Tuesday, May 21, 2013

Scandal #2 - the IRS

Just as the Benghazi scandal seems to be turning around to bite Republicans on the ass, they come up with a new reason to be outraged. The IRS has been targeting Tea Party groups!

And that's true,... sort of. After Citizens United, which really opened the floodgates for corporate money to buy politicians, there was a huge increase in applications at the IRS for 501(c)4 tax-exempt status. (At the same time, the IRS budget was cut, thanks to the relentless efforts of Republicans to drown America in a bathtub.)

Now, 501(c)4 organizations don't have to disclose their donors, which means that corporations - and individual billionaires - can influence elections secretly. Unfortunately, they're not supposed to be political groups. After Citizens United, they can spend money on politics, to some extent, but they're supposed to focus on "social welfare," not political campaigns.

At the IRS, faced with a drastically-increased workload, and fewer people to do the work, someone decided to concentrate on 501(c)4 applications that seemed political (reasonably enough, I'd think). They weren't targeting just right-wing groups, and certainly not just Republican groups (the Tea Party claims to be nonpartisan, you know), and there doesn't seem to be any malicious intent to it.

Now, true, the IRS would be a potent weapon to use against political opponents, and many presidents have attempted to do so. But that's exactly why there's a degree of separation between the White House and the IRS. The White House is not supposed to get directly involved in IRS investigations, and absent any evidence otherwise, it's not surprising that they weren't aware of what was going on. That's kind of the whole point about keeping politics away from the IRS!

Now, yes, this was probably wrong,... although, frankly, it makes sense to me. If you're worried about political groups pretending to be social welfare groups so they can illegally get tax-exempt status and maintain complete secrecy about who's funding them, it would seem to make sense to focus on... political groups. And the real scandal here is that 501(c)4 groups exist at all, and can anonymously influence political campaigns as they do.

But there are two things which make this whole 'scandal' completely batshit crazy. The first, as mentioned above, is that the IRS director while this was going on was a George W. Bush appointee! Yes, Barack Obama fired the acting director of the IRS, but this didn't happen under his watch. So are we really supposed to believe that a Republican political appointee conspired with the Obama White House to attack Republican groups?

And the second thing, which Stephen Colbert explains so well in the second video below, is that these organizations do not need IRS permission to operate as 501(c)4 groups! Tea Party groups are complaining about delays in getting IRS permission - note that none have been denied tax-exempt status - but they didn't need that approval, anyway!

I repeat, you don't have to get IRS permission to operate as a 501(c)4 group. You can apply to them, if you want, but it's not required. Furthermore, no conservative group was denied 501(c)4 status, either. There were long delays for some groups, and requests for more information, but that's because the IRS was trying to do its job with limited resources.

Anyway, here's your humorous take on this:


jeff725 said...

The one thing that keeps buzzing in my head about this "scandal" is that the report came out LAST MAY!!

Question: Why would the Republicans sit on this for a WHOLE YEAR?? It had the possibility of being a formidable "October Surprise" for them during last year's election.

WCG said...

I don't think so, Jeff. Republicans were asking questions about it then, because Tea Party groups were complaining about the delay.

I don't know how much the IRS knew about it then. They've been 'investigating' this for some time, and Republican sources within the IRS certainly might have passed on some information. (In fact, the head of the IRS was a Bush appointee holdover.)

But the IRS didn't make this public until recently. I could be wrong, but I'm pretty sure a 'report' didn't even exist last May, though there might have been gossip about it.

jeff725 said...





WCG said...

Thanks for the links, Jeff. Re. that timeline, there's a big gap between June, 2012 and April, 2013, but I think it backs up what I said previously, that there was no report a year ago.

And all of this, I think, backs up my contention that there is no scandal here. Or, if there is a scandal, it's that 501(c)4 groups exist at all.

Chimeradave said...

This isn't the IRS's fault. It's the government's fault. Why is there an approval process for something that doesn't need approval? If they hadn't made the approval lip-service (because what they really want is free money) then the IRS would have had good reason to examine these things.

jeff725 said...

Oh, I agree. There is no scandal here. I'm just scratching my head trying to figure out why the Republicans didn't try to use this during the 2012 Presidential campaign. They had, or at least, Darrell Issa had some knowledge that something was afoul with the IRS.

My only guess is the GOP thought they didn't have anything substantive enough to work with. Of course, lack of substance never seemed to stop them in the past (swift-boating John Kerrey, Obama's birth certificate, Obama's "a Muslim," etc.).

I need to quit over-thinking this and just let the Republicans cook in their own sauce. :)

Anonymous said...

I agree the facts of this are not adding up at all. These Tea Party groups are clearly open flaunting a disregard for the law. You cannot do illegal things then when the IRS looks into your illegal activities you scream bias.


Further they were using this "secret political laundering" process in a 34 to 1 degree to liberal groups. If liberals are hiding 1 billion dollars in donations and conservatives are hiding 34 billion dollars and I am the IRS in charge of fixing this process, I am going to go after the conservatives. That is simple math, not partisan attack.


WCG said...

There's an approval process so your donors will know it's tax-deductible. When you're a billionaire giving millions to a 501(c)4, you want to be sure it's tax deductible, and the only way to do that is to get an IRS ruling first.

No, it's not required. But if the IRS later decides your group doesn't meet the requirements, some donors could be facing a big tax bill. Just as well, as far as I'm concerned, but that's the issue here.

WCG said...

Thanks for the links, Anonymous. The big scandal is that these groups exist at all, using not just tax-exempt money to influence elections, but anonymous tax-exempt money.

But this is our fault (collectively). We elected Republican presidents who packed the Supreme Court with far-right extremists. It's not an accident that our political system has been sold to the highest bidder. That was deliberate.