TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Saturday, March 25, 2017

The IRS Scandal, Day 1416:  The Root Problem Is The Law, Not The IRS

Hackney (2017)Philip Hackney (LSU) delivered the Norman A. Sugarman Memorial Lecture in Nonprofit Law at Case Western yesterday on Improving IRS Charity Oversight: Responsible Congressional Delegation, Responsive IRS Rulemaking:

Whether you think it fair or unfair, there is a large segment of American society who believes the IRS targeted conservative groups trying to obtain tax-exempt status from at least 2011-2013, leading to explosive accusations on the professional integrity and political bias of the agency.

In this lecture, Professor Hackney, James E. & Betty M. Phillips Associate Professor of Law, LSU Law Center, will clarify how this charge is unfair or at the least deeply misguided, explaining that root problem is not the alleged political litmus test by the IRS in considering tax exempt status in the charitable sector, but rather the law — both in its construction and implementation.

Congress has provided vague legal standards for the IRS to implement in the tax exempt arena, resulting in costly enforcement attempts that have undermined the public’s confidence that the laws are being enforced in a fair and impartial manner. To solve this issue, Congress should enact standards in this arena, but that the Treasury Department and the IRS ought to implement rules.

This lecture will consider the political, legal, and technical challenges to adopting such a rule-based regime for charity oversight.

See Philip Hackney, Charitable Organization Oversight: Rules v. Standards, 13 Pitt. Tax Rev. 83 (2015).

http://taxprof.typepad.com/taxprof_blog/2017/03/the-irs-scandal-day-1417the-root-problem-is-the-law-not-the-irs.html

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Comments

The problem is both Congress *and* the IRS. Congress passed a law that could be abused by partisans in an agency. The agency has Democratic partisans. The IRS is morally to blame, but Congress gave them the dagger. Of course, Congress was probably Democratic at the time and knew the agency employees are Democrats too, so maybe Congress is culpable that way.

Posted by: Eric Rasmusen | Mar 25, 2017 8:49:45 AM

Of course only a complete idiot could imagine that vague and poorly considered laws could ever possibly be used in a partisan fashion. /sarc
Evidently the good professor has never been in the miliary, where one learns rather quickly that "any order that can be misunderstood will be misunderstood and all orders can be misunderstood." Nor has he seemed to have heard of Godel's Incompleteness Theorem.

Posted by: JorgXMcKie | Mar 25, 2017 9:10:15 AM

The problem is how people in power abuse the law. Our system of government relies on an ethical leadership class and we haven't had that for at least the last eight years.

Posted by: wodun | Mar 25, 2017 9:49:55 PM

The professor’s thesis is a joke. Anyone who has followed the story, closely, for the past several YEARS would agree. The politicization isn’t limited to the IRS. Nearly every day there’s some story about some governmental agency (or a purported independent Congressional committee) playing politics. I wonder what vague laws the good professor would attribute those bad behaviors too? I don’t see how one can be a true public servant if they’re only interesting in serving half the country. And this is all coming from a pretty middle of the road kind of guy. A guy that isn’t a lawyer, but does enjoy reading about the law and legal matters. Unfortunately, a lot of the legal writings these days are nothing but biased political opinion.

Posted by: C.J. | Mar 25, 2017 11:18:10 PM

My first thought was he's angling for a job in the Chief Counsel's Office when he tires of academia.

Posted by: ruralcounsel | Mar 27, 2017 9:40:43 AM