Much like the media and right wing outcry over the attack on Benghazi really has nothing to do with Americans getting killed and everything to do with a political attack on the White House. So does the attack on the IRS, really have nothing to do with irregularities in IRS practice and everything to do with, the Right’s attempt to create another scandal and pull attention from their deliberate choices to block any meaningful legislation during the Obama Presidency.
The current attack on the IRS is probably the most phony, trumped up, dishonest, piece of craven political mendacity, I have seen in a long, long time. It begins with an IRS regulation that was born in 1959 and adjusted some years after by interested parties and continues through the most complete abrogation of responsibility by the media that it is possible to imagine. Both AP and NBC have disseminated lies that they knew were lies, but which they stated or published because they thought it would sell more soap. I have never been a big fan of the IRS but in this case they have done nothing more or less than what we pay them to do, get an honest count from all the tax filers, for all the taxpayers.
Let’s start with the established fact that anyone who claims a deduction on their tax return for a charitable donation must satisfy the IRS’ most basic question. “Did you receive any benefit from that donation?” The answer to anything that goes to any political cause, must be “yes,” because we get the most basic benefit from it, we get to have our man in office, thereby getting our own way.
So right away most of the organizations who have filed for 501©(4) designation are tax cheats because most of the money that went into these badly thought out categories has historically been allocated to political purposes, making it, according to the tax code, ineligible for tax exemption.
The 501© (4), the legislation that has caused all this hullabaloo originally stated that organizations applying for tax exempt status must “exclusively” function for the benefit of social welfare. This made sense but as with everything political, eventually money was spent in the right places and the IRS adjusted their language to change “exclusively” to “primarily” thereby leaving a crack in the armor of the ruling, a crack which was exploited to the max by primarily, the Right Wing organizations that are now squealing like stuck pigs.
In allowing the word change to be implemented in its code, the IRS ended up violating its own principles. Despite this the whole thing seemed to go along without much notice until the blighted 2011 Citizens United, Supreme Court decision that declared corporations to be people and which opened the floodgates to an enormous influx of donations by anonymous donors, the aim of which was to make a shambles of the entire democratic electoral process. Somehow, in all their headlines, our corporate media seems to have missed this point – along with a number others.
The result of the change in wording from “exclusively” to “primarily,” combined with the Citizens United decision created an avalanche of organizations that became eager to give money to the candidate of their choice once they found that they could also write it off. The IRS was inundated by applications.
Now don’t forget, the IRS job is to legally squeeze as much money out of the American public as it can. One of the ways they do it is by catching people who are trying to con the system. The current 501©(4)s are a classic tool for a legal tax scam; so just as they pull your return out of the pile when some debatable entry sets off an alarm, they began doing the same with 501©(4)s, big time. After all, there were over 97,000 applications in 2011. What would you do if you ran an IRS office and your mail boxes were being filled by applications for the perfect setup to cheat the system?
Out of this mess, came the big Right Wing complaint that IRS picked on applications that had Tea Party, conservative, Liberty, or other catch phrases in their titles. Yes, they probably did and there is a very good reason why. The Republicans, in their greed and hubris forgot one very important principle that allowed the Mafia to exist far longer and far more successfully than any organization of their type ought to. They didn’t go around bragging or shooting off their mouths, every time they robbed a bank or pulled off a big dope deal. They nodded quietly to each other and pocketed the cash. But the Republicans, couldn’t resist, boasting about how much they were collecting, bragging about how their tsunami of cash was going to bury the Democrats. They did the one thing hat you never want to do when you are dealing with an operation like the IRS. They called attention to themselves – big time.
They shouted so loud and so often that the IRS finally stopped and took a look. The last thing you ever want the IRS to do is take a look because then they have to justify the time and money spent in taking that look, but Karl Rove and the Koch brothers couldn’t resist telling the world about how much money they had managed to con out of the IRS and how they were going to use it to crush Obama. The Koch’s 501©(4) funneled $39 million into their unsuccessful campaign against Democrats while Rove’s Crossroads GPS spent even more than the Koch’s, which was evidenced by his deranged meltdown on national TV on election night.
Despite the right-wing whining, the actual targeted applications, which, besides the Tea Party terms, also contained words like, liberal and left-wing only turned up about 300 examinations out of that 97,000 applications, a pretty pathetic fishing expedition. But interestingly enough less than a third of them were conservative groups and none of those were denied status.
So what the hell, are they whining about, where the hell is the big scandal? Obviously it’s in the miniscule minds of incompetent reporters who haven’t done their homework, who haven’t fact checked their sources and who were too lazy to do anything they should have done in order to create accurate reportage.
That reportage should have started by checking the relevant law, which would have immediately shown that said law itself, because of its ambiguity, was the problem. Then the media should have checked to see if “The targeted vetting of right-wing groups,” was in fact what had happened. Since less than one third of the targeted groups were right-wing, this seems to also not be true, despite the wailings of people like Daryl Issa and his post McCarthy hatchet men on the congressional committee. These clowns managed to ask the IRS people nothing but leading questions. Why didn’t the media come up with these facts? Maybe because the reporters involved were too lazy or incompetent to do their jobs correctly or maybe because they were more interested in creating big scandals that would produce big ratings, then they were in getting at the truth
On May 29th, NBC news led with a completely false headline, ”IRS higher-ups, requested info on conservative groups, letters show.” In fact that’s not what happened. No letters showed that. The only letters that NBC had were 2 direct responses to the Cincinnati IRS office for requests for information to justify tax status. They were both form letters, millions of which go out every year.
How could this whole episode have been avoided? First by the IRS changing their descriptive wording back from “primarily,” which basically violates the spirit of the code to “exclusively” which accurately reflects it. People have been aware of the problems that 501©(4) can create for quite some time, it just got huge after 2011 and Citizens United. There have already been hearings on the problem and more were scheduled to happen in the near future so this wasn’t any big revelation. For years, lawyers who practice tax law have been begging for the IRS to clarify their vague guidelines.
In fact the IRS has been considerably more lenient with the 501©(4) applications, of either right or left, than they have been with individual charitable tax return items.
Every tax accountant will tell you that the IRS is pushing hard to grab every penny it can because they are being pushed hard by a government that desperately needs cash, cash that the right has been fighting against it getting, either by not allowing significant tax increases to the top 1% or by the elimination of corporate overseas tax havens. It’s fascinating how the Right is always making a stink about something that they were ultimately responsible for. Don’t forget that it was the conservative block in congress that fought against appropriating the money for more security for our embassies and outposts in foreign locations. Maybe if we’d had enough security at Benghazi the terrorists would never have attacked it.
The final nail in the coffin of the right-wing accusers and their fellow traveling incompetent reporters was the testimony of the head of the IRS Cincinnati office. This is a man who describes himself as a Conservative Republican, hardly the type to be taking illegal orders from the White House. He swore that the decision to investigate the applications was made by him; that the investigation included only a single application, and that said investigation was concluded, by forwarding his office’s conclusions to the IRS headquarters in D.C., not the other way around. This information was reported on national TV on Sunday morning, June 9th by the ranking member of the Senate committee investigating the IRS, Elijah Cummings D-MD who went on to excoriate committee chairman Daryl Issa R-CA for making unfounded accusations without benefit of facts.
William Boardman has asked a very interesting question about the IRS. If you hate government, do you hate it more when it does its due diligence? It looks like we do.