New Report Debunks IRS 'Scandal'

Conservative AND Liberal Groups Got Same Scrutiny

Posted by Dale Eisman on October 6, 2017

Remember how conservative groups and commentators put their outrage into overdrive when the Internal Revenue Service acknowledged in 2013 that it gave extra scrutiny to tax exemption applications from non-profit groups with names suggesting they might be part of the Tea Party movement?

IRS “harassment” of conservatives became an article of faith among many on the right, who argued that the Obama administration was trying to use the IRS to silence some of its most vocal and persistent critics. The “scandal” led to calls for the impeachment of IRS Commissioner John Koskinen and criminal prosecution of Lois Lerner, the IRS official directly responsible for reviewing the tax exemption applications.

Well never mind about all that.

It turns out that liberal and conservative groups got pretty much the same treatment – slow - from the tax man during the Obama years. A Treasury Department Inspector General’s report released Thursday concluded that as they took a close look at Tea Party groups, the IRS’s reviewers also were giving extra attention to applications from groups with words like “occupy,” “progressive,” and “green energy” in their names.

“The Obama administration was often accused of Nixonian wrongdoing,” former Obama spokesman Eric Schultz, told The Washington Post. “At some point, I lost track of how many Watergates we had… This report substantiates our argument that our White House did not politicize the IRS, but those allegations, A1 material at the time, have lived online for four years and now that the public has moved on, they’re proven false.”

As Common Cause has asserted repeatedly since the first questions were raised about the IRS’s treatment of political non-profit groups, the real scandal is the agency’s failure to enforce the law. Tax exemption applications from politically active organizations – on the left or the right – should be getting more scrutiny, not less, and those found to be devoting more than an insubstantial amount of their resources to political activity should not be exempt at all.

The groups involved are the conduits for the hundreds of millions of dollars in “dark money” that has flowed into our elections in recent years. By calling themselves “social welfare” organizations and claiming the tax exemption that goes with that designation, they not only avoid paying federal tax, they get to conceal the identities of their donors. That’s the real reason the exemption is so important to them.

No matter that the law says social welfare groups are supposed to abstain from partisan politics; the IRS has interpreted the statute to grant exemptions so long as less than half of their spending is devoted to political activity. When you’re collecting six- and seven-figure checks, that gives you a lot of freedom to put lot of dark money into our elections.

The rules “are so vague and wrongly-drawn that political operatives have exploited them to establish phony social welfare groups and pump hundreds of millions of dollars from secret sources into our elections,” Common Cause’s Stephen Spaulding observed nearly two years ago.

He was right. And two-plus years later, the IRS, Congress, and the new Trump administration are doing nothing about it.


Office: Common Cause National

Issues: Money in Politics

Tags: Fighting Big Money, Disclosure

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