IRS Went After Small Fish, But Let The Big Ones Get Away
“Please provide copies of all your current web pages, including your blog posts. Please provide copies of all your newsletters, bulletins, flyers or any other media or literature you have disseminated to your members or others. Please provide copies of stories and articles that have been published about you.”
That’s the Internal Revenue Service calling.
Or, more precisely, sending questionnaires. They went out to scores of Tea Party groups that were seeking tax-exempt status as “social welfare” organizations.
The organizations were targeted for special scrutiny because they had the words “Tea Party” or “Patriot” in their titles. Some questionnaires even requested the names of all donors and the amounts of each contribution.
It was a political abuse of power aimed, ironically, at groups who are pretending not to be political just to get a juicy tax break.
IRS supervisors were wrong to single out local Tea Parties when there’s a host of flagrant, big-time violators controlled by supporters of both major political parties.
The gimmick of choice is Section 501(c)(4) of the revenue code. Groups receiving that golden designation are allowed to collect unlimited contributions without paying taxes.
They’re not banned from political involvement, but by law they’re supposed to be “primarily engaged” in activities promoting “social welfare” and “the common good” — not partisan politics.
It’s a total farce.
Karl Rove’s Crossroads GPS spent untold millions of dollars on behalf of Republican candidates while attacking Democrats during the last election cycle. On the other side, Priorities USA spent a fortune helping Democratic candidates while trashing Republicans.
Both rabidly partisan organizations enjoy tax-exempt status under Section 501(c)(4). They claim to run strictly “issue” advertisements that aren’t really political, which is a hoot.
What’s not so hilarious is that the IRS sidestepped these heavyweight scammers to go after small-time outfits such as the Liberty Township Tea Party in Ohio.
Initially, the tax agency suggested that the crackdown was an isolated operation by agents in its Cincinnati office. However, in recent days it was revealed that a few IRS officials in Washington were aware of the targeting campaign in early 2010, and that similar inquiries of conservative groups had been conducted in other states.
A Treasury inspector general’s report issued last week criticized IRS managers who didn’t stop employees from focusing on conservative groups that were seeking 501(c)(4) designations.
President Obama said the actions described in the report “are intolerable and inexcusable.” He didn’t use the word “stupid,” but it applies.
There’s no sign that the president knew about the IRS targeting campaign, which began a few years ago while the agency was led by Douglas Shulman, an appointee of President George W. Bush.
Owing his job to a Republican, Shulman seems an unlikely instigator of an IRS campaign against conservative groups. No evidence has surfaced that he was aware of it.
After Shulman completed his term last November, IRS Deputy Commissioner Steven Miller became acting commissioner. Six months earlier, Miller had been briefed about some cases involving increased scrutiny of Tea Party-affiliated groups.
However, in letters to Congress, Miller, who’s been with the tax agency almost 25 years, didn’t mention the existence of the Tea Party cases. He resigned on Wednesday at Obama’s request.
The FBI and Justice Department are rightly investigating to see whether the IRS broke any laws by zeroing in on the tax-exempt applications of conservative groups.
Congress will hold long hearings, brimming with outrage.
No such pious fervor exists for investigating and exposing the fraudulent status of large groups like Crossroads GPS and Priorities USA, which collectively take in hundreds of millions of dollars.
They’re not “social welfare” organizations worthy of a tax exemption. They’re wealthy partisan advocacy machines with purely political missions — to promote their candidates, and to influence voters.
They are prized by both parties as safe and bottomless repositories for huge campaign donations, which is why you don’t see congressional leaders declaring war on the 501(c)(4) charade.
The c stands for “cha-ching.”
(Carl Hiaasen is a columnist for the Miami Herald. Readers may write to him at: 1 Herald Plaza, Miami, Fla., 33132.)
AP Photo/Tony Gutierrez, File