IRS SCRUTINY OF 501(C)(4) APPLICANTS: A PLAGUE ON BOTH THEIR HOUSES!

6/25/13

Congressional Democrats yesterday released IRS documents that purportedly show that the special scrutiny the agency gave to applicants for 501(c)(4) status was not limited to conservative groups.  (See my 5/13/13 piece THE IRS, THE OBAMA ADMINISTRATION, AND THE CONSERVATIVES:  LESSONS FROM WHAT SEEMS LIKE YESTERDAY for background on this issue.) While terms like “patriot” and “tea party” were used to flag applications for closer looks, so was the term “progressive.”  It was also learned that groups pushing for one side or the other (or the other or the other, one supposes, but I digress) in the various Middle Eastern conflicts were flagged along with people arguing on either side of the health insurance debate.    

Perhaps assuming that these documents are correct is an inadvisable leap of faith.   They were released in the heat, or at least the intense afterglow, of a bitter partisan battle by a side desperately trying to extinguish an issue that is potentially very damaging to its leader and leaders.  However, those who, like yours truly, have a healthy disdain for both sides of the political preening and primping that masquerades as governance today are as willing to believe one side in any partisan argument as we are to believe the other...not much at all.   But there is no more reason to believe that the documents showing scrutiny of liberal groups were somehow fabricated than there is to believe that documents showing excessive scrutiny of conservative groups were similarly fabricated.  So let’s assume both the new and the old evidence is correct and that the IRS was “targeting” both liberal and conservative groups and groups involved in Middle Eastern politics.   If this is true, I say “Good.”  If I were given to the bouts of emotion that would lead someone to say something like “Hooray,” I would probably say that as well.

Why am I so happy that the IRS was “targeting” for more intense examination liberal and conservative groups applying for 501(c)(4) status?   Applications for such status were pouring into the IRS like water over Niagara Falls.   When the government decides to dispense tax breaks for anything, even the most anti-government groups get in line and push as closely to the front as possible.   Given the deluge of 501(c)(4) applications, the IRS had to winnow down the workload; it had to act efficiently.  I, for one, applaud the efforts of any agency to act efficiently and save the taxpayers some money.   The IRS was simply trying to cull the phonies, or the leaches or the barnacles, in the most efficient way possible. 

Everyone would like to have the taxpayers (i.e., you and I) finance his or her efforts to advance his or her agenda, especially if he can make advancing his or her agenda and opinions a full-time job.   Fulminating beats working for a living, and if one can have the government finance such a sinecure, one has found the career equivalent of valhalla.

There is, however, a larger point here.  As I said in my aforementioned 5/13/13 post,

The IRS doesn’t make the tax laws; the people we elect make the tax laws.  The IRS simply enforces the tax laws and is usually not as unreasonable and unyielding as some would have you believe, but that is grist for another mill.

The best solution to the problem with 501(c)(4) organizations is not to have an  under-resourced and overworked agency find clever ways to work through the pile of applications more efficiently and to winnow out the frauds who are only looking for a subsidy for doing what concerned citizens in a self-governing republic ought to do as part of their civic duty, i.e., advocate for clauses.  The best solution would be to eliminate the 501(c)(4) designation altogether.  Why in the world should one be entitled to a tax exemption if one is conducting an enterprise that is in the business of pushing political positions?   If I want to make my living advocating for causes, that’s my business.   But I am not entitled to have you as a taxpayer subsidize, though the tax code, the organization I have set up to engage in my advocacy.

Like many of my proposals, the elimination of 501(c)(4)s will probably never be achieved.  Our esteemed public servants in Congress and in the White House derive too much benefit from such organizations that serve an ancillary, or perhaps not so ancillary, purpose of keeping these poltroons in office.  Why would Congress eliminate an indirect subsidy to the lifelong larks they call careers, especially when beating up on those who administer the program can provide further avenues for fun, profit, and posturing for the popinjays in Washington?  

To ask Congress to eliminate 501(c)(4)s is nearly as quixotic as asking it to impose term limits.   But that doesn’t make the elimination of 501(c)(4)s and the imposition of term limits bad ideas.

