IRS Seal
The maelstrom over the revelation that the IRS targeted anti-tax Tea Party groups applying for tax exempt status for scrutiny is showing no signs of slowing down, with Republicans seeing their chance to milk a scandal for political purposes. But while the politics is heating up, some important context is emerging, like the fact that liberal groups were targeted as well, and in fact the only group to have its application denied was a liberal group.
One of those groups, Emerge America, saw its tax-exempt status denied, forcing it to disclose its donors and pay some taxes. None of the Republican groups have said their applications were rejected.

Progress Texas, another of the organizations, faced the same lines of questioning as the Tea Party groups from the same IRS office that issued letters to the Republican-friendly applicants. A third group, Clean Elections Texas, which supports public funding of campaigns, also received IRS inquiries.

The IRS released a statement late Tuesday admitting that it had pooled together the applications of groups that were politically active, and incorrectly used the names of some of the groups—a "minority" of them—as the basis for targeting them. Which, David Cay Johnston at the Columbia Journalism Review reminds readers is the IRS's job.
  • Missing from much coverage is the relevant recent history—the role of the Supreme Court’s 2010 Citizens United decision and how it prompted a deluge of requests from new organizations seeking tax-exempt status under tax code Section 501(c)(4) as “social welfare” organizations—despite the fact that many of these are blatantly political operations.
  • Congress requires the IRS to review every application for tax-exempt status to weed out organizations that are partisan, political, or that generate private gain. Congress has imposed this requirement on the IRS, and its predecessor agencies, since 1913.
Those are just two of the salient points Johnston makes to give the critical context behind this scandal. He also points out that the IRS is tasked with the vague and mushy directive to distinguish between groups are "primarily engaged" in politics versus those that are primarily engaged in "social welfare," and getting to that distinction is a challenge for an agency deluged by applications post-Citizens United and which has had its budget slashed by 17 percent per capita in the last decade. The agency processed 2,774 501(c)(4) applications in 2012.

The other point he makes, which we're not hearing frequently or loudly enough in the response to the kerfuffle, is a real scandal: "the social welfare tax exemption is being used by existing 501(c)(4) organizations, including some very large ones, to promote partisan political interests—the very activity Congress has explicitly prohibited for a century." In other words, Karl Rove and Crossroads.

This is a serious issue, one deserving of investigation. But Republicans could be biting off more than they can chew if it causes a bright light to be shone on how politically partisan organizations, like Rove's, are exploiting the law.

Originally posted to Joan McCarter on Wed May 15, 2013 at 08:14 AM PDT.

Also republished by Daily Kos.

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