[Vision2020] The Real I.R.S. Scandal

[Art Deco]

  [image: The New York Times] <http://www.nytimes.com/>

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May 15, 2013
The Real I.R.S. Scandal By SHEILA KRUMHOLZ and ROBERT WEINBERGER

WASHINGTON

NEWS that employees at the Internal Revenue Service targeted groups with
“Tea Party” or “patriot” in their name for special scrutiny has raised
pious alarms among some lawmakers and editorial writers.

Yes, the I.R.S. may have been worse than clumsy in considering an avalanche
of applications for nonprofit status under the tax code, and that deserves
scrutiny whether or not the agency’s employees were spurred by partisan
motives. After all, some of these “tea party” groups are most likely not
innocent nonprofit organizations devoted to the cultural significance of
hot beverages — or to other, more civic, virtues. Rather, they and others
are groups that may be illegally spending a majority of their resources on
political activity while manipulating the tax code to hide their donors and
evade taxes (the unwritten
rule<http://www.npr.org/2013/05/13/183700362/irs-under-fire-for-targeting-conservative-groups>being
that no more than 49 percent of a group’s resources can be used for
political purposes).

The near vertical ascent in political spending by these “dark money” groups
was prompted by the Supreme Court’s 2010 decision in the Citizens United
case, among others, freeing them to be more active in this realm.

And it’s a bipartisan scandal, though it’s hard to tell that judging by the
names some groups have adopted — as the I.R.S. should know. Can you tell
which of these lean left and which ones right? Patriot Majority USA,
Crossroads GPS, American Future Fund and the Citizens for Strength and
Security Fund. (Nos. 1 and 4 are liberal, 2 and 3 are conservative.)

The majority of the organizations that appear to be most politically active
— from groups that run their own ads, like American Action Network and
Americans for Prosperity, to the mysterious Center to Protect Patient
Rights, which distributes money to other political groups — already have
exempt status. There’s little evidence that the I.R.S. is looking into
these groups.

The latest news will make that job more difficult. It’s unfortunate and
unacceptable that these groups may have received more scrutiny and
suspicion than they deserved — the I.R.S. reportedly even asked what books
their leaders were reading.

But even more regrettable is the long-term damage to the credibility of the
I.R.S. as an impartial arbiter of whether organizations merit tax-exempt
status. This will be difficult to undo, particularly because of the secrecy
required for the agency to effectively examine organizations without
generating doubts about them, as well as to prevent other organizations
from coming up with strategies to evade scrutiny in the future.

Indeed, the latest revelations are not the first to cause pushback by
Congressional conservatives. In 2011, tax authorities considered applying
the gift tax to large contributions to 501(c)(4) groups, and they sent
letters to a handful of big donors informing them they may be taxed. The
agency received a swift and forceful
response<http://www.finance.senate.gov/newsroom/ranking/release/?id=ec29441e-aefd-4192-a628-d96966cf4231>from
the Republican senators Orrin G. Hatch of Utah, John Kyl of Arizona
and others demanding to know whether the I.R.S. was acting on the basis of
partisanship.

The agency folded like wet cardboard: the deputy commissioner took the
extraordinary step of ending the audits in progress. (That official, who
has been the acting head of the agency, was fired yesterday by the
president.)

Now Republicans like Senator Pat Toomey of Pennsylvania are saying the
search criteria used by the I.R.S. are “akin to an enemies list,” like the
one kept by President Richard M. Nixon.

Mr. Toomey, it should be noted, has personal experience with these groups:
in his last race, in 2010, he benefited from the outside spending of
conservative 501(c)(4) groups like the Republican Jewish Coalition and
Crossroads GPS, founded by Karl Rove. In fact, such groups spent $17.6
million on his behalf, while liberal counterparts spent $12.8 million
helping his Democratic opponent, Joe Sestak.

With the surge of dark money into politics, we need to ensure that the
I.R.S. is capable of rigorously enforcing the law in a nonpartisan, but
also more effective, way. While we focus on the rickety raft of minor Tea
Party groups targeted by the I.R.S., there is an entire fleet of big
spenders that are operating with apparent impunity.

Congress has already announced hearings and investigations, and the
service’s leadership will be grilled, as it should be. But it would be a
travesty if the misdeeds here undermined the important work that must now
be done to foster greater transparency, and to bolster confidence that the
I.R.S. is in fact scrutinizing politically active groups across the board,
regardless of their ideological bent.

Citizens need to rest assured that the integrity of our political system is
intact. But achieving that assurance will take more than a tempest in a
teapot.

Sheila Krumholz is the executive director of the Center for Responsive
Politics <http://www.opensecrets.org/>, where Robert Weinberger is the
chairman of the board.


-- 
Art Deco (Wayne A. Fox)
art.deco.studios at gmail.com
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