Legal ethics angle in that IRS auditing scandal? (AP reports senior counsel knew in 2011)

UPDATE: The Atlantic is focusing on chief counsel, too:

The focus will now become whether or not IRS commissioner Doug Shulman knew about the questions when he testified that no Tea Party groups were being targeted for unfair scrutiny in front of Congress in 2012. The report doesn't shay [sic] whether or not Shulman was informed about the Tea Party questioning, but it does show the IRS's chief counsel was. It's standard procedure for the counsel and commissioner to discuss this sort of thing before a Congressional hearing. Shulman's term as head of the IRS ended at the end of last year and he was appointed by President Bush. But Obama has yet to announce a replacement.

UPDATE 2: Apparently the Inspector General report has been leaked (here's the timelines) and here are the two key entries regarding the lawyer who knew something:

August 4, 2011: Rulings and Agreements office personnel held a meeting with Chief Counsel so that  everyone would have the latest information on the issue.

August 4, 2011: A Guidance Unit specialist asked if Counsel would review a check sheet prior to issuance to the Determinations Unit. The Acting Director, Rulings and Agreements, responded that Counsel would review it prior to issuance.

April 25, 2012: Chief Counsel’s office provided additional comments on the draft guidance developed for the Determinations Unit.

 

UPDATE 3: According to Politico, White House counsel learned only in April of the targeting. If so, perhaps the IRS lawyer thought there was no legal problem to "report up."

UPDATE 4: Reuters mentions the name of the chief counsel of the IRS, but notes that the agency has over 1,000 lawyers and that it's not clear which IRS lawyer was referenced in the time line. Reuters suggests that the meeing may have been with the office of the chief counsel rather than with the chief counsel himself.

For the most part, the news that the IRS audited groups based upon their politics isn't a legal ethics story. But the AP is now reporting that a "chief counsel" within the IRS knew about the problem back in 2011. Paul Caron's Tax Prof Blog as a round-up. We'll see how that plays out. Presumably that counsel was governed by the rules about representing organizations and by the role of government lawyer. Given that the IRS now concedes its behavior was inappropriate, one would expect that any lawyer brought into the loop would have obtained assurance that the behavior had ceased or would "run it up the org chart" to higher people in the organization. I don't want to speculate too much but if a lawyer knew back in 2011, it will be interesting to see what he/she did with the info.

Another thing I found odd was the IRS's decision to disclose its bad behavior at an ABA conference. I wonder who thought that that was the right time and place for revealing the abuse?