly in the targeting of groups seeking tax-exempt status.

The apology payments, which are meant to be symbolic rather than monetary fixes, are necessary, said Nina Olson, the IRS' national taxpayer advocate, because the agency has failed to honor most of the items in its own Taxpayers Bill of Rights, USA Today reports.

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Calling the IRS "an institution in crisis," Olson noted that the agency's internal chaos has kept it from treating people fairly.

She outlined her concerns in a report delivered to Congress in the wake of news that under the Obama administration, the IRS scrutinized conservative political groups who had filed for tax-exempt status. Their petitions were held up, some for as long as two years.

"As a consequence of this crisis, the IRS gives limited consideration to taxpayer rights or fundamental tax administration principles as it struggles to get its job done," Olson said, suggesting the agency do something tangible to right the wrongs.

Acting IRS chief Danny Werfel, who took over leadership of the service amid the growing scandal, acknowledged to Congress that certain groups were held up and pledged to work with the advocate's office to improve taxpayer rights.

Olson's gesture comes as a growing number of plaintiffs are lining up to sue the IRS, the American Center for Law and Justice, a public advocacy law firm, disclosed on Tuesday.

According to a report in The Daily Caller, 41 groups are suing the IRS for backlogging their applications, a number that continues to rise as more come forward to acknowledge their treatment, said the ACLJ's Chief Counsel Jay Sekulow.

"The floodgates opened after we filed our initial lawsuit," said Sekulow, who called the IRS' actions a violation of the First and Fifth amendments to the Constitution as well as a violation of the Administrative Procedure Act.

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Sekulow said that of his client groups in the lawsuit, five were so frustrated they withdrew their applications, 17 continue to wait for an answer, and 19 finally were given tax-exempt status.