THE IRS, THE OBAMA ADMINISTRATION, AND THE CONSERVATIVES: LESSONS FROM WHAT SEEMS LIKE YESTERDAY

5/13/13

The IRS’s apparent efforts to target for intense scrutiny conservative groups’ applications for 501(c)(4) status, which the IRS refers to as merely “absolutely inappropriate” and for which the White House disavows either knowledge or responsibility, are indeed troubling for the citizenry.  They also ought to be troubling for the Obama Administration if it has any historical perspective.

Let me start by perhaps belaboring the obvious.   No one should be, and certainly yours truly is not, criticizing the IRS for going over 501(c)(4) applications with the proverbial fine toothed comb.   There have been a lot of games played with the tax exempt 501(c)(4) designation, and the taxpayers have no business subsidizing the political efforts of anybody.  Neither you nor I should be forced to subsidize someone else’s political efforts.  In fact, it would be great if the prohibition on use of taxpayer funds to advance political causes were expanded and more rigorously enforced.  The problem in this instance arises because it appears and, indeed, the IRS has admitted, that it has not been even-handed in its scrutiny of  501(c)(4) applicants; it has singled out conservative groups for outright harassment while at least apparently giving more liberal groups something of a pass, at least on a relative basis.

The White House denies any knowledge of the IRS’s lack of even-handedness in this affair.  It claims that neither it, nor the IRS’s most senior leadership, knew about these shenanigans.  This essentially boils down to a Clintonesque “It’s a matter of what ‘senior leadership’ means,” but I digress.   Since it has become, at least in recent decades and probably long before then, a part of the politician’s job description to lie at least as easily as s/he tells the truth, one can be excused for not believing the Obama Administration in this instance, among others.  

Whether the Obama Administration knew of, or was behind, the IRS’s seeming jihad against the right, the Administration is clearly aware of appearances here (not good) and should have some historical perspective.

Those of us who are old enough to remember Watergate will recall that, almost until the very end, neither the break-in nor the cover-up was a subject of great interest to the average American; note that President Nixon was reelected in an unprecedented landslide in the very thick of at least the early stages of the scandal.   Of course, those who hated Nixon (Some people just couldn’t get over Helen Gahagan Douglas, others couldn’t get around Nixon’s ostentatious ersatz anti-Communism, still others just didn’t like the man, and often for good reason, but I digress.) thought Watergate was a very big deal, even in its incipient stages.  Those who loved Nixon (Some actually believed the man was a conservative, others admired Nixon’s formidable intellect, but few simply loved the man, but, again, I digress.) thought Watergate was a big deal because they saw the dust-up over Watergate as an assault on the foundations of American conservatism and/or American life.  But most people thought that the Watergate affair and the often hysterical reactions it elicited were just part of the games politician play.  People had other things to worry about, like the economy and Vietnam.

All that changed when, in the process of the Watergate investigations, we heard Nixon on the tapes say that he wanted to “use the IRS to get back on our enemies.”  Then Watergate hit home for every American.   Since every American feared, and still fears, largely unjustifiably, the IRS  (The IRS doesn’t make the tax laws; the people we elect make the tax laws.  The IRS simply enforces the tax laws and is usually not as unreasonable and unyielding as some would have you believe, but that is grist for another mill.), the fear that the dreaded letter from the IRS could arrive in the mail should s/he run afoul of the Administration in power sent chills up spines across the country.    Simply put, Watergate hit home when it became clear, in Nixon’s own voice, that the president was willing to use the seemingly omnipresent IRS to torment his enemies.   The rest is history.

If the Obama Administration is behind the IRS efforts to target conservative groups, Mr. Obama is in big trouble.  If the Obama Administration was, as it contends, ignorant of the IRS’s machinations and finds them reprehensible, it better make that clear…and quickly.   The IRS remains, rightly or wrongly, many people’s bogeyman, the closest thing we have in our country to the knock on the door on the middle of the night that occupies the nightmares of residents of totalitarian countries.