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IRS Seal
The real lesson of the so-called "IRS targeting scandal" is that Congress created a regulatory nightmare by writing imprecise campaign finance laws and by putting the IRS in charge of determining the tax status of political organizations.

If Congress were interested in fixing the problem, they'd write a coherent law that erases the multitude of ambiguities and loopholes in the current legal framework, but instead they've chosen a political response that could actually make things worse, slipping another dose of convoluted language into last week's omnibus funding bill:

The relevant section is buried on page 439 of the gigantic bill. Just nine lines long and 68 words, the two clauses say money designated for the IRS cannot be used to "target citizens of the United States for exercising any right guaranteed under the first Amendment" or to target "groups for regulatory scrutiny based on their ideological beliefs."
On the surface, that sounds reasonable. After all, targeting on the basis of ideology is bad, right? Well, as Patrick Caldwell of Mother Jones writes:
Tacked on as a symbolic effort to mollify conservatives’ anti-IRS mania, the text is so overly vague that it could mean the dissolution of longstanding rules. Or nothing at all. No one's really sure.
The problem is that while the law says that the IRS should treat all political groups the same, it also says that donations to some of those groups should be tax-exempt while donations to other groups should not be tax-exempt. There's no way to enforce that law without scrutinizing groups that seek tax-exempt status, and there's no way to scrutinize those groups without generating accusations of unfairness.

According to one former IRS official who spoke with Caldwell, the legislation has the potential to allow any non-profit group to engage in political activity without jeopardizing their tax status because it is impossible to enforce existing regulations without evaluating the content of their speech. That outcome doesn't appear to be what Congress had in mind when it passed the legislation, but according to Caldwell's reporting, it's plausible that it will be what happens.

If Congress doesn't want the IRS to scrutinize political activity when evaluating whether non-profit groups are entitled to tax-exempt status, then it should give that responsibility to some other agency. Unless Congress wants all political donations to be tax deductible, somebody needs to determine which groups truly are non-profits and which groups are just fronts for political operations.

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Comment Preferences

  •  Great. So if my idealogical beliefs are that I (3+ / 0-)
    Recommended by:
    divineorder, sethtriggs, Matt Z

    should rob banks and not pay taxes, the IRS can't penalize me.

    Is wonderful country, or what?

  •  To clarify ... (4+ / 0-)
    Recommended by:
    divineorder, nextstep, sethtriggs, VClib

    ... contributions to tax-exempt 501(c)(4)s are not tax-deductible. Only contributions to 501(c)(3)s -- which cannot intervene in elections -- are tax-deductible.

  •  End deductions for contributions to non-profits. (2+ / 0-)
    Recommended by:
    divineorder, NonnyO

    Non-profit groups can solicit donations, but the donations should not be tax-deductible for the donors. Tax deductions are a regressive give-away to the rich.

    •  Or give a standard deduction of 10% (2+ / 0-)
      Recommended by:
      sethtriggs, cocinero

      To everyone who itemizes. Regardless of whether they actually gave anything or not, just assume they gave 10%.

      If they gave less, they get a break. If they gave more, well, good for them.

      That's fair. And easy. And means no charity needs to worry about people getting receipts, or verification for thee donation, or anything.

      Whether the charity has different rules on how they report their income is another thing entirely, and one where the IRS should have some investigative powers.

  •  Thanks for this excellent post. Congress is once (1+ / 0-)
    Recommended by:
    Eric Nelson

    again dysfunctional.

    FWIW PCCC and other progressive orgs have as a priority campaign finance reform.

    http://boldprogressives.org/...

    Move Single Payer Forward? Join 18,000 Doctors of PNHP and 185,000 member National Nurses United

    by divineorder on Sat Jan 25, 2014 at 07:15:59 PM PST

  •  one solution (2+ / 0-)
    Recommended by:
    divineorder, NonnyO

    would to revoke tax exempt status across the board - for these groups, for churches, for everything.

    This would also reduce the amount of times some wingnut writes that a scandal was a "so-called" one when the "other side" is the victim.  Had a Republican targeted liberal groups in the same way, posters here, naturally, would still be crying and stamping their feet about the grave injustice of it all.

    Human nature.  

    So let everyone kick in and avoid the whole silly dilemma.

