...wherein I invite all sorts of vitriol and hyperbole...
The Internal Revenue Service is catching heat for subjecting applications from Tea Party groups applying for 501(4)c non-profit status to heightened scrutiny. As we deal with the predictable screaming from anarcho-libertarians who fancy themselves dissidents, I find the Wonkblog asking a pertinent question:
In which direction does our outrage point? Do we think the tea party groups really are primarily non-political social welfare organizations and they should’ve received 501(c)4 designation more smoothly? Or do we think that they’re clearly political organizations and their applications should’ve been closely scrutinized and maybe even rejected – but so too should the applications from a host of other politicized groups on the left and the right? [Ezra Klein and Evan Soltas, "Wonkbook: Five Questions on the IRS Mess," Washington Post: Wonkblog, 2013.05.14]
We've seen a surge in organizations starting up to take advantage of ambiguity in IRS rules to hide donors and push a clearly political conservative-corporatist agenda. Might these not be exactly the kind of organizations the IRS ought to be scrutinizing?
Challenge for readers: show me one Tea Party organization that is non-political, that lives up to both the magic words and the spirit of 501(4)c rules.
I can't take your challenge on that Cory, everyone knows that groups of all political persuasions are trying to do the same thing. But I think it's worth mentioning that 'liberal' 501(c)(4) groups were not targeted. Groups such as League of Conservation Voters and MoveOn are examples. It would be easy to add keywords to target the liberal groups: "progressive", "green", "fair".
The real problem is the McCain–Feingold Act tried to do the impossible: keep "icky" (corporate) money out of politics. The Citizens United decisions further muddied the waters. The court should have struck down the whole McCain–Feingold Act and told Congress to start over (after reading the constitution first).
gawd.
I was hoping you would put Ezra's piece up!
In other news. Elizabeth Warren is wondering why the banks who weren't prosecuted for destroying a global economy with illegal actions get a better rate borrowing from taxpayers than college students who hold the future of our economy in their hands and minds.
The GOP sees low student loan rates as welfare, cuz you know...rich kids don't need student loans, and Fed rates for the banksters as good for the economy...cuz rich guys should get breaks for funding campaigns.
Can you quantify the problem for me, Ken?
(1) How many groups filed for 501(c)4 status during the period in question?
(2) How many were conservative?
(3) How many were liberal?
(4) How many of each did the IRS scrutinize?
I wish this problem could be quantified, but it's hard. According to the IRS the number of 501(c)(4) applications has doubled since the Citizens United decision. Using the IRS website I'll grab what info I can.
1) Here is 501(c)(4) data from 2008 to 2012 to show trends. I retrieved from the IRS website at http://www.irs.gov/uac/SOI-Tax-Stats-Closures-of-Applications-for-Tax-Exempt-Status-IRS-Data-Book-Table-24
2008: Total Apps Closed 1492 - Approved Apps 1202
2009: Total Apps Closed 1922- Approved Apps 1507
2010: Total Apps Closed 1741 - Approved Apps 1447
2011: Total Apps Closed 1777 - Approved Apps 1559
2012: Total Apps Closed 2774 - Approved Apps 2324
Since many of the 2012 apps closed likely started in 2011 these numbers would seem to support the IRS statement that the number apps for 501(c)(4) status doubled after Citizens United. For the purpose of this post I will assume this assumption is true.
2) There is no way to know how many were conservative without the IRS making this determination.
3) Same as number 2.
4) Again all we know here is what the IRS has admitted to. I believe if the IRS had targeted liberal groups they would have mentioned that; if for not other reason than to show they were acting non-partisan.
I do believe more data is needed. An independent review must be done to determine who exactly was targeted and why.
I don't believe this was a top-down scandal. Rather I believe it probably did start with some agents doing what they thought was right. The whole thing snowballed and got out of control. By the time they (IRS employees) realized it they were in a bad situation. Instead of owning up to it when they should have, the IRS tried to keep the situation secret.
Now an investigation has to be done to determine how far up the chain of command this cover-up went. I doubt very much Obama would have had any knowledge of the situation, those under him would have protected him from such information.
At this point there is really 2 things that need to happen before more analysis can be done:
1 - An independent review of the IRS
2 - The IRS defending itself. The burden of proof is on them now, they are the one caught in this scandal.
On the DWC page they are suggesting impeachment over this debacle. Heck, if I was Obama I won't be worried. If you can't be impeached for Iran-Contra or the Iraq War how could a President be impeached for this? Oh what a minute, I forgot about that stained dress from the GAP.... never mine.
"Challenge for readers: show me one Tea Party organization that is non-political, that lives up to both the magic words and the spirit of 501(4)c rules."
