Scope and Perspective: Adjusting the Lens on the IRS Controversy

Six Facts Lost in the IRS Scandal | Money & Politics, What Matters Today | BillMoyers.com

Is This Big Tea Party Group Really an Innocent Victim of the IRS? | Mother Jones

Official at Heart of IRS Tea Party Scandal Spiked Audits of Big Dark-Money Donors | Mother Jones

The bottom line is the IRS scandal, isn’t. The IRS didn’t select Conservative groups exclusively for additional scrutiny. Nor were any denied exemption nor subject to audit. They were subject to paperwork. The scandal is the IRS doesn’t have appropriate and clear guidelines to judge what to look for in processing 501(c) 4 applications nor the manpower to review more of them. It’s scandalous that prior to adequate and appropriate review the IRS was successfully targeted by Anti-Government extremism engaged in political warfare. Until substantive evidence emerges to suggest that Conservative groups were targeted on some other criteria than flagging for generic monikers like “Tea Party” or with special intent to undermine an individual group specifically, the scandal is that the IRS affair is seriously regarded as scandal.

The scandal is that Anti-Government political organizations like the Tea Party successfully registered as 501(c)4s at all rather than designating themselves as 527s -as any forthright and legitimate organization which was engaged in political activity would do. The single reason for not doing so is to evade disclosure. Filing as a 527 would require Tea Party (and the plethora of Conservative groups designating themselves as social welfare organizations) to disclose their donors. In short, the single reason for choosing a 501 (c) 4 rather than a 527 is to game the system. In other words, to scam the government and to scam the American people.

By taking the route that astro-turfed Tea Party and other facade groups have taken facilitates political intimidation of elected officials via stealth attack ads funded by illegitimate social welfare organizations – 501(c) 4s. This, they have proven they will do, and in no short measure, during the last presidential election.

Make no mistake, that Democratic organizations responded in cold-war fashion by establishing their own “social welfare” arsenal to avoid a “funding war gap” is equally unacceptable. One place to start unwinding from fallacious “scandal” to reasonable fix is  to make the rules hard to game. Make it simple. Just as it is with regulatory measures, clear, simple rules are difficult to break. Designate 501(c)4s only for social welfare organizations with no lobbying arm whatsoever and designate 527s for political activity and lobbying of any and all kind.

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17 thoughts on “Scope and Perspective: Adjusting the Lens on the IRS Controversy

  1. Thank you Thank you Thank you…this is the post that I was trying to write in my head and haven’t had the time to finalize…except you did the topic far more justice than I could have!

    1. It was kind of dizzying trying to sort it out during the frenzied flurry of scandal-mongering, for sure! Hard to sort through it until enough information was revealed. But, I think the “scandal that isn’t” has reached a level where the chaff has sifted, and it’s pretty clear that the entire affair was political intimidation aimed at the White House. I’m not pleased by the unnecessary scapegoating that occurred to appease. Let’s hope the Obama Administration sincerely addresses the issue as one not of personnel failure, but an issue needing genuine scrutiny with realistic solutions.

  2. Indeed, Duane. Indeed. Somehow in all the brew-ha-ha a couple of other things have gotten lost. First, the framework of the investigation, second unspoken acceptance that the IG’s analyses are somehow without flaw. One can judge for oneself. The full report can be viewed here:

    http://online.wsj.com/public/resources/documents/TIGTA-201310053fr-revised-redacted-1.pdf

    Really, the frightening aspect here is Right Wing distortions of the legal code might just work to facilitate Right Wing Intimidation Tactics.

    1. Interesting report compiled at the behest, I believe, of Congress.

      But, PJ, let us not forget that the ordinary citizen can also call for an investigation of a individual entity using IRS Complaint Form 13909, http://www.irs.gov/pub/irs-pdf/f13909.pdf, against either (c)3, religious groups or (c)4, social welfare groups. While religious groups are forbidden any political activity, social welfare groups can be called to account if their political activity/expenses are excessive or disproportionate to their social welfare activity/expenses. IMO

      As noted elsewhere, I submitted a Form 13909 in 2012 against a religious group resulting in a favorable outcome.

      I urge readers to consider filing a Form 13909 complaint if there is excessive or disproportionate political activity.

  3. Right on, Duane. Thanks for the info. regarding IRS Complaint Form 13909. Also, this is where the IG investigation gets more than a bit quirky. First, the IRS initiated their criteria due to complaints lodged against the Tea Party and also out of reasonable inference given the Tea Party’s own promotional endeavors. Contrary to the IG’s designation of “inappropriate” criteria, Tea Party “issues” most certainly are germane to determining their level of political activity.

