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Legal analyst says we’re missing the real scandal at the IRS

wonk0513

While pundits and politicians on the left and right alike (including me, as evidenced HERE and HERE) are wringing their hands over the Internal Revenue Service scandal currently in the headlines, legal analyst Jeffrey Toobin SAYS we’re missing the main point in all of this:

Did the I.R.S. actually do anything wrong?

The stories began to come to light on Friday, when the Associated Press reported that a draft report by a Treasury Department inspector general had found that the I.R.S. subjected certain Tea Party-affiliated groups to undue scrutiny. Lois Lerner, head of the I.R.S. tax-exempt-organizations division, said the agency was “apologetic” for what she termed “absolutely inappropriate” actions by lower-level workers.

It’s important to review why the Tea Party groups were petitioning the I.R.S. anyway. They were seeking approval to operate under section 501(c)(4) of the Internal Revenue Code. This would require them to be “social welfare,” not political, operations. There are significant advantages to being a 501(c)(4). These groups don’t pay taxes; they don’t have to disclose their donors—unlike traditional political organizations, such as political-action committees. In return for the tax advantage and the secrecy, the 501(c)(4) organizations must refrain from traditional partisan political activity, like endorsing candidates.

If that definition sounds murky—that is, if it’s unclear what 501(c)(4) organizations are allowed to do—that’s because it is murky. Particularly leading up to the 2012 elections, many conservative organizations, nominally 501(c)(4)s, were all but explicitly political in their work. For example, Americans for Prosperity, which was funded in part by the Koch Brothers, was an instrumental force in helping the Republicans hold the House of Representatives. In every meaningful sense, groups like Americans for Prosperity were operating as units of the Republican Party. Democrats organized similar operations, but on a much smaller scale. (They undoubtedly would have done more, but they lacked the Republican base for funding such efforts.)

So the scandal—the real scandal—is that 501(c)(4) groups have been engaged in political activity in such a sustained and open way. As Fred Wertheimer, the President of Democracy 21, a government-ethics watchdog group, put it, “it is clear that a number of groups have improperly claimed tax-exempt status as section 501(c)(4) ‘social welfare’ organizations in order to hide the donors who financed their campaign activities in the 2010 and 2012 federal elections.”

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14 Comments

  1. Chuck Sweeny

    Pat, this is a scandal. What the IRS did was illegal. The apologists will spin and spin and spin, but this has legs.

  2. Brian Opsahl

    If he knew about it…it has legs…Chuck..!

    At this point there is no proff …so stop drinking the koolaid let fox do that..!!

  3. Chuck: I agree that this is a scandal, as I’ve made clear from the outset. But I also think Jeffrey Toobin makes a good point about another scandal at the IRS.

    I strongly disagree with the claim you made on another thread here that Nixon resigned over less than this. Nixon resigned because he personally committed impeachable offenses. There’s no evidence, at least not yet, that Obama has committed any impeachable offenses.

    Regarding your reference on another thread to the “strenuous denials of the administration-friendly media,” I’m a little confused. Most of the solid reporting on the IRS scandal and the federal snooping into journalists’ phone records has come from what Sarah Palin and those of her ilk call “the lamestream media” (the Associated Press, the New York Times, the Washington Post, CBS News, et al).

    Moreover, these “administration-friendly media,” as you call them, seem to be in general agreement that the administration is in trouble and that the IRS stuff is an outrage, as is the Justice Department’s secret subpoenas of reporters’ phone records.

  4. Steverino

    Like the tea baggers are a legitimate non-profit organization. It’s about time someone looked into their dark money shenanigans. Oh but let’s go to the roof top and yell scandal, scandal. What a load of horse apples.

  5. expdoc

    So the liberal defense is evolving to -who cares if the IRS broke the law and targeted specifice organizations for harrassment. We don’t like them or what they stand for anyway.

    Frightening.

  6. Steverino

    And the law that they broke was?????????