*crickets*
Reagan or Bush1 given a choice of going after corporate tax dodgers and small people, decided instead to go after hair stylists, barbers, mechanics, self-employed carpenters, et al. I don't remember any Republican congress critters went ballistic about that.
As far as I am concerned, I think the IRS ought to carefully scrutinize (or "target") every group or organization trying to get tax exemption whether they are conservative, liberal, religious, or some actual do-gooder group that really does educate and inform.
Somebody said, "Don't ascribe dumb government action to conspiracy when it can be explained by incompetence.".
Based on our recent experience with the IRS, getting a notice we owed $3,200 we had already paid and with the form dated two weeks in advance with penalties already accrued....and then finding a $320 IRS refund in our mail a week later, plain old bureacratic incompetence might explain this bit too...coupled of course to much hype and sophistry from Congress critters.
After reading Doug's experience above, we should be so overjoyed (sarcasm here BTW) that the IRS will now be in great control of our health care.
Oh Linda..."Please proceed."
Actually I was thinking that now the IRS may have more time to go after the "Free Riders" who illegally evade taxes offshore.
I do remember the outrage when the Bush administration went after the NAACP for their partisan activity. Spoiler alert...the NAACP wasn't filing a new 501 (4) C for review.
It did make me think of how badly gangs are treated for being a social club just like the "Quilters of Coddington County." Heck, they are both just social organizations. Right? Why investigate one over the other.
Linda! Hi! Now relax: the IRS will not control health care. They'll spend a lot of time enforcing the PPACA by making sure folks get their tax credits. How nice.
Jana and I are still waiting for examples of non-political Tea Party groups.
TEA Party officials were seen telling the IRS to get a brain...
http://i0.kym-cdn.com/entries/icons/original/000/001/296/morans.jpg
I mean really, how could anyone confuse a group called a "Party" as anything but "Tupperware" or "Pampered Chef" and not a political party?"
Of course, based on that picture, it could just be that they had a hard time coming up with "Mullet of the Month Club."
Just guessing everyone thinks that the newly formed "Sons of Yemen" should be treated exactly the same way as the "Sons of Norway."
Or maybe the same as the "Knights of Columbus" and the newly formed "Knights of Mohammed."
I mean come on...what could possibly raise a red flag. Just social groups dedicated to the guidelines of 501 (4) c law...right?
From the annals of "We are not a gang we are a club".
http://www.hells-angels.com/
Don't worry Jana, Holder and Obama will never touch the bankers. Your Dem's are no better than the GOP you hate so much when it comes to lining their pockets. The IRS was wrong and they know it. Nothing left to argue.
That's Attorney General Holder and President Obama to you, DimBulb.
Stay Classy Larry.
I'm not sure what your asking, because a Tea Party group would be political to begin with. But in the case of 501(c)(4) Tea Party groups the have restrictions on how to spend that money.
But, to flip it around I would ask how many political 501(c)(4) groups there are on the left that are non-political? The same answer: if they are political, they are political.
I look at groups such as the League of Conservation Voters. They have done a lot of good work (not all I agree with, but much I do), and also became a big player in the last election. However they fall in the same category as the Tea Party groups: political. Yet groups such as the League of Conservation Voters were not targeted.
Some of the occupy groups that began the last couple of years were not targeted (and there is an easy keyword: "occupy"). Granted there are fewer of the liberal-focused groups overall, but they do exist and were not targeted.
BTW, one final note. I am NOT defending the Tea Party groups. I am not a member of any Tea Party groups nor do I plan to be. When the same situation happens under a Republican administration I fight it just the same. Can everyone saying "this is no big deal" say they would act no different under a Republican administration? No matter what the IRS was wrong here!
for the record, the only group denied tax-exempt status was left-leaning.
Larry brings up a good point. Emerge America was left-leaning and was denied 501(c)(4) status. Conservative groups such as Crossroads should have been denied 501(c)(4) status for the very same reasoning Emerge America was denied. I'm still not sure why the IRS picked that one group out to deny, it was an odd outlier.
not a scandal, it's being reported that two (2) IRS staff are involved:
http://www.cnn.com/2013/05/15/politics/irs-conservative-targeting/
I guess I don't understand. The very language of "501(c)(4)" makes it simple and plain that politics cant be involved in an organization seeking exemption from taxes. Left, right, right up the middle, church related, satin loving, it doesn't make any difference. If it is political it isn't legal.
This can all be taken care of in short term by going after every nonprofit that files a "501c" no matter who or what they represent. And yes its time for churches to pay taxes to. Its time to treat churches the same as every other organization that preaches from the pulpit. NO MORE FREE RIDES FROM ANYONE.