    As co-founder Mark Meckler indicated while promoting the Tea Party Patriots American Policy Summit in 2011, Tea Party participation “has made a big difference in our country’s political direction.” The platform for the Summit was their 40 year plan to transform American culture into their right-wing dystopia. If twisted enough, one might deem this grand, repugnant plan as “social welfare,” but that would be more than a stretch of credulity. The fish rots from the head down and the Tea Party knows it, which is why their 40 year plan focuses on 5 areas (2 politicized, and 3 explicitly political): Culture/Education and Legislative, Judicial, and Electoral, respectively.

    Given Their joint mission-principles: Fiscal Responsibility, Constitutionally Limited Government, and Free Market Economics one can hardly presume their tax-exempt purpose to be anything but political: https://www.teapartypatriots.org/about/
    Then there’s the disparity between what the Tea Party says and what the Tea Party does. Like, for instance, justifying their c4 status by not endorsing candidates:
    “We are a non-profit 501(c)(4) organization that does not support any political party nor do we endorse candidates.” Yet, the Tea Party endorses candidates. Just a few weeks ago in fact, as these “Tea Party Endorsed Candidates” attest: http://www.teaparty911.com/info/candidates.htm, and they certainly endorsed candidates during the last presidential election: http://www.irehr.org/issue-areas/tea-party-nationalism/tea-party-news-and-analysis/item/442-tea-party-endorsed-candidates-and-election-2012

    And in the past, Tea Party leaders routinely met and spoke directly with elected officials regarding Tea Party agenda items. The purpose for their very existence is to transform American culture by twisting its political structure – in other words the very fabric of government – to suit its Extremist agenda. Social Welfare organizations are also supposed to engage differently with the public than a business entity. The Tea Party’s devotion to “free” market economics has been applied to it its operations more than once…

    Since the astro-turfed umbrella structure of the Tea Party and its counterparts all claim the same principles, it makes perfect sense to include in the category of “further review” all Tea Party groups that come under consideration. Not only that, but getting at the donor question, which the IRS was attempting to do, cuts straight to the heart of its astro-turfed status. The IG investigation seems to have entirely glossed over that other Congressional request: to sort out legitimate 501(c)(4)s from “primarily” political entities.

    But therein lies the rub – the murky distinctions between what is “political” and what is “campaign” activity. Let’s not forget, too, that when the IRS did go after the bigger fish like Crossroads, Republican puppet-politicians in Congress went all out to ensure the IRS cease its investigation. But if citizens filed enough 13909 complaints against Conservative sham organizations, maybe the issue could be revisited. Hard to say.

    Perhaps the Attorney General will find something more that hasn’t been revealed. Though that investigation looks like another appeasing witch hunt to me. Between that and the degradation the IRS has faced at the hands of the Congressional Inquisition, it’s looking like Anti-Government Extremism can defeat rational government.

  4. WOW I am so glad I read this now I know it was the Tea Party behind this and not Obama and the IRS. Good to see the blame is put on the proper group regarding this, as we all know they are after Obama and have no respect for him, they need to be taught proper lessons on how we should respect Obama.

    1. Peter, your false sarcasm misses the major issue that the IRS has failed to enforce the (c)4 law requiring social welfare groups to expend funds “primarily” or “exclusively” for their cause. Based upon the information available, there has been no denials of the 7,000 applications in recent years. Nor have there been any citations of a loss of status by existing (c)4 groups. I suggest you read credible sources provided and stop listening to Fox news.

    2. Wow, Peter Bishop. Here’s your big chance – provide for us the documentation that proves that Obama had any hand at all in directing the IRS flagging of the Tea Party. Why don’t you look to Reince Priebus for some clues. He’s all over the Sunday shows talking about it. Maybe you can find in any of his machinations one modicum of proof…then again, maybe you can’t….

