Paul L. Caron

Monday, January 1, 2018

The IRS Scandal, Day 1698: Fallout From Tea Party Targeting Allegations Has Neutered IRS Oversight Of Nonprofits

IRS Logo 2Washington Post editorial, Scandal Has Overwhelmed the IRS:

Conservatives who long sought to restrain the Internal Revenue Service have managed to throw a wrench into an IRS division that is supposed to regulate tax-exempt nonprofits and charities, just at a time when these groups are becoming more partisan and complex.

In a Dec. 18 article in The Post, reporter Robert O’Harrow Jr. offered a disturbing picture of the besieged Exempt Organizations division of the IRS, which regulates charities and nonprofits such as those allowed under sections 501(c)(3) and 501(c)(4) of the tax code. The former may not directly or indirectly support a political candidate, but they are allowed to participate in educational debates about the issues; the latter are social-welfare groups that can be involved in politics only so long as it is not their primary activity. The number of applications from new charities has exploded in recent years, and the law is a bit of a gray zone — vaguely written and hard to enforce.

In recent years, overwhelmed by applications, the division and its then-leader, Lois Lerner, fell into the crosshairs of the conservative tea party movement for the slow pace of approvals of tea party groups, which they claimed was due to a conspiracy by the Obama administration to target them. Subsequent investigations found mismanagement — the IRS was taking shortcuts and using keywords to deal with the mountain of applications — but not deliberate targeting.

Still, the charges took a toll. The division seems to have lost its will to scrutinize charities. According to Mr. O’Harrow, last year the division rejected just 37 of the 79,582 applications on which it made a final determination. He reported that charities have now begun to recognize they face little or no chance of examination or sanction. The division’s budget has declined from a peak of $102 million in 2011 to $82 million last year. The number of division employees has fallen from 889 to 642. ...

There is more than enough blame to go around in this tale. The conservative groups, their allies in Congress and the IRS itself all bear responsibility. It is clear what the result will be. Voters will have less and less knowledge of who is paying for political activity in their democracy, even as many politicians hypocritically claim to favor transparency.

(Hat Tip: Bill Turnier.)

IRS News, IRS Scandal, Tax | Permalink


Apparently, all the non-profit division does is harass political opponents, so crippling it is a good idea.

Posted by: Eric Rasmusen | Jan 2, 2018 9:10:14 AM

I'm afraid that the IRS proved to us that it is just as filled with lies, deceit and dishonesty as the Justice Department, the FBI Crime Labs, and the lying deceitful dishonest untruthful FBI. When they only ever injure one side they can be viewed as partisan and their findings no matter rise to the level of believable. They need to clean house and they need to fire their management, all of them.

Posted by: Vercintorix | Jan 1, 2018 10:02:30 PM

Oh please. The IRS behaved abominably, perhaps even criminally. No way to know, since the hard drives were so conveniently destroyed. They need to stay out of politics. If they can't, they're not fit to oversee non-profits.

Posted by: kishke | Jan 1, 2018 8:59:57 PM

According to the Post: “Subsequent investigations found mismanagement — the IRS was taking shortcuts and using keywords to deal with the mountain of applications — but not deliberate targeting.”

Well bless their hearts.

Posted by: Ming the Merciless Siamese Cat | Jan 1, 2018 7:39:22 PM

Well, had it not been for Obama and Lois Lerner, it wouldn't be this way. There is little doubt the idea of putting the squash on tea party groups originated in the White House with the tacit approval of Congressional Leadership (both Democrat and Republican). How do I know that. Because we've never seen Lerner's e-mail and no one in Congress seems to be really excited about it.

Posted by: bflat879 | Jan 1, 2018 5:37:46 PM

And don't forget that Lerner refused to answer questions because doing so would constitute testimony which would incriminate her. That is, Lois Lerner claimed that she apparently violated the law. I don't think "mismanagement" is a crime.

Posted by: brad | Jan 1, 2018 4:35:55 PM

Why haven't the Republicans given Lois Lerner immunity and dragged her in front of Congress to find out who ordered the targeting of conservatives?

Posted by: Mike Smith | Jan 1, 2018 3:51:15 PM

Thank you, Professor, for providing my first laugh-out-loud of the New Year. Not targeting - no, it was mismanagement, short cuts, and misused "key" words. I guess the IRS issued an apology and payed several million dollars in settlements for short cuts.

Is the Washington Post editorial board consciously lying? Delusional? Or do they feel that the facts behind the IRS scandal has been so completely hidden that they can say anything and ignorant readers will accept their claims. Professor Caron, you have done great things in keeping this storyalive.

Posted by: aircav65 | Jan 1, 2018 5:31:19 AM

No justice, no peace. The miscreants at the IRS have not been brought to justice. Lerner lives high on a multimillion dollar pension while having obstructed justice. The Post should blame the evil Democrats not the GOP

Posted by: wesmouch | Jan 1, 2018 2:50:57 AM