      •  As long as the various religious figures... (1+ / 0-)
        Recommended by:
        divineorder

        ... insert their religious opinions into politics, and try to interfere with the writing and/or enactment of secular laws, they need to be taxed.

        And Dumbya's, now Obama's, unconstitutional and illegal 'office of faith-based initiatives' needs to be disbanded and de-funded.

        I'm sick of attempts to steer this nation from principles evolved in The Age of Reason to hallucinations derived from illiterate herdsmen. ~ Crashing Vor

        by NonnyO on Sat Jan 25, 2014 at 07:41:45 PM PST

        [ Parent ]

          •  I'm sorry but what politician or party did (1+ / 0-)
            Recommended by:
            NonnyO

            Martin Luther King advocate for ?

            Most dems realize the republicans have turned their church industries into political money machines  , it does not take a genius to figure out the difference between what they do , and what legitimate advocates for the disenfranchised do

            Beer Drinkers & Hell Raisers

            by Patango on Sat Jan 25, 2014 at 09:18:28 PM PST

            [ Parent ]

            •  He advocated for legislation. (3+ / 0-)
              Recommended by:
              Lying eyes, nextstep, VClib

              And the prior commenter claimed that "As long as the various religious figures insert their religious opinions into politics, and try to interfere with the writing and/or enactment of secular laws, they need to be taxed."

              And if you want the IRS to determine who are "legitimate advocates for the disenfranchised," good luck.

              •  It is the IRS's Job to sift thru (0+ / 0-)

                the snake oil and the people who do legitimate church based work

                 "You" including Dr King in the snake oil category , and trying to pin this confusion on " me " , is also disingenuous  

                Let me help you

                Ralph Reed, best known as the first executive director of the Christian Coalition during the early 1990s. Convicted for illegally giving gifts and making campaign donations to legislators in return for votes or support of legislation.

                wiki

                Crystal Cathedral insiders received hefty compensation, housing ...

                latimesblogs.latimes.com/.../crystal-cathedral-insid...‎
                Los Angeles Times

                Dec 2, 2010 - Financial documents filed Wednesday in the Crystal Cathedral ... insiders and members of founding pastor Robert H. Schuller's family in the last year. That sum included $832,490 in tax-exempt housing allowances given to eight people. .... Christ also said "by their fruits you will now them"...they are scam  ...

                Compared to people trying to help striking garbage route workers in Memphis Tenn. ? Give us a break

                Beer Drinkers & Hell Raisers

                by Patango on Sun Jan 26, 2014 at 05:53:40 AM PST

                [ Parent ]

                •  No. (2+ / 0-)
                  Recommended by:
                  nextstep, VClib

                  Churches and their leaders are allowed to advocate for legislation without jeopardizing 501c3 status. They can't promote candidates, however.

                  •  Adam (0+ / 0-)
                    No.Churches and their leaders are allowed to advocate for legislation without jeopardizing 501c3 status. They can't promote candidates, however.
                    I never even made that argument , that is not what you were corrected on  

                    Beer Drinkers & Hell Raisers

                    by Patango on Mon Jan 27, 2014 at 08:00:48 AM PST

                    [ Parent ]

                •  Pantago - it's actually NOT the IRS' job (1+ / 0-)
                  Recommended by:
                  Patango

                  to sift through to determine what causes are more deserving than others. They are actually forbidden from that activity. They will certainly look for fraud, but a church who is advancing civil rights and one that opposes Roe v Wade are viewed the same.

                  Churches have long played a very important role in American politics and under current IRS rules have wide latitude to engage in public policy, including ballot initiatives and referendums. The can't endorse candidates by name, but short of that are free to engage in political issues. Many seem to forget that the civil rights movement was organized, managed, and funded out of black churches.

                  "let's talk about that"

                  by VClib on Sun Jan 26, 2014 at 06:48:58 PM PST

                  [ Parent ]

                  •  VClib says (0+ / 0-)
                    Pantago - it's actually NOT the IRS' job to sift through to determine what causes are more deserving than others.

