Monday, June 3, 2013

The IRS Blunder

I can well understand the furor created by the reports that the Cleveland office of the IRS "targeted" entities with "Tea Party" or "Patriots" in the title. I am certainly not surprised that the Republican Party is making such an issue of this news. After the Citizens United decision by the Supreme Court, it is not surprising that a flood of money was then dispatched for political causes. It is also not surprising that a flood of applications for 501(c)(4) status were then received by the IRS, which has the duty of determining if the applicant qualifies for the preferred status (gifts made to entities that undertake political work are not deductible to the donor, but those that receive the 501(c)(4) status may use the funds for "social welfare", although not for direct political purposes.) It is the responsibility of the IRS to determine whether the applicant qualifies for a 501(c)(4) exemption. Joe Klein in Time describes what happened as a "lunkheaded effort by mid-level IRS employees to use an ideological shortcut". I have some sympathy for the IRS employees, faced with a massive influx of applications, who decided to identify some applications which were suspicious, since the entities submitting them obviously exist for political purposes. Some of these applications were "shelved", essentially. Perhaps if I had been working in that IRS department, I would also have tried to weed out blatant attempts by purely political organizations to claim that any of their funds were used for the required "social welfare" purposes. That sympathetic point of view I am expressing may be shared by many. However, a more sophisticated management would have realized that by "flagging" right-wing groups they were setting themselves up to be accused of political bias.

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