The real IRS scandal

Various posts here have made the argument that the TIGTA report shouldn’t be taken as a definitive analysis of the ins and outs of the various issues related to the IRS’s examination of applications for 501(c)(4) status and its use of terms like “tea party” and “patriot” as a shortcut to identify groups that likely engage in way too much politicking to be entitled to C-4 status and nondisclosure of donors.  It does not appear to be quite so clear that the IRS actions were either “outrageous” (as so many hopping on the IRS “scandal” bandwagon suggest) or even “inappropriate”.  The right’s willingness to push this for all it is worth is typical of what passes for Congressional action these days–partisan politicking with a great dash of scandalmongering and a very little seasoning of legislative action intended to put the country in a better position.

Most of the media–which is generally right of center–has foamed at the mouth over the “scandal”, puffing it up to bigger and bigger proportions with each day.  Even Paul Caron, my highly respected colleague tax professor blogger over at Tax Prof, which provides not so much commentary but very many important and timely links to most issues of interest to tax professionals and tax academics around the country (as well as some highly personal items selected by Paul), has a running series that Paul has labeled  ”IRS Scandal Day ___” that links to most of the media coverage (a great deal of it right-wing) on the issue.  A great deal of that coverage (much of it from the right) involves super emphasis on the word “scandal” and not much emphasis on the underlying facts of the matter.

So kudos to the New York Times for a recent story on the issue that probes the question of politicking much more closely. Confessore & Luo, Groups Targeted by IRS Tested Rules on Politics, New York Times (May 26, 2013).  See also Barker & Elliot, 6 things you need to know about dark money groups, Salon.com (May 27, 2013).

Here are the Times writers’ descriptions of a few of the groups that applied for C-4 status and “cried foul” about the IRS’s selection of them for closer scrutiny for politicking:

• CVFC: “its biggest expenditure [the year it applied for C-4 status] was several thousand dollars in radio ads backing a Republican candidate for Congress”
• Wetumpka Tea Party, Alabama: ithe year it applied, it “sponsored training for a get-out-the-vote initiative dedicated to the ‘defeat of President Barack Obama’ “
• Ohio Liberty Coalition: its head “sent out e-mails to members about Mitt Romney campaign events and organized members to distribute Mr. Romney’s presidential campaign literature” Groups Targeted by IRS Tested Rules on Politics

 As noted in the report, “a close examination of these groups and others reveals an array of election activities that tax experts and former I.R.S. officials said would provide a legitimate basis for flagging them for closer review.”  That is what the IRS is supposed to do, suggesting that much of the scandalmongering that is going on is more about furthering the anti-tax/anti-government rightwing goal of “starving the beast” than it is about ensuring that the law is appropriately enforced.  The stakes are high, since the ability of politicking groups to use C-4 status permits high-powered donors and strategists to cloak their campaign activities behind the veneer of social welfare activity. 

Which is probably why of the right-wing bloviators are bloviating over this in Congress, calling for jail time for IRS employees, calling for a special prosecutor, insisting that this is a “scandall” along the lines of Watergate that goes to the heart of Obama’s presidency.  Hogwash, folks, pure and simple.  This so-called “scandal” is just another instance of right-wing obstructionism that is willing to sacrifice good government for maintaining or increasing political power.