The Blindman
"Tea Party Groups Applying for Social Welfare Status... When In Fact, Their Ideology Deplores Social Welfare. How is THAT not a Red Flag?"
Courts or the IRS have apparently combined partisan and political mostly regulating overtly partisan rather than "political". We've all heard the nonsense ads that tell us to send e-mails or letters to some politician the right wing groups have identified as being in league with the Devil.
Last night on some PBS program or CBS, I heard that the TEA party type groups given extra scrutiny were only a third of the total given such scrutiny. They are professional at whining and having their cake and eating it too.
AP "Scandal," IRS "Scandal," Benghazi-"Gate" "Scandal," "Birth Certificate "Scandal," "Boston Marathon Investigation "Scandal," VA Funding "Scandal," Birth Certificate "Scandal," Solyndra "Scandal," College Transcript "Scandal," Birth Certificate "Scandal," Boehner: Look up high, look down low...ah too slow. GOP: look over there, look in here, hey there is a "scandal" everywhere. Da, da, dahhhh da...Boehner: look in the closet, search under the rugs, look behind the curtains, make sure you check all the pubs...da, dahhhhh, da da! (I could make this into a groovin' little ditty.) LOL
The IRS has admitted that they were wrong, and they have apologized.
I'll take their word for it: They made a mistake.
As they said on NPR today, it's "Nixonian." Yikes.
Stan, so if it's "Nixonian," does that mean the Obama Era is also the Nixon Era? Really? So, let me get this straight in bizarro world because I've heard the "Nixonian" thing thrown around a lot lately and I find it a laugh, but, let's just assume that since everything "Obamian" is now "Nixonian" that means Obama is going to resign in 2014 like Nixon did in 1974? LOL My next question: who's the next Gerald Ford of the Democrats, then?
So many "scandals" and so little time...the Congress of Clowns just gotta whine. Get the cameras rollin' so we can do some trollin' we got get busy and bring this President down. We don't have time to focus on the domestic affair...people without jobs is no longer our care. No, no, no we got bigger fish to fry and they're in the White House because we dream that someday it will again be our house. We are the Party that claims we that we stand with you as long as you remember that it's really not about you...no, no, no it's about us and we want it the ball...the power, the glory, and most importantly to control all. So, on with this business of clownin' around...to make sure there is investigations that abound!
The same thing happen in 2004 and I don't remember the outcry from the right then, Oh wait! That's because the IRS was was after left leaning groups.
The funny part is none of these Tea Party groups were denied tax excempt status. Funny.
G-Man I agree with your post. All this crap is just a diversion
tempest in a teabag.
This is a non-story and non-controversy only playing out in the right wing media for the benefit of the right wing and Tea Partiers.
"Here are the genuine scandals in this affair: Political organizations are being allowed to masquerade as charities to avoid taxes and keep their donors secret, and the IRS has allowed them to do this for years."
"The IRS hasn't done nearly enough over the years to rein in the subversion of the tax law by political groups claiming a tax exemption that is not legally permitted for campaign activity. Nor has it enforced rules requiring that donors to those groups pay gift tax on their donations."
"Our lunatic campaign finance system is what turned the typical C4 from a volunteer fire department into a conduit of anonymous political cash." Then the crazed system allows donors to remain anonymous.
First Rove then, "By the same token, when the pro-Obama C4 Priorities USA disclosed that it had five anonymous donors, one of whom contributed $1.9 million, or 84% of the total, wouldn't it help an investigator to know who that person is?"
http://www.latimes.com/business/la-fi-hiltzik-20130514,0,1622097.column
Recall the IRS also "harassed" gay rights groups.
Bill Dithmer is right. In the statute it is clear that a group must be formed exclusively for public welfare focus to qualify under 501 (c) (4). That was true for a long time, but apparently in the late 1950s the IRS "interpreted" this statute, allowing some leeway about what constitutes public welfare and what activities can be done. For example, a public welfare group can operate a bingo game provided the revenue goes to the public welfare activities. Of course, once the IRS broadened the interpretation, the courts got involved with the result that 501 (c) (4) is now more of a catch-all category.
IRS could simply issue new guidance that re-reinterprets the category again, and goes back to the statutory language, but the likelihood that they would do that is near zero. Absent that, someone who is aggrieved and could prove standing could sue to do that.
Obviously the "interim" director of the IRS resigned. It has been attributed to a couple of rogue agents in Cincinnati and that there was an uncertainty of leadership out of DC.
Maybe John Thune can tell us why there isn't a permanent director of the IRS to give direction and stability to the organization? What was the appointees name?
Phil E. Buster?