                     

                    I never advocated that is how it should be in these comments , you and Adams insistence on introducing an opinion I do not have into what is being discussed is rather straw man deflective

                    My comment there pretty much covers the rest of what you posted also , you presume I need to be educated on this subject , which is also incorrect

                    They are actually forbidden from that activity. They will certainly look for fraud, but a church who is advancing civil rights and one that opposes Roe v Wade are viewed the same.
                    Yes , Adam used Dr King as an incorrect example of corruption in our CAMPAIGN FINANCE LAW , and I corrected him on that
                    Many seem to forget that the civil rights movement was organized, managed, and funded out of black churches.

                    "let's talk about that"

                    by VClib

                    I was the one addressing that issue , Adam seems to be the one you need to talk to , maybe that is why he brought you over for the tag team , lol :)

                    Do I need to call for an UR now? :)

                    Beer Drinkers & Hell Raisers

                    by Patango on Mon Jan 27, 2014 at 08:27:28 AM PST

                    [ Parent ]

            •  Patango - churches can advocate for or against (0+ / 0-)

              the disenfranchised. The IRS must treat them the same.

              "let's talk about that"

              by VClib on Sun Jan 26, 2014 at 06:51:23 PM PST

              [ Parent ]

          •  I had more in mind... (1+ / 0-)
            Recommended by:
            lotlizard

            ... the perverted sexually obsessed morons (preachers and/or politicians) who have their noses so far up women's vaginas they're touching cervical openings and trying to climb into wombs..., or the ones who advocate for forced vaginal ultrasounds in lieu of their limp little penises..., or the reichwingnut freakazoids who want the government to have total control over women's bodies by law per their religious dictates to senators and/or representatives who make laws.  They need to be taxed into oblivion.

            I realize almost "everyone" loves MLK and he's been elevated to sainthood among many, but I'm not one of the people who worships the ground he walked on.  His adultery takes him down several pegs in my estimation of what a real man is.

            [My father was loyal, faithful, and true to his marriage vows, and I invariably compare men to him.  Few measure up to someone as good as my father.  I'm nearly 68, and I've still never met a man as thoughtful, compassionate, kind, loyal, loving, and considerate as my father.  He died in 1975 and I still miss him.]

            I'm sick of attempts to steer this nation from principles evolved in The Age of Reason to hallucinations derived from illiterate herdsmen. ~ Crashing Vor

            by NonnyO on Sat Jan 25, 2014 at 09:46:50 PM PST

            [ Parent ]

  •  Thomas Jefferson must be spinning in his grave (4+ / 0-)
    Laws are made for men of ordinary understanding and should, therefore, be construed by the ordinary rules of common sense. Their meaning is not to be sought for in metaphysical subtleties which may make anything mean everything or nothing at pleasure.
    
 — Thomas Jefferson
    Convoluted wording of laws based on pretzel logic is doing none of us any favors..., but it's sure helping the corporations, banksters, Wall Street, and the huckster fundies.

    Plain wording (like what's found in the US Constitution and the Bill of Rights) isn't good enough for these robber barons and Cretinous Congress Critters.  They muck it all up with wording so dense no one really understands it and it's therefore interpreted any damned way they want to.

    I can't tell you how underwhelmed I am.

    I'm sick of attempts to steer this nation from principles evolved in The Age of Reason to hallucinations derived from illiterate herdsmen. ~ Crashing Vor

    by NonnyO on Sat Jan 25, 2014 at 07:38:47 PM PST

  •  Dude, that's a feature, not a bug. (4+ / 0-)

    Of a corrupt political body that is.

    I'm not sure why people aren't just recognizing it for what it is and pointing to such actions and outright saying, "Look, more evidence of political corruption!"

    Really, I don't.


    "We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both." - Louis Brandies

    by Pescadero Bill on Sat Jan 25, 2014 at 07:40:28 PM PST

  •  "First Amendment rights" (2+ / 0-)
    Recommended by:
    divineorder, sethtriggs

    So if we have a slew of churches violating their non-profit status by organizing PACs while doing so in the name of religious freedom, the IRS isn't allowed to do anything about it?

    That's what it sounds like to me.  Free exercise of religion is guaranteed under the First Amedment.  And if they'd wanted to protect free speech only, they would have put better language in the bill.

    This is really underhanded b.s.

    ""target citizens of the United States for exercising any right guaranteed under the first Amendment"

  •  Amen brother! (1+ / 0-)
    Recommended by:
    divineorder

    Preach on!

