Since I last wrote about the IRS’s improper targeting of Tea Party groups for scrutiny of their tax-exemption applications, it appears the situation is less nefarious than originally thought. The culprit appears to be incompetence, lack of guidance, and an absence of clear guidelines as opposed to outright partisan targeting of political opponents.
What we have learned since May 14:
- There is no clear definition or set parameters for what constitutes political activity in a 501(c)(4) organization;
- In 1959, IRS wording changed from “exclusively” involved in social welfare to “primarily” involved in social welfare. The “exclusively” wording should be reinstated;
- The Cincinnati office was staffed with people given little to no guidance for reviewing these applications;
- Due to staff and budget reductions at the IRS over the years, fewer resources were available to handle the deluge of tax-exemption applications, so employees searched for shortcuts to speed the process along, which led to the inappropriate BOLO (be-on-the-lookout) criteria;
- 501(c)(4) groups are not required to apply for tax-exemption;
- The Obama Administration had no hand in and gave no direction to IRS staff to target conservative groups;
- The one group that did have its status revoked was a liberal group, Emerge America;
- The biggest social welfare groups were not flagged for scrutiny.
To play Devil’s advocate, one can make an argument that the IRS was doing their job. Groups that have the words “anti-government” and “anti-tax” in their names or in their mission statements could be red flags for abusing/ignoring IRS tax-exemption rules, so they were profiled. This is similar to law enforcement profiling of Muslims (FBI and CIA searching for terrorists) and other minority groups (New York City’s Stop-and-Frisk program), which many conservatives support. Still, progressives would be outraged if IRS officials were targeting liberal groups, so they must be just as concerned when it is done to conservative groups.
The bigger issue is that while there are real social welfare groups, some political groups are without doubt hiding behind the 501(c)(4) designation so that they can raise money without being subject to disclosure. That needs to change. If they want to be involved in politics, they should organize as a 527, where they will still receive tax-exempt status but have to reveal their contributors.
Republicans in Congress continue to search for a connection between the IRS and the White House in this scandal. We’ll see how it all transpires… Our leaders still need to be focusing on jobs, but sadly, that seems to be much less of a priority for them at the moment. Scandals are so much more fun.
Cross-posted at The Feisty Liberal
- How Obama Could Start Fixing the IRS
- Profiling is Great…Except When You Do it To Me
- The IRS controversy isn’t about taxes. It’s about disclosure
- Six Facts Lost in the IRS Scandal
- The Real IRS Scandal
- Some tea-party groups examined by the IRS indeed crossed the line