A contrarian point of view

| The right wing is up in arms because the Cincinnatti office of the IRS, years ago, began scrutinizing organizations applying for tax-exempt status, ones with terms like "Tea Party" or "Patriot" in their names.

After the story broke on Friday with the "leak" of a draft Inspector General's report, Republicans have commandeered every microphone to denounce a vast left-wing conspiracy.  Appearing on Meet the Press, Representative Darrell Issa of California, chair of the House Oversight and Government Reform Committee, said, “The bottom line is they used keywords to go after conservatives.” Hearings will be held! Investigations will be conducted! Heads should roll, by Jove! Before long, I'm sure, Hillary will be implicated in the scandal as well.

Update: 5/15. The report has now been released, and this is Ezra Klein's (Washington Poast: Ezra Klein's Wonkbook) interpretation of the what it says:

The key story of the report seems to be this: In the summer of 2010, in response to a huge surge in 501(c)(4) applications and media stories that some of these groups were illegally acting like political organizations, a group of IRS officials developed inappropriate criteria for identifying overly politicized 501(c)(4)s applicants. Those criteria included looking for the words "tea party" or related terms. In July 2011, the director of the IRS told them to knock it off and use more politically neutral criteria that focused on the activities of the group rather than the name or ideology of the group.

What did the alleged scoundrels do? The IRS grants tax-exempt status to certain organizations under section 501(c)(3) or 501(c)(4) of the tax code. These classifications are for true charities [501(c)(3)] or social welfare [501(c)(4)] organizations; one of the primary differences is that contributions to 501(c)(3) organizations are tax deductible, whereas contributions to 501(c)(4) are not. (The Supreme Court "Citizens United" decision that unleashed corporate political spending was about 501(c)(4) organizations.)

There has been an explosion of organizations filing for 501(c) tax-exempt status, and to a great extent, these organizations are pulling a scam on US taxpayers. Karl Rove's  Crossroads Grassroots Policy Strategies (Crossroads GPS), for example, has 501(c)(4) status, and if you believe that organization is non-political I've got some land to sell in Palmdale. So my view is that the IRS should be giving these groups very careful scrutiny.  The government does not take in nearly enough revenue to meet all the needs that citizens want met, and tightening up the rules on these two sections is a good place to start. The problem is not that did something they should not have done — the problem is that they did not do it well.

The gift that will keep on giving

Where the folks in the Cincinnatti IRS office went wrong is that they chose, in a very ham-handed way, to look only at groups on the conservative side of the spectrum. That was a gift to the Darrell Issas and Eric Cantors and Mitch McConnells of the world, and it is a gift that will keep on giving.

It just feeds the paranoia of all those anti-government nut cases that are convinced the government is out to get them. 

One thing it's good at doing

Senator Marco Rubio, who is trying to stake out a position as serious potential Republican presidential candidate made a clarion call for the resignation of the IRS Commissioner (head of the Internal Revenue Service). But as pointed out by a nice article in NYMagazine, there are just a few problems with that:

But then, the current generation of Republicans are never concerned about the facts, as long as they can say something that will damage Obama. Or Hillary.

Woe is us.

Last updated on Apr 13, 2018



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