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Thursday, February 20, 2014

The IRS Scandal, Day 287

IRS Logo 2New York Times editorial:  Change the Rules on Secret Money:

In November, when the Internal Revenue Service finally stirred itself to propose a modest crackdown on the abuse of the tax code by political groups, it was immediately attacked by tax-exempt nonprofit groups on the right. That wasn’t too surprising; secret donations from conservatives to these groups are the principal reason American politics is now dominated by those with huge bank accounts.

But now liberal tax-exempt groups are also raising their voice in protest over the I.R.S.’s plans, afraid that they will be caught in the same crackdown, and will be unable to engage in political activity. The best thing the I.R.S. can do is to ignore both sides and proceed swiftly ahead, making its proposed rules even stronger to squeeze the influence of money out of politics. ...

If anything, the I.R.S. rules, which should be sped up to have some effect on the November elections, ought to be stronger. The same prohibitions against political activity should also apply to business leagues like chambers of commerce, and to unions, both of which are organized under different sections of the tax code that allow concealment of donors. The rules should be far more explicit that no amount of political activity is acceptable for any group that refuses to disclose contributors.

Secret money has become the scourge of the political system and needs to be eliminated regardless of the inconvenience to nonprofit groups, whatever their ideology. Republicans have blocked Congress from dealing with the problem, so now it is up to the I.R.S. to do its job.

New York Sun editorial, Supremacy of the IRS:

Secret money has become the scourge of the political system and needs to be eliminated regardless of the inconvenience to nonprofit groups, whatever their ideology. Republicans have blocked Congress from dealing with the problem, so now it is up to the I.R.S. to do its job.

Those lines are from an editorial in the Times this morning calling for the Internal Revenue Service to start moving against not-for-profit groups that Congress has refused to regulate. They are one of the most astonishing combination of sentences we’ve seen in a while for the schematic way in which they illuminate the dictatorial mindset. Where in the world did the Times, once a paper of liberal progress, get possessed of the notion that the executive branch should do things that Congress decided it didn’t want to authorize it to do?  ...

[E]ventually the American institutions will make it clear that the refusal of the Congress to do something — raise taxes, lower taxes, declare war . . . whatever — doesn’t mean that it’s okay for the Internal Revenue Service to go ahead and do it anyhow.

Dave Camp (Chair, House Ways & Means Committee), Press Release:

Given that this is mostly conservative groups we are talking about, it isn’t shocking that The New York Times is joining the Obama Administration in attempting to silence these non-profits.  While the Times suggests all exempt organizations should be treated equally, the regulations they endorse conveniently leave liberal labor union leaders free to engage in whatever political activity they want.  Over the past few years, the IRS has systematically targeted conservative groups, threatened conservative donors with higher taxes and leaked confidential taxpayer information.  This has already had a chilling effect in the conservative community.  The last thing any newspaper should endorse is granting the IRS more power to suppress engagement in the democratic process and the exercise of First Amendment rights.

http://taxprof.typepad.com/taxprof_blog/2014/02/the-irs-scandal-17.html

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Comments

When both sides of an issue start to squeal, that usually means the proposed decision is correct. I strongly agree with the NYT editors that the Service should "ignore both sides and proceed swiftly ahead, making its proposed rules even stronger." But the IRS should not do so in order "to to squeeze the influence of money out of politics.” That is not the IRS’s job. The IRS should proceed with and strengthen the proposed rules in order to: 1) more closely implement the legislative intent behind 26 U.S.C. § 501(c)(4); 2) make clear to all players what the Service believes the law is; 3) aid in the efficient and cost-effective administration of the law as written by Congress; 4) remove the IRS, as much as possible, from the process of making determinations of what is or is not political activity; and 5) ensure the fair, uniform, and even-handed enforcement of §§ 501(c)(4) and 527.

Posted by: Publius Novus | Feb 20, 2014 6:58:24 AM

The NYT wants to suppress the voices of others.

Posted by: Elmer Stoup | Feb 20, 2014 1:24:22 PM

A cynic (tsk tsk) might suspect that liberal groups are only complaining after seeing polling for November & wondering if America will be Ready for Hillary.

Posted by: gs | Feb 20, 2014 2:24:08 PM