  •  Why not apply the law as written? (2+ / 0-)
    Recommended by:
    sethtriggs, Patango

    I ask because who's to say what constitutes an ideology? the republlcans? - lol - when "liberty" = forced birth (just as one of many examples of duplicity)
    ~~~~~~~~~~~~~~~~

    Representative Chris Van Hollen is preparing lawsuit over 501 c(4) tax exempt status

    A little of the back story on this anonymous tax except 501c(4) loophole in 1959

    The good news: Representative Chris Van Hollen suing IRS over 501 c(4) tax exempt status

    Rep. Chris Van Hollen [ranking member of the House Budget Committee] is preparing to file a lawsuit in federal district court challenging the Treasury Department and the Internal Revenue Service over the agency’s interpretation of the 501(c)(4) law that determines tax-exempt status for social welfare organizations.
    (short ad – sorry)
    More of the story 8/20/2013 and transcript @ link: http://www.nbcnews.com/...
    “What we’re asking the court to do is to instruct the IRS to apply the law as it was written,”
    – Chris Van Hollen
    It doesn’t cure the Citizens United decision and the subsequent flood of money into politics/elections, but at least a bit more transparency could be achieved hopefully – a good move imo

    Also too Kudos to congressman Elijah Cummings’ level headed ass kicking of Darrel Issa on this bogus “scandal” and for exposing one more rotten plank of the republicans talk radio platform. That’s one less election hoax for republicans too
    ~~~~~~~~~~~~~~~

    Stephen Colbert has former FEC chairman Trevor Potter set up a 501(c)4 super pac to demonstrate political corruption of shell corporations

    http://www.colbertnation.com/...

    Well he has Trevor Potter come and and give him a 501c4, this one called “Anonymous Shell Corporation”. Corporations can give to a c4 anonymously, nobody knows who is donating, and this money can be used for politics. Potter explains how lawyers often form Delaware corporations which are called shell corporations that just sit there until they’re needed.

    Potter tells him that has to turn his “Anomymous Shell Corporation” into a corporation by having a board of directors meeting, but just Stephen by himself is enough for the board of directors. He elects himself as President, Secretary, and Treasurer, and authorizes his corporation to file the papers with the IRS in May 2013. So he can get money for his c4, use it for political purposes, and nobody knows anything about it until 6 months after the election, and even then nobody will know who his donors are.

    Thx Jed Lewison

  •  As I read the relevant line I don't see much (2+ / 0-)
    Recommended by:
    sethtriggs, Patango

    protection for political fund-raising. The key to me is the phrase:

    to target "groups for regulatory scrutiny based on their ideological beliefs."
    The IRS activity that triggered this was scrutiny based upon political activity not ideology. Since the search terms used actually targeted both liberal and conservative groups, there is NO discrimination based upon ideology, and what the IRS did last year should be unaffected by this poorly worded statement.

    More problematic is the vague first amendment statement, but I would imagine that it would not be hard to argue that no-one has a first amendment right to tax free expenditures on behalf of exercising their free speech.

    It looks to me more like someone pulled a fast one on the conservatives who insisted on language in the bill to protect their secret donors.
     

  •  The IRS is going after "Pastors for Peace"… (1+ / 0-)
    Recommended by:
    sethtriggs

    The Dutch kids' chorus Kinderen voor Kinderen wishes all the world's children freedom from hunger, ignorance, and war. ♥ ♥ ♥ Forget Neo — The One is Minori Urakawa

    by lotlizard on Sat Jan 25, 2014 at 08:53:46 PM PST

  •  Nibbling at the fringes here (0+ / 0-)

    Democrats have no credibility on campaign finance until they mount an all out assault on Citizens Union which they currently seem just as happy with as the Republicans.

  •  Big donations to President Obama = ambassadorship. (0+ / 0-)

    http://smirkingchimp.com/...

    I guess we're not supposed to find this embarrassing or wrong, because it's our party. And, some will say it's the way the system has always worked, so "don't all of a sudden blame the Black guy." But still.

    The Dutch kids' chorus Kinderen voor Kinderen wishes all the world's children freedom from hunger, ignorance, and war. ♥ ♥ ♥ Forget Neo — The One is Minori Urakawa

    by lotlizard on Sun Jan 26, 2014 at 09:01:17 AM PST

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