Thursday, May 23, 2013

IRS "Scandal..."?

Watch your step by paynehollow
Watch your step, a photo by paynehollow on Flickr.

Far be it from me to defend the IRS, but as I've been listening to this news story, I have some questions...

No doubt you've all heard the story, "IRS employees targeted conservatives unjustly...," etc, wherein some in the IRS are accused of singling out and targeting for extra scrutiny conservative groups who've applied for non-profit status. My question has to do with the way this charge has been framed.

IS there any evidence that, in general, these IRS employees who've allegedly targeted "conservative" groups HAVE done so?

First, it appears clear that, if nothing else, we've sort of set up rules that make this job difficult for IRS employees. Some groups will apply for non-profit status, presumably so that they can do good for the community and some in the IRS are charged with the task of deciding if the application is legitimate.

The purpose of the non-profit status is to help those groups whose PRIMARY purpose to is promote the social welfare. Or, as it reads in the IRS code...

An organization is operated exclusively for the promotion of social welfare if it is primarily engaged in promoting the common good and general welfare of the people of the community.

The problem is, WHAT is the measure for "primarily engaged in promoting the common good..."? It appears to be left rather vague, making the job of this department of the IRS a difficult one. It would seem obvious that a group providing housing or job skills for the homeless or unemployed is primarily promoting the common good, but what of a more political organization that, say, is fighting against (or in favor of) abortion? Is that "primarily promoting the common good"? Who decides?

If nothing else, hopefully this "scandal" will raise attention to this problem and help lead to clarification.

But, back to my problem with this "scandal."

First, let me be clear: IF it turns out to be the case that this office of the IRS was populated by partisan Democrat hacks who deliberately targeted conservative groups because they were conservative, that is wrong, wrong, wrong and the problem should be addressed.

However, from all evidence that I've seen thus far, these employees (and their managers who knew about it) weren't generally targeting conservative groups at all, much less for political reasons.

Rather, at a time when many tea party-type groups were being formed and applying for non-profit status, these employees made the call to target specifically applications that were "tea party" or "patriot"-styled groups. And what was the reason for this?

Was it because these groups were primarily conservative and these were liberal partisan hacks? Then hold them accountable and clarify the rules.

On the other hand, if they did it because tea party groups have tended to be pretty virulently anti-gov't, anti-tax groups who have tended to be more political in nature, rather than "primarily" operating for "the common good," well, then, give these employees Gold Stars, they seemed to have been doing their job.

The tea party-types that I have read have tended to say things like "taxation = theft!" and "Big gov't is STEALING our money, let's put an end to it!"... that is, they come across as pretty politically opposed to taxation in general AND pretty political in nature and those qualities SHOULD raise a red flag for a tax collecting agency.

Consider: There is on the Left in the Peace Wing, a pretty small group that supports withholding a percentage of tax dollars - those dollars that would go to the "war machine." I'm not entirely unsympathetic to the notion, myself, although I'm not part of it.

Now, if groups who agreed with this idea started proliferating in the way that the tea partiers did in the last decade and they began organizing and applying en masse for non-profit status, then I would expect it to be not unreasonable for the IRS to "target" groups with "anti-war tax" in their title/mission statement.

By "targeting," they weren't simply dismissing the tea party groups - indeed, it appears most groups got their non-profit status. It just means that because these groups seemed to be questionably out to "primarily promote the common good" and more political in nature, that they looked at their applications a little more closely.

From all I've seen so far, this does not seem inappropriate to me, nor does it seem to violate any laws or any internal IRS rules.

Am I mistaken? If so, where specifically? What rules have they violated? What laws have they broken?

Do I support clarification of these "primarily for the promotion of the common good" rules so it's not left so vague? Sure, that would be a good thing. But let's not blame the IRS if their only sin is doing their job as best they can. If it turns out that these employees and managers did NOT "target" the tea party groups as part of a partisan attack, but just doing their jobs, I am hopeful that Congress and the Right-eous attackers will apologize for creating a "scandal" where none existed.


Alan said...

The blame actually lies with Congress, which has so politicized our tax code that it is a wonder anyone can make any sense of it whatsoever and making political decisions is now a necessary function of the IRS.

The other problem is that the IRS, in spite of these same problems in the past, has not clarified its procedures. When the IRS investigated All Saints Church (during the Bush administration *ahem*), did they not learn anything from that experience?

Craig said...

Alan is right in his assertion that the tax code is the basis of the problem. I haven't seen anything to definitely indicate that this was politically motivated and am assuming it was not until some evidence comes forward.

However, when IRS officials admit that what happened was wrong, it seems pretty reasonable that we could accept their assessment.

"Organizations that used words including “tea party” or “patriot” in their applications for tax-exempt status were flagged. Some were asked for their list of financial donors, a flagrant violation of IRS policy, Lois Lerner, an IRS division head, told the Associated Press."

“That was wrong. That was absolutely incorrect, it was insensitive and it was inappropriate,” she said. “That’s not how we go about selecting cases for further review. The IRS would like to apologize for that.”

Geoffrey Kruse-Safford said...

Let us not forget that Congress has slashed the budget for the IRS to the point that the investigatory arm is bare-bones. It takes a certain amount of personnel-hours to take an application for a particular tax-status and check things like incorporating documents and other things, as well as interviews, to decide whether or not to grant final approval. Especially in light of the Citizens United decision, which expanded the understanding of what activities for (c)(4) corporations were protected, there was a huge surge in applications at the same time (a) it was operating with a lower and lower budget and fewer and fewer people; (b) because there was no enabling legislation following Citizens United to guide the IRS through the mire, even the best intentioned folks were flying by the seat of their pants. When you have to make up policies and procedures without any guidance, there is bound to be stupidity.

No one, anywhere, denies any of this. I'm just curious where some of our friends think the real scandal lies. I suppose it's possible that Darrell Issa, who knew both about what was happening in Cincinnati and the IG investigation a year ago, sat on that knowledge out of deference to the investigation; certainly no one would suggest he did so to protect a Democratic President in an election year.

Alan said...

It is also the case that even if they had the necessary funding and even if their job wasn't inherently political, sometimes (I know this will shock people) some people are just really incompetent at their jobs.

That's a different thing altogether than a massive poltically-based conspiracy.