Edinburgh The Internal Revenue Service apologized for batching up 300 applications for 501c4 tax exempt status when groups had Tea Party or Patriot in their names, claiming they were flooded with 2600 applications and their lower level pencil pushers were just trying to figure out a short cut. Conservatives and their Congressional allies screamed like stuck pigs demanding assurances that this kind of thing never happens again. Public Citizen, the old Ralph Nadar campaign finance watchdog, tried to get a word in edgewise demanding more investigations of the abuse of tax exempt status being awarded without any viable claims to benefiting “social welfare” as required by the regulations. They believe, as do many others, that c4 status is becoming a signpost for creating a tax haven to serve as a political slush fund on the Karl Rove Crossroads model of no holds barred campaign spending in the last US Presidential election.
What should we make of all of this this? Worth the worry or a tempest in a tea party…I mean tea pot?
Next to the military and the CIA, there are few more inscrutable and opaque government outfits than the IRS, making it pretty easy to believe both Kentucky Senator Mitch O’Connell’s accusations about their “thuggish” practice and the Tea people’s lawyer’s cry about McCarthyism. The Republicans don’t much like the IRS or anyone involved in tax collection given their project of dismantling the government dollar by dollar, so it’s not like they are going to budget more money for better supervision of nonprofits or anyone else, so it will be even easier to believe the IRS apologists that they were sorry because they were incompetent and didn’t supervise their agents well in sort of a “guys gone wild in Cincinnati” storyline.
And, of course we all have our own stories on this side of the divide as well. This year I’ve had to pay for a tax certificate requested by nonprofits in Japan to pay for speaking over there. Six months, no word, and no way to track it down. In another incident this year, I had to pay for a new copy of an exemption letter sent to me at the wrong address and lost without me knowing it was sent for several years, and suddenly got a call from an IRS investigator saying my letter and the results of an audit were held up because filing and paying for the letter as instructed by Cincinnati had confused them in Fort Worth into thinking someone else was trying to file for a new exemption under the ACORN International c3 number. One the other hand I had a great conversation with the IRS several weeks ago about waiving penalties and fines for KABF in Little Rock, and thanks for that guys! My point is simply that there is no way to figure the IRS out. And, I don’t want to get into how long it took them to start paying attention to the predatory nature of refund anticipation loans or the way they handle volunteer or VITA sites and their so-called “partnerships” there. They move at their own chosen speed without explanation or transparency, and it’s luck of the draw every time Joe Citizen ends up dealing with them, so basically the only good strategy is avoiding them completely and hoping they lose your name in the files somewhere. In short, we should all feel lucky it’s not worse.
As for the Tea people and Public Citizen’s positions, most of the Tea groups will shrivel and die anyway so it hardly matters at some level, and Karl Rove and his lawyers could tie the IRS up for years and might argue that stopping Obama from being elected is their definition of contributing to the public’s “social welfare.” Both sides are no doubt right even for both right and wrong reasons, all of which adds up to the likelihood that with less staff and less funding and no improvements in supervision or transparency, the only sure bet is that our experiences with the IRS will get a lot worse before they get any better.