      IRS inquiries into the Tea Party pertain to the Tea Party period. The Tea Party and their affiliates are deserving of more scrutiny because, among other things,
      They claim social welfare status while, in mission and in action, they engage in zero social welfare activity. The Tea Party is a political movement. It is not a social welfare organization.
      Tea Party policy positions are consistently and unfailingly propped up by shadow organizations like “The Judicial Crisis Network” – an astroturfed shilling operation without any registration of any kind anywhere and no real-world office address of any kind anywhere. The Judicial Crisis Network is headed by Robert Bork Jr. and Gary Marx. If you’re not familiar with them, here’s the reminder: Bork Jr. specializes in corporate disinformation and corporate misinformation designed to mislead and misinform the public, and Gary Marx specializes in developing Christian front-groups to rally for energy industry deregulation. The Tea Party’s American Policy Summit in 2011, you’ll recall I’m sure, invited the Judicial Crisis Network to “meet and greet” Summit attendees at their booth entitled “Dodd-Frank Exposed.” Judicial Crisis Network is but one of many Tea Party shills.
      The Tea Party is the largest Astroturf operation ever in history, and it was launched as the front phalanx of one of the most vicious, corrosive, and clandestine political war machines this nation has ever seen. The other being Watergate – the real Watergate comparison is the Right-Wing Conservative-Libertarian war fronted by the likes of the Tea Party. Wow Peter, the cat has been out of the bag since 2010 regarding who primarily finances the Tea Party and who provides the agenda for it. Here’s a little reminder in the event you’ve forgotten:
      http://www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer?currentPage=all
      Note the presence of one pre-senatorial, now puppet-senator Ted Cruz…

      No, Peter Bishop, the Tea Party isn’t deserving of less scrutiny. It is deserving of much, much more. A quite thorough and exhaustive investigation at that which hasn’t anything to do with Obama and everything to do with the Tea Party itself. Anyone deeply concerned about preserving and enhancing the republican democracy ACTUALLY inspired by Founding Ideals should demand that the government fully investigate every aspect of the Tea Party’s funding sources and those of the front groups involved with it. Political activity is one thing, but dismantling the system from within that they purport to uphold while being funded by a network of untitled aristocrats is quite another.

      The Tea Party makes “Ponzi Scheme” look like a penny-ante craps game. Unfortunately, the roots of grass (or more accurately – jack boots) at the bottom, who so fervently believe they are “grass roots” are the ones who are getting mowed over. The truly tragic factor in the Tea Party Ponzi is that average Tea Party supporters who genuinely care about this country will operate not only against their own interests, but the interests of the entire nation. The Tea Party agenda, backed by its endless and labyrinthine, Goebbels-method propaganda network serves the interests of no average American.

  5. Question: Hey, boys and girls, what was the Wetumpka Tea Party from Alabama doing while the IRS was processing their application as a (c)4 group also known as a “social welfare” group?

    Answer: They “…sponsored training for a get-out-vote initiative dedicated to ‘the defeat of President Barack Obama…'”

    For more great “flagging” by the IRS, read: http://www.nytimes.com/2013/05/27/us/politics/nonprofit-applicants-chafing-at-irs-tested-political-limits.html?hp&_r=0

    1. Good article, Duane. If there’s any that should be complaining – and legitimately so – it would be organizations like Emerge America who were denied their status specifically due to their political positioning.

      And yeah, that Wetumpka group is a perfect example of why the IRS gets backed up as is CVFC. Both prime examples of the need for much more in depth scrutiny. Once close examinations are done, the picture starts shifting, doesn’t it?

  6. You guys need to check your facts and quit lying to yourselves and your readers… Both sides are so eager to play extremist politics here that the real truth is buried somewhere in the middle. And the majority of America is stuck in the crossfire of BS…

    Sentence #2 is a blatant lie…

    “The IRS didn’t select Conservative groups exclusively for additional scrutiny.” – Lois Lerner admitted that the IRS targeted conservative groups based on their names

    http://bigstory.ap.org/article/irs-apologizes-targeting-conservative-groups

    Sentence #3 is twist on words to cover up actions and intimidate political opponents during a presidential campaign. These actions are much worse than outright speedy denials would have been and will ultimately be the crimes that gets IRS people talking and turning on the higher ups.

    “Nor were any denied exemption nor subject to audit.” – The inspector general, J. Russell George, divulged that he informed the Treasury’s general counsel he was auditing the I.R.S.’s screening of politically active groups seeking tax exemptions on June 4, 2012. He told Deputy Treasury Secretary Neal Wolin “shortly after,” he said. That meant Obama administration officials were aware of the matter during the presidential campaign year.

    http://www.nytimes.com/2013/05/18/us/politics/irs-scandal-congressional-hearings.html?pagewanted=all

    It may take a year or 2, but they will eventually get to the bottom of this.