John T...is this along the same lines as denying funding for extra security in Benghazi? You did vote against that as well. and wait for it...the Senate GOP just voted for more cuts. Good for you John.
Oh and John...tell us about the leak to the AP that was the impetus behind the AP phone taps. You already know the story and have known the story for some time now.
So whose lives were at a high threat level because of the leak? What damage did the AP story cause to national security? Wait...wasn't it you that voted down the legislation that would have prevented this in the first place?
Here's a hint. Highly sophisticated bombs headed to the US, a double agent and the US threatened...and a double agent outed and he and his family in mortal danger.
Good old John Thune...Party above country and state.
DB may be right: we aren't arguing about much here. Ken and I agree on the principles. Obviously, the IRS should not target only one side of the aisle. It should enforce its rules apolitically. The President agrees, as does the IRS leadership, and they are holding accountable the mistake-makers... who as Larry points out appear not to have done any actual harm to the "targeted" parties.
We all appear to agree that the Tea party groups are clearly political. No one has offered an example of a non-political Tea Party group purely interested in social welfare. Therein lies a key point: the IRS erred if it scrutinized only conservative groups. But it erred more greatly in granting those blatantly political groups non-profit status so they can launder Koch money under Citizens United. The right-wing media is squawking about the former smaller error, not the latter larger error.
I think it is also worth mentioning (because my wife reminded me) that all non-profits have taken a long time to get approval the last few years. It seems most of the apps take at least 9 months to approve for 501(c)(3) apps. It didn't used to take that long. And one simple mistake on the form can cause months of further delays.
Form 1023 is very long and easy to make a mistake on. A 501(c)(3) here in Aberdeen was finally approved after 22 months because of a problem with the original app.Then it was only approved because they hired my wife to work with the IRS and 'expedite' the changes.
More on Emerge America: the group looks a lot like ALEC.
http://www.nytimes.com/2011/07/21/business/advocacy-groups-denied-tax-exempt-status-are-named.html
It doesn't matter what kind of paint you splash on this story and other stories coming out this week it is kind of obvious that our president has some housekeeping to do.......
When Carter was President he was attacked nearly daily for being too hands-on and engrossed by trivia management. Expecting Obama to know everything about every agency is absurd. Most of us don't even know what is happening in every piddling agency here in South Dakota.
This is more of the GOP attempt to impeach for Obama being too Black.
More seriously, we need a new category of organization naming...something like "In-outs" where most of the "income" is spent on actual education, politics, religion, or whatever. Then allow them to deduct everything except executive, management salaries. Any actual contributions they turn into another kind of contribution would be deductible. Expenditures on monuments, ego-driven architecture, plush offices, would not be deductible by these organizations.
I'm confused about your argument Wiken. Are you stating that the high concentration of melanin in the President's skin somehow contributes to the incompetence of his underlings? I haven't heard any calls from the GOP to impeach the President. Are you suggesting that these scandals somehow involve Obama? Unless the President is somehow personally involved I think you're being paranoid.
The President is hitting back. WAY TO GO! The facts are on his side and in the long run, the Republicans will be more damaged by all of this.
Tell us about rehab, Bree.
Hello, Larry, I missed you. :)
I can tell you that detoxing from these mercury amalgams has been less than pleasant.
Cory hits on the money laundering aspect. Bingo, but it's even more sinister. The Koch outfit, Americans for Prosperity, was a big player in trying to convince and then providing advise and assistance to the informal and decentralized grassroots conservative groups to convert their local groups into 501 (c) (4) groups. It provided the Koch's and the other Ayn Randian corporatists a way to control the local Tea Party infrastructure through their money laundering operations. Many grassroots conservatives saw through this, and refused to become the Koch's pawns.
"Conservative nonprofits that received tax-exempt status since the beginning of 2010 and also filed election spending reports with the Federal Election Commission overwhelmed liberal groups in terms of money spent on politics, an analysis of Internal Revenue Service and FEC records shows."
https://www.opensecrets.org/news/2013/05/conservative-groups-granted-exemption-vastly-outspent-liberal.html
Politics is the determination of public policy. What issue is the government not involved with making decisions? The government justifies much of its spending as promotion of social welfare so I think a group with a purpose of improving society would have difficulty ignoring the political aspect. It is inevitable that government policy will have some importance on whatever issue of social good the group is focused on. Not only that but it is arguable that political parties themselves are organizations that developed as opposing sides worked to promote what they saw as a better society (the lining of one's pockets was not the powerful and corrupting draw then as it is today) It is a lost cause to stop the flow of money in politics. Every attempt just makes it worse. Campaign legislation should make it easier to run instead of making the barriers to entry higher. All they do is restrict political power to the elite and make it all less transparent.