“The (c) Stands For Cha-Ching”: The IRS Went After Small Fish, But Let The Big Ones Get Away
“Please provide copies of all your current web pages, including your blog posts. Please provide copies of all your newsletters, bulletins, flyers or any other media or literature you have disseminated to your members or others. Please provide copies of stories and articles that have been published about you.”
That’s the Internal Revenue Service calling.
Or, more precisely, sending questionnaires. They went out to scores of Tea Party groups that were seeking tax-exempt status as “social welfare” organizations.
The organizations were targeted for special scrutiny because they had the words “Tea Party” or “Patriot” in their titles. Some questionnaires even requested the names of all donors and the amounts of each contribution.
It was a political abuse of power aimed, ironically, at groups who are pretending not to be political just to get a juicy tax break.
IRS supervisors were wrong to single out local Tea Parties when there’s a host of flagrant, big-time violators controlled by supporters of both major political parties.
The gimmick of choice is Section 501(c)(4) of the revenue code. Groups receiving that golden designation are allowed to collect unlimited contributions without paying taxes.
They’re not banned from political involvement, but by law they’re supposed to be “primarily engaged” in activities promoting “social welfare” and “the common good” — not partisan politics.
It’s a total farce.
Karl Rove’s Crossroads GPS spent untold millions of dollars on behalf of Republican candidates while attacking Democrats during the last election cycle. On the other side, Priorities USA spent a fortune helping Democratic candidates while trashing Republicans.
Both rabidly partisan organizations enjoy tax-exempt status under Section 501(c)(4). They claim to run strictly “issue” advertisements that aren’t really political, which is a hoot.
What’s not so hilarious is that the IRS sidestepped these heavyweight scammers to go after small-time outfits such as the Liberty Township Tea Party in Ohio.
Initially, the tax agency suggested that the crackdown was an isolated operation by agents in its Cincinnati office. However, in recent days it was revealed that a few IRS officials in Washington were aware of the targeting campaign in early 2010, and that similar inquiries of conservative groups had been conducted in other states.
A Treasury inspector general’s report issued last week criticized IRS managers who didn’t stop employees from focusing on conservative groups that were seeking 501(c)(4) designations.
President Obama said the actions described in the report “are intolerable and inexcusable.” He didn’t use the word “stupid,” but it applies.
There’s no sign that the president knew about the IRS targeting campaign, which began a few years ago while the agency was led by Douglas Shulman, an appointee of President George W. Bush.
Owing his job to a Republican, Shulman seems an unlikely instigator of an IRS campaign against conservative groups. No evidence has surfaced that he was aware of it.
After Shulman completed his term last November, IRS Deputy Commissioner Steven Miller became acting commissioner. Six months earlier, Miller had been briefed about some cases involving increased scrutiny of Tea Party-affiliated groups.
However, in letters to Congress, Miller, who’s been with the tax agency almost 25 years, didn’t mention the existence of the Tea Party cases. He resigned on Wednesday at Obama’s request.
The FBI and Justice Department are rightly investigating to see whether the IRS broke any laws by zeroing in on the tax-exempt applications of conservative groups.
Congress will hold long hearings, brimming with outrage.
No such pious fervor exists for investigating and exposing the fraudulent status of large groups like Crossroads GPS and Priorities USA, which collectively take in hundreds of millions of dollars.
They’re not “social welfare” organizations worthy of a tax exemption. They’re wealthy partisan advocacy machines with purely political missions — to promote their candidates, and to influence voters.
They are prized by both parties as safe and bottomless repositories for huge campaign donations, which is why you don’t see congressional leaders declaring war on the 501(c)(4) charade.
The c stands for “cha-ching.”
By: Carl Hiaasen, The National Memo, May 22, 2013
“Doing More With Less”: Outgoing IRS Chief Blames Underfunding For ‘Foolish’ Mistakes
Testifying in front of the House Ways and Means Committee, acting IRS commissioner Steve Miller apologized for his agency Friday.
“I want to apologize on behalf of the Internal Revenue Service for the mistakes that we made and the poor service that we provided,” Miller said. “The affected organizations and the American public deserve better.”
Agents at the IRS decided to take a shortcut in 2010 that has created an uproar, “centralizing” a number of factors that could raise suspicions that these fledgling non-profits might not be focused primarily on ”social welfare.” One of those factors — and here’s where they made their biggest mistake — was focusing on groups with “Tea Party” or “Patriot” in their names. Later they revised this policy to focus on “political action-type organizations involved in limiting/expanding government, educating on the Constitution and Bill of Rights, social economic reform movement,” according to the IRS Inspector General’s report.
The result? Some 300 groups were identified for extra scrutiny — among them, 70 were Tea Party groups. It’s not clear how many groups were turned down, yet it’s clear at least one Democratic group was.
Miller — who is stepping down from his position at the request of the administration — insisted that the actions were not intended to target conservatives.
“I think that what happened here was that foolish mistakes were made by people trying to be more efficient in their workload selection,” he said. “The listing described in the report, while intolerable, was a mistake, and not an act of partisanship.”
Under questioning by Rep. Paul Ryan (R-WI), Miller pointed out that though progressive groups were not identified by name, the IRS actually collected more information on left-leaning groups than Tea Party groups. The lifelong bureaucrat even rejected the notion that his agency was “targeting” anyone, insisting that was a pejorative term to describe the “listing” the agents were doing.
Republicans continually tied the scandal to attacks on the IRS in general, often citing audits by their supporters as proof of the agency’s overreach.
“The reality is this is not a personnel problem. This is a problem of the IRS being too large, too powerful, too intrusive and too abusive of honest, hardworking taxpayers,” said Rep. Dave Camp (R-MI).
But Miller had another explanation for why his agents pursued such questionable practices — funding. The commissioner asked the committee to increase funding to his agency, citing budget constraints as a major reason why agents sought shortcuts to identify questionable applications.
“In the last 10 years, the budget of the IRS, adjusted for the size of the population and inflation, has come down 17 percent,” according to tax expert David Cay Johnston.
Committee members offered several examples of groups being denied 401(c)(4) status or delayed endlessly. However, there’s no evidence that suggests Republican spending was hindered by this IRS’s shortcut.
“Of the 21 organizations that received rulings from the IRS after January 1, 2010, and filed FEC reports in 2010 or 2012, 13 were conservative,” writes OpenSecretsblog‘ Robert Maguire. ”They outspent the liberal groups in that category by a factor of nearly 34-to-1, the Center for Responsive Politics analysis shows.”
By: Jason Sattler, The National Memo, May 17, 2013
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 