The IRS & the Tea Party: Nonprofits Need More Scrutiny, Not Less

Washington Republicans and Democrats finally found something about which they can agree: The Internal Revenue Service should not have singled out groups with conservative sounding names for heightened scrutiny when they applied for tax-exempt status.

Democrats can claim consistency. When Bush Administration departments were caught politicizing the Corporation for Public Broadcasting and using partisan litmus tests to fire U.S. attorneys, Democrats cried foul. Republicans then were mostly silent. All it took for the GOP to figure out that government must remain neutral was a despised Democratic president.

Details about the current IRS imbroglio continue to emerge. Whether it was a coordinated attempt to hamper conservative groups or a few rogue employees who blundered terribly, there must be accountability.

Singling out groups based on politics is wrong, plain and simple. A vast federal government can succeed only if career workers remain apart from partisanship. The IRS, the Justice Department, all branches of government have a duty to treat people equitably regardless of their political persuasion.

But let’s be clear about the crime, mistake or whatever you want to call it. The IRS did not err by strictly scrutinizing groups with “tea party,” “9/12” and other conservative-sounding terms in their names. It erred by strictly scrutinizing primarily groups with those names. In an ideal world and with far better funding, the IRS would strictly scrutinize every applicant for tax-exempt status.

Not having to pay taxes is a precious gift from the American people, but it comes with strings attached. Those who cannot abide by the strings should not receive privileged status. Yet many tax-exempt organizations get away with breaking the rules, and the problem has only worsened since the U.S. Supreme Court’s flawed Citizens United decision.

The 501(c)4 category, named for the IRS code section that applies, is meant for groups that “promote social welfare [and] should primarily promote the common good and general welfare of the people of the community as a whole.” The gray area is in the word “primarily.” In theory, such groups must limit how much they work to influence elections. In practice, many skirt the edges, fooling only the willfully blind enforcers at the IRS.

Because such groups may keep a lot of their donor information secret, they have become sort of like money-laundering operations for partisans who prefer their names not be associated with their politics. The most notorious example is Crossroads GPS, Karl Rove’s group that so heavily spent millions supporting conservatives and attacking progressives leading up to the 2012 election without disclosing who really was paying the bills.

The same problem spills into 501(c)3 groups like churches and charitable nonprofits. They face stricter rules about politicking, but they frequently straddle the line. Some churches flagrantly cross it, defying the IRS to do something. It rarely does.

If there was any good in the IRS’s targeting tea party groups, it was that it might have been a sign that investigators finally had grown spines about enforcement.

Surely, their spines once again are mush. Seemingly every politician rushed to the podium to damn the IRS. Its leaders are forced out as punishment. Congress and the Justice Department launch investigations. Under such strain, it is exceedingly unlikely that vigorous investigations into any nonprofits will continue. Rather, the IRS will keep its head low.

If you have ever thought about promoting social welfare, doing a little politicking on the side, and helping some rich friends conceal their donations, there has never been a better time to found a nonprofit.

Don’t look for Congress to fix things. Better funding for tax collectors is a non-starter in the current political environment. Lawmakers cannot even agree that disclosure of who is buying elections is a good idea.

The best solution would be to do away with tax-exempt status all together. Estimates vary, but the cost runs to tens and perhaps hundreds of billions of dollars. If these groups started paying taxes and donors stopped writing off their gifts, it would fill a substantial part of the deficit.

In return for paying their taxes like everyone else, those groups could do all the politicking they want.

Christian Trejbal is a member of the board of directors of the Association of Opinion Journalists and chair of the Open Government Committee. Overcoming graduate degrees in philosophy, he worked as an editorial writer at The (Bend) Bulletin and The Roanoke Times for more than a decade. In 2013, he and his wife moved to Portland, Ore., where he writes freelance, pursues a couple of book projects and provides public policy analysis. Or, as his wife prefers to say, he is a stay-at-home dude. Follow him on Twitter @ctrejbal.

Image Source: Wikimedia Commons.

  • mary

    The entire “nonprofit”, and “tax exempt” categories need to end. One billionaire, through a loophole in the Code has evaded 6 BILLION in income taxes in the past decade by use of these forms. Over time, special interests and politicians have managed to elbow their ways into this category, while the ordinary worker pays the taxes they evade.

Why I Wrote “Trumping And Drinking”
Get Over Yourselves. We’re All Rory Gilmore
Hillary Clinton, Shake It Off, Taylor Swift, Hillary Clinton Campaign song
Six Reasons “Shake It Off” Should Be Hillary Clinton’s Campaign Theme Song
Nancy Reagan dies, Just Say No, Ronald Reagan
A Not-So-Positive Ode to Nancy Reagan’s Frothy “Just Say No” Campaign
I Married for Health Insurance
Why I Wrote “Trumping And Drinking”
A Case of Nixonian Deja Vu
Post-Election Munchies: What is Your Grief Snack of Choice?
Why I Wrote “Trumping And Drinking”
A Case of Nixonian Deja Vu
Trump Reality Check, Now with Actual Facts!
Fascism Facts
I Married for Health Insurance
Get Over Yourselves. We’re All Rory Gilmore
Post-Election Munchies: What is Your Grief Snack of Choice?
Women’s Elections Rights in Saudi Arabia: A Token Drop in an Abysmal Bucket & the Plight of Women Under Sharia Law
Maybe It Wasn’t Rape: Emerging Matriarchy and the Altering of Women’s Past Sexual Narratives
Paris attacks, Paris terrorism
Is Paris Burning?
Chinese government and women's reproductive rights, adopting Chinese girls, international adoption
Dear Xi Jinping, I Am Writing to You as an American Mom of a 19-Year-Old Chinese Daughter
The Vital Voice of Hillary Clinton: Part 1
Maybe It Wasn’t Rape: Emerging Matriarchy and the Altering of Women’s Past Sexual Narratives
The Eyes Have It!
Ashley Madison, Jared Fogle, sex, rape, sexual affairs
Ashley Madison vs. Jared Fogle: Rape, Sex and Hacking in America
women's viagra, Viagra, Flibanserin, sexual arousal, women's desire, sex after menopause
That “Little Pink Pill” Isn’t All It’s Cracked Up to Be

Get our new weekly email
Broadly Speaking

featuring our best words for the week + an exclusive longread