Sherlock
Holmes, seated in a plush velvet chair, smoking his pipe, turns to Dr. Watson
and explains the case. "The
question no one but I can answer, Watson, is why the Internal Revenue Service
workers in Cincinnati targeted certain groups to be investigated? It is roiling all of Washington, but
the answer is so elementary."
While the current I.R.S. scandal seems to be a mystery to some, and a
cause celeb for others, what happened is simple to explain and even simpler to
understand. Between 2010-2012,
non-profit groups wishing to qualify for a 501 (c)(4) designation went from
1,200 applications to 3,400. A
501(c)(4) designation is a marvelous creature. It allows a non-profit organization to use
"unlimited" amounts of money on issue ads, advocacy activities aimed
at swaying voters on a specific issue or series of issues. As long as this political activity is
not the "primary" purpose of its actions, the organization can
independently target any race or any issue with no restrictions on how much
someone can donate and no limits on how much is spent. The real gold of a 501(c)(4) is they
can accept unlimited donations, but can keep their donors identities secret. Do you see it yet? Holmes does.
Ever since the Supreme Court ruled in 2010, the Citizens United case,
that there are no limits on political donations. Super PACS rose up all over the land. Karl Rove's Super PAC raised and spent
over $300 million in 2012.
However, Super PACS have to release their list of donors. Regressive billionaires like the Koch
brothers, Sheldon Adelson, Foster Freiss and others didn't like the
publicity. They want to push their
regressive agenda in secret and so they let it be known they would now give to
(c)(4)'s in the future.
In 2010, the group responsible for regulating (c)(4)'s inside the I.R.S.
was in shambles. Congress had not
spelt out the definition of what constitutes "primary political
engagement". Suspicions were
raised that these new (c)(4) groups were really Super PACS in different wrapping
and were subverting the law.
Without a clear definition of what constitutes "primary political
activity", I.R.S. workers were left to come up with ways to try and see if
these applications were for genuine "social welfare" objectives. (the reason for the existence of
(c)(4)'s to begin with) Could
these applications be part of a stealth campaign to launder political donations
and engage in political activity all without any scrutiny? The workers made a poor, but
understandable, decision...if you had Tea Party, good government, Patriot or
other terms in your organization's name, it was highly likely you were far more
interested in politics than "social welfare". (in fact, can you think of a single
project sponsored by one of these targeted groups which promoted genuine social
welfare?) They were wrong to take
such a short cut, but it's easy to see why they did it.
Yes, it's a scandal some groups were targeted for extra scrutiny while
others were not. Yes, all
applications for (c)(4) status should be treated equally. However, the I.R.S. is under staffed,
due to Congress and the regressives, and trying to grapple with a law that
screams for subjectivity in how it is administered. It is under pressure to ferret out the crooks and liars (the
name Rove keeps coming to mind) while processing applications in a timely
manner. It is an impossible task.
The bigger question is why (c)(4)'s even exist? Why should you and I subsidize these
groups with our taxes? We do not
benefit in any way. Regressives
constantly scream for a new simpler tax code. Ok, get rid of (c)(4)'s. End the charade.
Eliminate the tax deduction for donating to those groups. Even better, require total transparency
by mandating all such organizations publish a list of their donors. If you do that, their usefulness to the
1% ceases to exist. If donations
aren't secret, they might as well give to a Super PAC.
Oh, BTW, the hypocrisy of regressives knows no bounds. When the I.R.S. audited and
investigated the NAACP in 2004, after its president criticized President Bush
for being the first president since Herbert Hoover to fail to address the
organization, no regressive voice was raised in protest. When pressure from Exxon and other
groups resulted in the targeting of Greenpeace by the I.R.S. in 2006,
regressives were silent as church mice.
In 2004, the pastor of All Saints Episcopal Church in Pasadena made an
anti-Bush sermon the Sunday before the presidential election. The I.R.S. threatened to revoke its tax-exempt
status. At the same time,
regressive churches all over the nation were handing out voting guides,
congressional report cards and advocating for regressive candidates from the
pulpit and the silence from the I.R.S. was deafening. The crocodile tears now being shed over the shabby treatment
of Tea Party and other groups is embarrassing.
It's simple. It's
elementary. Pass a law so all political
donations are reported...total transparency. Have someone other than the I.R.S. enforce it. End the 501(c)(4) forever or define the
terms of its use more clearly.
The I.R.S. workers may have broken the law, but Congress and the 1% are
at least accessories to the crime.
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