Thin Gruel for a Scandal

The so-called IRS scandal is getting dumber by the minute. Jeffrey Toobin:

It’s important to review why the Tea Party groups were petitioning the I.R.S. anyway. They were seeking approval to operate under section 501(c)(4) of the Internal Revenue Code. This would require them to be “social welfare,” not political, operations. There are significant advantages to being a 501(c)(4). These groups don’t pay taxes; they don’t have to disclose their donors—unlike traditional political organizations, such as political-action committees. In return for the tax advantage and the secrecy, the 501(c)(4) organizations must refrain from traditional partisan political activity, like endorsing candidates. …

… Some people in the I.R.S. field office in Cincinnati took the names of certain groups—names that included the terms “Tea Party” and “patriot,” among others, which tend to signal conservatism—as signals that they might not be engaged in “social welfare” operations. Rather, the I.R.S. employees thought that these groups might be doing explicit politics—which would disqualify them for 501(c)(4) status, and set them aside for closer examination. This appears to have been a pretty reasonable assumption on the part of the I.R.S. employees: having “Tea Party” in your name is at least a slight clue about partisanship. When the inspector-general report becomes public, we’ll surely learn the identity of these organizations. How many will look like “social welfare” organizations—and how many will look like political activists looking for anonymity and tax breaks? My guess is a lot more of the latter than the former.

The real scandal, Toobin says, is that all kinds of political groups have gotten away with calling themselves “social welfare” organizations to get the tax break.

Particularly leading up to the 2012 elections, many conservative organizations, nominally 501(c)(4)s, were all but explicitly political in their work. For example, Americans for Prosperity, which was funded in part by the Koch Brothers, was an instrumental force in helping the Republicans hold the House of Representatives. In every meaningful sense, groups like Americans for Prosperity were operating as units of the Republican Party. Democrats organized similar operations, but on a much smaller scale. (They undoubtedly would have done more, but they lacked the Republican base for funding such efforts.)

Andy Kroll:

It began back in March 2010, when the tea party movement was all the rage. According to a leaked timeline (PDF) from a draft report by the Treasury inspector general for tax administration, IRS staffers began flagging applications from groups with politically themed names like “We the People” and “Take Back the Country.” Staffers also targeted groups whose names included the words “tea party” and “patriots.” Those flagged applications were then sent to specialists for a more rigorous review than is typical.

The IRS gave extra scrutiny to 298 groups applying for tax-exempt status, the Washington Post reported. Seventy-two of those groups had “tea party” in their title, 13 had “patriots,” and 11 had “9/12,” shorthand for the 9/12 movement started by conservative TV host Glenn Beck.

But IRS officials not only singled out tea party and liberty groups. They also looked for “political action type organizations involved in limiting/expanding government, educating on the Constitution and Bill of Rights, social economic reform/movement,” according to the leaked timeline. This included groups that planned to focus on government debt and spending, taxes, or those trying to “make America a better place to live.” In June 2011, Lerner reportedly became aware of what was going on and directed staffers to change to how they vetted nonprofit applications.

I don’t know how the IRS defines “social welfare,” but IMO promoting a political agenda, even if candidates are not endorsed, ain’t it.

Garance Franke-Ruta points out that members of Congress had been pushing the IRS to be more vigilant about allowing political organizations to claim tax-exempt status. Alex Seitz-Wald reminds us that when George W. Bush was president, the IRS went after Greenpeace, the NAACP and a liberal church. See also David Sirota, “Stop holding Democrats to a different standard.”

Right now the Daily Mail is bristling with outrage that the IRS allegedly asked one Teabagger group who was donating money and how the donations were being used. These seem to be logical questions to ask if you are trying to determine if the group is actually being used for political purposes. And so far there is no evidence that the President knew this was going on until last week.