  7. Neftali

    Steverino – ignorance of the law is no excuse. But I’ll help you out since I’m such a kind soul.

    http://www.pappastax.com/index.php/2009/03/irs-has-zero-tolerance-taxpayer-harassment-policy-but-is-it-enforced

  8. The right has been crying fire for 5 or 6 years now. Forgive me if I no longer pay attention to the scandal of the week.

    This link sums it all up.

    http://www.youtube.com/watch?v=heasnJY8HMM

  9. Steverino

    Nef – Are you playing judge and jury? We’re all innocent until proven otherwise and last time I checked the IRS has not been found guilty of anything yet. Let the investigation proceed and conclude (not Issa’s witch hunt committee) then you can make your stupid assumptions. Perhaps a precedent was established when they harassed the NAACP.

  10. Brian Opsahl

    Those IRS fellas are going to need a good lawyer…may I suggest the lawyer who represented Scooter Libby the guy that leeked all about one of our spy’s and then outed her..

  11. expdoc

    George Will nails it.

    http://www.jewishworldreview.com/cols/will051413.php3

    This administration aggressively hawked the fiction that the Benghazi attack was just an excessively boisterous movie review. Now we are told that a few wayward souls in Cincinnati, with nary a trace of political purpose, targeted for harassment political groups with “tea party” and “patriot” in their titles. The Post reported Monday that the IRS also targeted groups that “criticized the government and sought to educate Americans about the U.S. Constitution.” Credit the IRS’s operatives with understanding who and what threatens the current regime.

    Jay Carney, whose unenviable job is not to explain but to explain away what his employers say, calls the IRS’s behavior “inappropriate.” No, using the salad fork for the entree is inappropriate. Using the Internal Revenue Service for political purposes is a criminal offense.

    It remains to be discovered whether the chief executive is guilty of more than an amazingly convenient failure to superintend the excesses of some executive-branch employees beyond the Allegheny Mountains. Meanwhile, file this under “What a tangled web we weave”:

    The IRS official in charge of the division that makes politically sensitive allocations of tax-exempt status said Friday that she learned from news reports of the targeting of conservatives. But a draft report by the IRS inspector general says this official was briefed on the matter two years ago.

    *snip*

    Time was, progressives like the president 100 years ago, Woodrow Wilson, had the virtue of candor: He explicitly rejected the Founders’ fears of government. Modern enlightenment, he said, made it safe to concentrate power in Washington, and especially in disinterested executive-branch agencies run by autonomous, high-minded experts. Today, however, progressivism’s insinuation is that Americans must be minutely regulated because they are so dimwitted they will swallow nonsense. Such as: There was no political motive in the IRS targeting political conservatives.

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    Episodes like this separate the meritorious liberals from the meretricious. The day after the IRS story broke, The Post led the paper with it, and, with an institutional memory of Watergate, published a blistering editorial demanding an Obama apology. The New York Times consigned the story to page 10 (its front-page lead was the umpteenth story about the end of the world being nigh because of global warming). Through Monday, the Times had expressed no editorial thoughts about the IRS. The Times’s Monday headline on the matter was: “IRS Focus on Conservatives Gives GOP an Issue to Seize On.” So that is the danger.

    If Republicans had controlled both houses of Congress in 1973, Nixon would have completed his term. If Democrats controlled both today, the Obama administration’s lawlessness would go uninvestigated. Not even divided government is safe government, but it beats the alternative.

  12. Brian Opsahl

    What laws did Mr.Obama break again…lawlessness….really..!!

  13. Robert

    From what I’ve heard about how Washington works, often times the President is deliberately not kept in the loop of such incidents so he/she can claim plausible deniability. Heard that this morning from a Republican strategist. This applies to all 3 supposed scandals currently hounding the administration.

  14. Craig Knauss

    doc, says “If Republicans had controlled both houses of Congress in 1973, Nixon would have completed his term.”

    Really? Maybe someone should tell doc it was Republican leaders (they actually had “leaders” back then) who advised Nixon to resign to avoid impeachment and damaging the Republican Party.

    And as Steverino said, we’re all innocent until proven guilty. Due process of law is in the Constitution for those who’d like to read it sometime.

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