TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, September 18, 2013

Hudson Institute Hosts Program Today on IRS + 501(c)(4) = SOS?

HudsonThe Hudson Institute hosts a program today on IRS + 501(c)(4) = SOS?:

“So I guess my bottom line here is that we at the IRS should apologize for that, it was not intentional, and as soon as we found out what was going on, we took steps to make it better and I don’t expect that to reoccur.” So stated director of the IRS Exempt Organizations division Lois Lerner last May 10, as she explained to a meeting of the American Bar Association that her employees had singled out for extended examination scores of applicants for 501(c)(4) status that “used names like Tea Party or Patriots and they selected cases simply because the applications had those names in the title.”

“That was wrong, that was absolutely incorrect, insensitive, and inappropriate,” she concluded.

If she had hoped that her admission would enable the IRS to “get out in front” of negative publicity, she must have been disappointed, because within days, and after a very critical review of IRS practices by its own Inspector General, the IRS was embroiled in a controversy that has yet to subside.

Was this merely a case of bureaucratic bungling, as Lerner suggested? Or was the IRS deliberately targeting groups known to be unfriendly to the Obama Administration, as others have argued? Does this episode point to larger, institutional deficiencies that require substantial revisions in the way we understand the 501(c)(4) designation, and the limits on political activity in which such organizations may engage?

These and other questions will be addressed on September 18th by our expert panel, including John Pomeranz of Harmon, Curran, Spielberg & Eisenberg and a key participant in the Bright Lines project; Cleta Mitchell, partner at Foley & Lardner, who has filed a lawsuit in federal court challenging the IRS actions; and Marcus Owens of Caplin & Drysdale and former director of the IRS Exempt Organizations Division. Hudson Institute's William Schambra will moderate the discussion. ...

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