What’s Wrong Today:
From
CNN:
Acting IRS Commissioner Steven Miller resigned Wednesday amid controversy over
Internal Revenue Service targeting of conservative groups that applied for
federal tax-exempt status.
The IRS appears to have acted in ways that are wholly inconsistent
with their mandate to perform unbiased investigations. In this case, the issue
is whether certain political groups, contending that they operate under a
“social welfare” part of the tax code, and should receive tax-exempt status.
It is unclear how high up the chain of command these actions went, but WaPo’s report suggests it wasn’t simply a few rogue auditors in
Cincinnati.
The Inspector
General’s Report on the IRS scandal seems to show two things:
First, how
unbelievably boring their writing is. Second, that this may be a non-scandal.
Why? Because the report
indicates that the IRS didn’t actually
deny tax-exempt status to a single Tea Party applicant. Not one.
What did they do? They
delayed responding to some applicants. They asked for inappropriate information
from some applicants. But they didn’t actually deny any nutball group’s
tax-exempt application.
When someone simultaneously tells you that they don’t intend to
engage primarily in political behavior and that their organization’s name
includes the word “party,” shouldn’t we do a little investigating?
That the IRS screwed up seems
undeniable. Instead of creating Be on
the Lookout (BOLO) criteria directed at the Tea Party, they should have
crafted ideologically-neutral language that had the effect of doing exactly
the same thing. It’s clear that the IRS violated
neutrality, investigating conservative groups by searching on “tea party” and
“patriot.” Of approximately 300 organizations sampled by the Inspector General,
about 100 had an affiliation with “Tea Party”, “Patriot”, “9/12” or other
common terms used by conservative organizations.
The
tax law in this area is an accident waiting to happen, and is one that may need some Tax Lien Help to help with in the interim period due to the concerns raised. The problem isn’t the president. It’s the Supreme Court’s Citizens United decision
and the subsequent tax law written by Congress that gives these groups tax exempt
status under rule 501(c)(4) as long as
most of their activities are focused primarily on educating the public about
policy issues, not direct campaigning.
Of
course, the ambiguities therein may be insurmountable. Many of these
groups, especially the big ones, spend millions on campaign ads mildly
disguised as “issue ads,” and under current law they can do so limitlessly and
with impunity.
According
to the NYT:
The tax code states that 501(c)(4)’s
must operate “exclusively” to promote social welfare, a category that excludes
political spending. Some court decisions have interpreted that language to mean
that a minimal amount of political spending would be permissible. But the IRS
has for years maintained that groups meet that rule as long as they are not
“primarily engaged” in election work, a substantially different threshold.
Nowhere do the rules specify the meaning of “primarily
engaged”. At what point does an issue ad cross
the threshold into a campaign ad? What kind of “education” is provided and how
does it promote “social welfare?”
Consider
what CBS reported this week regarding Karl Rove’s ad about
Hillary Clinton and Benghazi:
field of candidates and the last election just six months in the rearview
mirror, American Crossroads on Sunday aired the first attack ad of the 2016
presidential campaign, panning Hillary Clinton for her role in the “cover-up”
of an attack last Sept. 11 on a US consulate in Benghazi, Libya.
The 90-second paid spot-manufactured
by the Karl Rove-founded “super PAC” – was posted Friday online and
ran Sunday morning on CBS during a broadcast of “Face the Nation.”
And
the IRS hasn’t seemed particularly interested in going after the big fish, like
Rove’s American Crossroads on the right or Priorities USA on the left.
Instead, they appear to have targeted small fry on the far right. If so,
not only is that clearly biased and unacceptable, it’s also ridiculous given
the relative possibility of violations of tax exempt status by these small
groups relative to the larger ones.
Can the IRS fairly interpret and enforce these instructions?
Of course. But we should really be asking ourselves what
societal purpose is being served by carving out special tax status for any of
these groups. The Wrongologist doesn’t believe there is a single Tea
Party group in the country that isn’t primarily concerned with politics.
If
anyone can show evidence that these groups are making our political system and
our country better off, please do so. If not, no one is saying shut them
down, they’ve got a constitutional right to speak their minds.
But,
why on a tax exempt basis?
