Tuesday, May 14, 2013

Tax free designation: the selective outrage of the right.

First off, the IRS should be absolutely neutral politically in who it audits. Regardless of who is in office.

But, as Salon points out in When the IRS targeted liberals, the recent Republican outrage over 'inspection' of tea-party applications for tax-free status is a tad hypocritical. Back in the Bush era, conservative churches nakedly advocated for Bush's election. But it's a liberal Episcopal church which was audited for the audacity of an anti-war sermon.
“I wish there was more GOP interest when I raised the same issue during the Bush administration, where they audited a progressive church in my district in what look liked a very selective way,” California Democratic Rep. Adam Schiff said on MSNBC Monday. "...I’m glad now that the GOP has found interest in this issue and it ought to be a bipartisan concern.”

The well-known church, All Saints Episcopal in Pasadena, became a bit of a cause célèbre on the left after the IRS threatened to revoke the church’s tax-exempt status over an anti-Iraq War sermon the Sunday before the 2004 election. “Jesus [would say], ‘Mr. President, your doctrine of preemptive war is a failed doctrine,’” rector George Regas said from the dais.

...In 2007, the IRS closed the case, decreeing that the church violated rules preventing political intervention, but it did not revoke its nonprofit status.

And while All Saints came under the gun, conservative churches across the country were helping to mobilize voters for Bush with little oversight. In 2006, citing the precedent of All Saints, “a group of religious leaders accused the Internal Revenue Service yesterday of playing politics by ignoring its complaint that two large churches in Ohio are engaging in what it says are political activities, in violation of the tax code,” the New York Times reported at the time. The churches essentially campaigned for a Republican gubernatorial candidate, they alleged, and even flew him on one of their planes.
And it wasn’t just churches. In 2004, the IRS went after the NAACP, auditing the nation’s oldest civil rights group after its chairman criticized President Bush for being the first sitting president since Herbert Hoover not to address the organization. “They are saying if you criticize the president we are going to take your tax exemption away from you,” then-chairman Julian Bond said. “It’s pretty obvious that the complainant was someone who doesn’t believe George Bush should be criticized, and it’s obvious of their response that the IRS believes this, too.”
Then, in 2006, the Wall Street Journal broke the story of a how a little-known pressure group called Public Interest Watch — which received 97 percent of its funds from Exxon Mobile one year — managed to get the IRS to open an investigation into Greenpeace. Greenpeace had labeled Exxon Mobil the “No. 1 climate criminal.” The IRS acknowledged its audit was initiated by Public Interest Watch and threatened to revoke Greenpeace’s tax-exempt status, but closed the investigation three months later.

As the Journal reporter, Steve Stecklow, later said in an interview, “This comes against a backdrop where a number of conservative groups have been attacking nonprofits and NGOs over their tax-exempt status. There have been hearings on Capitol Hill. There have been a number of conservative groups in Washington who have been quite critical.”
All of these stories suggest that while concern with the IRS posture toward conservative groups now may be merited, to fully understand the situation requires a bit of context and history.
Was there real smoke in this fire? Remember, the tax exempt status meant they weren't supposed to try to influence elections.

From ProPublica:
One of the applications the IRS released to ProPublica was from Crossroads GPS, the largest social-welfare nonprofit involved in the 2012 election. The group, started in part by GOP consultant Karl Rove, promised the IRS that any effort to influence elections would be “limited.” The group spent more than $70 million from anonymous donors in 2012. 


dr.primrose said...

Good L.A. Times column today - The real scandal: IRS gives tax exemptions to political partisans. It says in part:

"The revelation that conservative political groups seeking tax-exempt status were singled out for special attention by Internal Revenue Service bureaucrats has given Republicans their best cudgel yet to beat on the Obama administration. But as the outrage revs into high gear, let me offer a contrarian perspective: As inept as the IRS may have been in the way they processed applications for 501(c)(4) status, the bigger scandal is that the IRS grants the tax-exempt designation to so many overtly political organizations, treating them as if they are no more engaged in partisan politics than the Girl Scouts.

"The reality is that numerous high-powered political operatives for both Republicans and Democrats have formed 501(c)(4) organizations. The GOP’s most prominent political guru, Karl Rove, has Crossroads GPS, a 501(c)(4) entity that spent $70 million during the 2012 campaign encouraging voters to cast their ballots for Republican candidates. Under the guidance of former Obama campaign manager Jim Messina, the president's reelection apparatus has been reorganized as a 501(c)(4) group that no doubt will 'educate' the public about the need for more Democrats in Congress.

After the Supreme Court's notorious Citizens United decision in 2010 that opened the way for corporations and unions to spend unlimited amounts of money in political campaigns, all that new funding needed someplace to go where it would not be easily tracked. In response, the number of groups seeking 501(c)(4) status – which, in addition to the tax break, allows donors to remain anonymous – shot up to 3,400 in 2012.


"The fact is that none of the right-wing applicants were turned down, even though they are probably as engaged in partisan campaigning as Karl Rove or Jim Messina. A 501(c)(4) group is, by law, supposed to be a social welfare organization whose primary activity is not politics. Can anyone honestly say that about Rove or Messina or any of the many tea party organizations?

"Sadly, after this so-called scandal has blown over and enough heads have rolled, the cowed IRS will be even more timid in denying tax-exempt designation to any front organization run by partisan political operatives and funded by corporate moneymen who want to keep their names out of the news"

JCF said...

How you can tell the LA Times is not yet in Murdoch's clutches, dr.p!

...but tragically, this will probably all be lost, in the sh*tstorm over the "IRS screened conservatives" scandal. :-(

dr.primrose said...

It's not yet in Murdoch's clutches. But the future may be worse.

The Koch brothers are rumored to be interested in buying it -- in order to turn it into an ideological organ. Many people (incluing me) will cancel their subscriptions in that case; but they don't care -- they have enough money to keep it going at a loss forever.

One of my friends who works there says that at least Murdoch knows how to run a paper. The Kochs don't have a clue.