IRS-gate: Picking on the little guys

By The Sunlight Foundation

As often happens, Washington’s big story of the moment–that the Internal Revenue Service targeted dark money groups that filed for nonprofit status if they had the words “tea party” or “patriot” in their monikers–misses the big point.

Of course the IRS should never be used for political purposes; it should apologize for giving an extra scrutiny to groups requesting non-profit status if they appeared to be Tea Party affiliates. Our question is: Why did they pick on the little guys when they’ve got so many larger, more legitimate targets for scrutiny?

The American Center for Law and Justice, a conservative organization that represents 27 groups that received the extra scrutiny, posted some of the requests for additional information its clients received. IRS workers asked for detailed information on the groups’ boards of directors, planned and previous activities, ties to political candidates, vendors and so on.

But while the feds were giving the third degree to some upstart political fundraising groups that applied for 501(c)4 nonprofit status, a huge ecosystem of big players was pumping millions into the 2012 election – using the same section of the tax code, which stipulates that must spend more than half their money on non-political activities. Take a look at the list compiled by Sunlight’s Follow the Unlimited Money tracker at the biggest spending nonprofits (note that not all of them are (c)4s–some are trade associations like the U.S. Chamber of Commerce and Americans for Job Security). There’s not a single group with the words “tea party” in the name, and only one group, mostly funded by labor unions, has the word “patriot” in it–the Patriot Majority USA.

If the Internal Revenue Service wanted to be vigilant about groups potentially abusing their 501(c)4 status, they might have paid closer attention to Crossroads Grassroots Policy Strategies, or shine a light on Organizing for Action, the 501(c)4 set up earlier this year by officials of President Barack Obama’s reelection campaign to maintain his mailing list and influence policy. Organizing for Action promised donors who gave or raised $500,000 access to the president.

As with the audits of individual income tax returns, 87 percent of which are directed at filers with $100,000 or less in income, the IRS has once again put more time going after the little people than the Leona Helmsleys.

The Sunlight Foundation is a non-profit, nonpartisan organization that uses the power of the Internet to catalyze greater government openness and transparency, and provides new tools and resources for media and citizens, alike.