Somewhat ironically, during the 2012 campaign season the IRS decided to flag for review applications for tax-exempt status from groups whose names included “Tea Party” or “patriots.” Not surprisingly, this has created some furor. While an IRS spokesperson has claimed that the extra attention was not at the behest of the Obama administration and an apology has been issued, this matter certain deserves greater scrutiny.
As should come as no surprise, Republicans (and some Democrats) have already called for a congressional investigation and a review by the administration.
The obvious point of concern is that the IRS was involved in partisan politics. After all, groups with “Tea Party” and “patriot” in their names would generally tend to be anti-Obama (if not pro-Romney) and if they were singled out for special review, this would certainly suggest partisan motivation. What would be more damning would, of course, be evidence that the IRS denied tax-exempt status unfairly to groups with such names. As it stands, the IRS claims that none of the groups in question were rejected (at least not yet).
While such flagging for review would seem to be partisan, perhaps the motivation was not partisan. An alternative explanation is that the IRS folks involved in this were concerned that such groups might be more likely to have “problematic” applications because of the Tea Party’s view of taxes (that they are taxed enough already) and hence flagged them for more careful review on that basis. While such a motivation (if it actually existed) might be understandable, it would still be problematic in that it would still have the effect of targeting on partisan lines and the IRS should avoid even the appearance of being partisan.
It might also be the case that folks involved were concerned that such groups would be more likely to be involved in partisan politics, which is supposed to deny them tax-exempt status. However, if they only flagged “Tea Party” and “patriots” rather than any phrases or words that would be indicative of partisan politics, then they could be justly accused of focusing on conservative groups. This would, obviously enough, be unjust.
The IRS also endeavored to play the usual “rogue employee” gambit. In this case, the claim is that the targeting was the work of a few lower level revenue agents in Cincinnati rather than as a general policy taken by the IRS. If this can be proven, there would still be a problem-but obviously not as bad as having the IRS engaged in such behavior as a matter of general policy. If it can be proven that this matter reaches up the chain of command, it would be rather bad for the IRS and also for the Obama administration.
On a somewhat related note, there are also concerns that while the IRS flagged certain applications, the agency has been lax in enforcing the law forbidding tax-exempt 501(c)(4) groups from engaging in partisan politics. While these groups can collect anonymous money and spend it on advertising, they cannot endorse candidates or parties. They can, however, engage in political advertising, provided they at least make a token effort at creating the illusion that they are non-partisan. Thanks to the absurd Citizens United decision, corporations can spend unlimited money in federal elections and they have certainly been doing so, to the detriment of democracy in America.
While I am concerned about the claim that the IRS has engaged in partisan politics, I am also concerned that the law essentially allows the creation of tax-exempt fronts for money to be funneled into “non-partisan” political advertising for the left and the right. As might be imagined, to not even properly enforce such a toothless law would be a serious failure on the part of the IRS.