    1. Rick,

      Sentence # 2 is not a blatant lie. Yes, Lois Lerner indicated that the IRS used “Tea Party” and their affiliates as flagging criteria. Complaints were lodged against the Tea Party for not being what it purports to be and there are certainly enough red flags in the media that should have prompted the IRS to investigate them. Unless those Cincinnati agents admit to being plants by either Republican operatives or Democratic operatives to generate scandal, the flagging looks like reasonable and just review given the Tea Party’s known activities and its umbrella structure. The Tea Party and their affiliates ARE deserving of more scrutiny. But the IRS didn’t set aside exclusively – as in ONLY – Tea Party applications for additional review. What you are attempting to suggest is that the IRS gave additional scrutiny to ONLY the Tea Party. That isn’t correct. Nor is it correct that Tea Party groups were denied their tax exemption status. They weren’t. The article you cite demonstrates that assertion. So, thanks for lodging your bogus rebuttal then providing the documentation that disproves it. Dig a little deeper and read the IG report itself – a number of Democracy-leaning groups on the Left side of the political spectrum ALSO received additional scrutiny and were denied their tax-exempt status – groups no more “political” than the Tea Party. Only 1/3 of the groups that received additional scrutiny during the time period in question were Tea Party groups. Your next rebuttal doesn’t make any sense. The IG did the audit on the IRS.

      Here’s the scandal – the Tea Party, their affiliates and the plethora of Rove-style c4s do need much more scrutiny and the IRS was attempting to do that. Look a little deeper, Rick, and you will find that Congressional Republicans halted the IRS’s first attempt and now they’re obstructing the second. I say, Let the IRS do its job. It was attempting to apprehend levels of political activity of Tea Party groups claiming social welfare exemption status – because that’s what the IRS is supposed to be doing. This isn’t a scandal. But really, we should be praising those low-level revenue agents in Cincinnati for developing their “Tea Party” criteria in the first place. I say, provide the resources to the IRS to adequately and thoroughly investigate the Tea Party et al. and let’s see what we can see. The Tea Party should cease its squawking, buck up, fill out the paperwork, and allow the American people to see what it’s REALLY made of. I suspect, however, as has happened with Wisconsin Conservative subversives, the Tea Party will find a way to scrub and expunge all evidence of its true nature even if it were subjected to public scrutiny. If the Tea Party wants the American people to buy into its purpose then it must open itself to the public and provide complete transparency for its doings and goings on. Same holds true for every Left-leaning c4.

      The article you cite provides no documentation for Republican allegations that the White House was aware of the flagging of Tea Party applications. The flagging occurred as a matter of process not out of any pressure outside the IRS – THAT’S what the IG Report found. The political war waged in this country is being waged by Republicans and Conservative-Libertarians. Every scandalous probe – like this one – is another example of Conservative intimidation launched against the Obama Administration specifically, but more importantly, against the government apparatus itself.

      There is no cover-up here. Your suggestion that Obama knew anything about the “scandal-that-isn’t” because of J. Russell George’s testimony is absurd. His testimony proves that Republicans in Congress knew about the IG investigation since at least 2012, his testimony proves that Darrell Issa received regular updates on the IG probe since at least 2012. That means Issa and Congressional Republicans knew just as much as the Deputy Treasury Secretary and Treasury’s General Counsel knew – about the IG investigation. The one who needs to get your facts straight is you. If Obama officials covered up the IG investigation into the IRS so did Congressional Republicans. What George’s testimony actually suggests is there’s a potentially suspicious link between Issa, Congressional Republicans, and the IG. The probing question we should all be asking ourselves is this: Is the IRS “scandal” leading to bigger fish – like subverting IRS purpose to dismantle the Affordable Care Act – since Conservatives can’t eliminate it legitimately through legal means. The article you cite suggests this possibility.

      I’ll tell you what I think, Rich. I think some genuinely concerned grass roots element should launch a “Tea Party: Open Your Books!” campaign, a “Tea Party Transparency!” campaign to encourage the Tea Party to desist from its incessant whining and settle its status once and for all.

  7. Prof Rick,

    Much ado about nothing. The last sentence of the NYT piece you link to references the ousted head of the IRS, Steven Miller.

    ” He called the group’s centralization of applications from groups with names that included the words “Tea Party” or “patriots” simply “foolish mistakes” that “were made by people trying to be more efficient in their workload selection.”

    There you have it. Just a bunch of overblown bullshit.

  8. For those too busy to read links, I would submit the following as evidence of the IRS’ attempt to be even handed.

    “Emerge America, which trained women to run for office, was granted 501(c)(4) recognition in 2006, but its status was revoked in 2012. Training people to run for office is not in itself a partisan activity, but the IRS determined that the group only trained Democratic women and was operated to benefit only one party.”

    Good decision!

    http://www.nytimes.com/2013/05/27/us/politics/nonprofit-applicants-chafing-at-irs-tested-political-limits.html?pagewanted=2&_r=0&hp

    Periodic reviews of activity and funds expended as well as initial examination of goals or missions are necessary to ensure compliance.

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