IRS doesn’t need more authority

Published on Tuesday, 10 December 2013 22:00 - Written by

Last week, President Barack Obama offered a new narrative about what exactly happened with the IRS and conservative groups in 2012 — a narrative at odds with established facts.

It wasn’t merely a sanitization of history. It was very likely a prelude to a push for new rules that will legitimize the IRS repression of Americans’ rights.

“You’ve got an office in Cincinnati in the IRS office that, I think for bureaucratic reasons, is trying to streamline what is a difficult law to interpret about whether nonprofit is actually a political organization, deserves a tax exempt [status], and they’ve got a list,” Obama said in an interview with Chris Matthews of MSNBC. “Suddenly everyone is outraged.”

The facts of the IRS case are clear. At the direction of higher-ups in Washington, IRS officials (some in Cincinnati) targeted conservative groups for extra scrutiny (such as asking for book reports on all books they read, and for the content of their prayers). Using such tactics, the tax exempt status of many such groups was delayed until after the 2012 election.

Obama’s narrative serves a larger purpose than just rehabilitating his administration officials after one of the most embarrassing scandals of the year. It’s to lay the groundwork for new IRS rules.

“The rules would upset more than 50 years of settled law and practice by limiting the ability of certain tax-exempt nonprofits, organized under Section 501(c)(4) of the Internal Revenue Code, to conduct nonpartisan voter registration and voter education,” writes former Federal Election Commission chairman Bradley A. Smith in the Wall Street Journal. “Such organizations would be forbidden to leave records of officeholder votes and public statements on their websites in the two months before an election.”

In other words, such groups would have to stay out of political races in the 60 days leading up to any election.

Those proposed rules are in direct violation of the U.S. Supreme Court’s Citizens United decision, which says groups can engage in political activities — the government has no business abridging those rights.

Obama’s statement reveals something more about his thinking: he questions whether those groups “deserve” tax exempt status, as “charities.” That’s never been in question. That portion of the tax code wasn’t set up for charities.

“The tax code contains at least 30 different categories of nonprofits,” Smith explains. “What we think of as ‘charities’ are typically organized under Section 501(c)(3). That section exists for ‘charitable’ and ‘religious’ organizations, and it is where one finds organizations such as churches, the Red Cross, the American Cancer Society and so on. Section 501(c)(4) is traditionally reserved for advocacy organizations. The National Rifle Association, the Sierra Club, Planned Parenthood Action Fund, and the Brady Campaign to Prevent Gun Violence are 501(c)(4)s.”

It was only after the left faced significant opposition in 2010 and the right began to use these groups more extensively that the Obama administration decided to target them, Smith adds.

The scandal occurred because the IRS has too much discretion in these matters. We need fewer rules, not more.