TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

A Member of the Law Professor Blogs Network

Sunday, June 29, 2014

The IRS Scandal, Day 416

IRS Logo 2Tax Analysts Blog:  The IRS Has Been Set Up, by Christopher Bergin:

The IRS’s job is to collect taxes, and historically it’s been pretty darn good at that. But over the years, Congress has tasked the Service with many things that really have nothing to do with collecting revenue. ... So let’s have the IRS administer the healthcare system. Anybody want to hazard a guess about how that’ll go? ...

And that brings us back to section 501(c)(4), through which the IRS has been charged with regulating a part of the political fundraising process. This involves making precise calculations of the amount of political activity engaged in by social welfare organizations seeking tax-exempt status. How is the IRS supposed to determine that? And now added to this paradigm, apparently, is the political pressure being put on the IRS. So if a Democrat is in the White House, all conservative organizations are bad. And when a Republican is in the White House, I’m betting the heat will be on the IRS to determine that all liberal organizations are bad. Is that how this works?

I don’t know if the IRS has been politicized. Until recently that possibility would have been unthinkable. But the potential of the 501(c)(4) rules to be a setup for the politicization of the IRS is enormous. You simply can’t have the tax collector refereeing the people who provide it with its budget. It’s understandable – although, I think, shortsighted – that the Republicans want to starve the beast for its lack of transparency in the investigation of how it handled social welfare organizations. But the beast (and I don’t believe the IRS is a beast) is in real trouble now.

Section 501(c)(4) should be repealed immediately, and the IRS should be tasked with doing its job: collecting taxes. What are the odds that politicians will do that? Nil, because they’re the only ones benefiting from this mess.

But we are where we are, and I am truly worried. If this agency has been politically corrupted, it will not be able to function. And that leaves us with a question. Who's going to collect the revenue? 

http://taxprof.typepad.com/taxprof_blog/2014/06/strong-6.html

IRS News, IRS Scandal, Tax | Permalink

Comments

Thank you Mr. Bergin. That was much needed and succinctly written. I agree with you 100% that the number one priority at this point in the episode should be the immediate and complete repeal of sec. 501(c)(4). Unfortunately, you are correct--it will not happen.

Posted by: Publius Novus | Jun 29, 2014 7:36:44 AM