The IRS Non-Scandal

The real scandal at the IRS is electioneering groups getting tax-exempt status.

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In September 1802, journalist James Callender published the first of a series of articles detailing a long-term affair between President Thomas Jefferson and his household slave Sally Hemings. The story was a sensational revelation that definitively fit the definition of political scandal: The exposure of corruption, illegal or unethical practices, or a moral violation committed by public officials. Jefferson broke 19th century norms of anti-miscegenation by committing racial admixture.

The Internal Revenue Service's improper review of several tea party organizations' applications for 501(c)4 tax-exemption status is not a scandal. It's a SNAFU: a colloquial military term meaning situation normal, all (expletive)'d up. The controversy is the result of the normal state of affairs of a bloated bureaucracy: muddled decision-making by overzealous workers based on vague rules and organizational inertia.

The hailstorm of press and political rhetoric calling it a scandal does not serve the common good. It's a sensational, useful term, which attracts viewers and gives the GOP fodder to attack the president, but it bars a conversation on a much more important topic: fixing the ineffective policy that governs oft-abused tax-exemption designations.

[See a collection of editorial Cartoons on the IRS Scandal.]

The 501(c)(4) exemption requires organization to operate to further the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements) but not intervene in political campaigns. The 501(c)(3) designation bars organizations from attempting to directly or indirectly influence legislation as a substantial part of its activities and they may not participate in any campaign activity for or against political candidates.

The "social welfare" requirement is too vague. Should the 501(c)(4) exemption apply to organizations with known missions of getting candidates elected to office? No. The IRS should have asked them to reapply for a 527-organization exemption. 527s are political organizations that seek to influence the selection, nomination, election or appointment of an individual to a federal, state or local public office. 

IRS oversight of 501(c)(3) groups has been particularly problematic. Many of these groups skirt the rule and indirectly influence political campaigns. The anti-gay Family Research Council annually sponsors the "education portion" of the Values Voters Summit. That's a claim it likely makes to immunize itself from IRS scrutiny, but it's questionable given that the event is attended by numerous prominent Republicans politicians and candidates seeking to win the love of socially conservative voters.

[See a collection of political cartoons on Congress.]

Tony Perkins, the Council's president, frequently appears on major news networks commenting on a range of political issues outside "family values." He was featured prominently during the 2012 election, and this past April Perkins said "until the RNC and the other national Republican organizations grow a backbone and start defending core principles, don't send them a dime of your hard earned money. If you want to invest in the political process, and I encourage you to do so, give directly to candidates who reflect your values and organizations you trust."

Congress must solve this problem. It should produce substantive tax reform and not bog down numerous committees looking for witches and smoking guns. But then again, can we really expect legislators to change the very rules that benefit the special interests who support them? No. But we can expect more SNAFU.

  • Read Pat Garofalo: E.W. Jackson Proves the Tea Party Learned Nothing
  • Read Peter Fenn: IRS, AP and Benghazi Are Not Obama Scandals
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