Some Initial Thoughts on the AP and IRS Stories

A starting point for two important stories.

Bill Of Rights 2

To start with the basics:  any suggestion of the IRS behaving in a political manner or of the DOJ targeting journalist is disturbing.  The IRS should never be used as a tool to target political groups because of their views and the Department of Justice should investigate the press only for very significant reasons in the most limited way.  These basics hit on the very heart of democratic governance, because both issues hit rather directly on issues of First Amendment liberties including speech, press, petition of government, and assembly.  This makes these stories quite important.

Here are some initial thoughts.

On the AP story:

1.  The scant amount of information that we currently have suggests that this is a legacy of policies and behaviors established after 9/11, i.e., that if “terrorism” is involved, then the government get very aggressive about investigating.  I didn’t like that attitude then, and I don’t like it now.

2.  The fact that the media was targeted will mean enhanced interest on this story.

3.  I have to wonder if this won’t bring down AG Holder (not very insightful, I know).

On the IRS story:

1.  If the President directed the IRS to investigate Tea Party organizations as a means to attack his political opponents, then sign me up for impeachment.  If the origins of the actions were those of specific IRS employees, then this behavior needs to be corrected, but it is therefore a very different story.

2.  There is a legitimate interest in making sure that organizations claiming tax exempt status are eligible for that status.  However, such inquiries need to be politically neutral.

3.  A major culprit here is, ultimately, the complex nature of our tax code (and campaign finance system).  As Jeffery Toobin explains:

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.”

The entire system is one that creates a rather convoluted situation (and one that makes oversight difficult).  That being said, I will again stress that such oversight needs to be assiduously nonpolitical in nature.  Indeed, the real story here may well be the whole question of when a group should be considered “explicitly political” or not.  As such, it could ultimately be a campaign finance story more than anything else.

4.  The fact that this happened at more than one place in the IRS is problematic for the administration:  IRS officials in Washington were involved in targeting of conservative groups.

5.  I will say that on one level there could be a legitimate issue here (going back to point #3) that if there was a disproportionate number of groups of a particular point of view seeking tax exempt status during this period of time, that might account for the disproportionate level of scrutiny.   Of course, that won’t matter from a purely public relations/political point of view.

FILED UNDER: *FEATURED, US Politics
Steven L. Taylor
About Steven L. Taylor
Steven L. Taylor is a Professor of Political Science and a College of Arts and Sciences Dean. His main areas of expertise include parties, elections, and the institutional design of democracies. His most recent book is the co-authored A Different Democracy: American Government in a 31-Country Perspective. He earned his Ph.D. from the University of Texas and his BA from the University of California, Irvine. He has been blogging since 2003 (originally at the now defunct Poliblog). Follow Steven on Twitter

Comments

  1. Toobin is wrong about one point. 501(c)(4)’a can endorse candidates. Also, his argument would make sense if not for the fact that the IRS was specifically only targeting organizations from one side of the political aisle. This wasn’t a content neutral investigation.

  2. john personna says:

    The search for political activity can never be non-political, as in “I don’t know what political action is, but it’s my job to find it.” If justice is blind in search, nothing will ever be found.

    What you are really suggesting is that the search be equally politically informed, or universally politically informed. That’s fine.

    FWIW, I think it’s completely possible that “Tea Party” was a red flag for someone … but that doesn’t say it should be a green flag either. Maybe the missing step was “who else should I be looking for, on all points of the political compass?”

    As opposed to “no one should have questioned the non-political nature of the tea party!”

  3. john personna says:

    BTW, Colbert got there first?

  4. If the origins of the actions were those of specific IRS employees, then this behavior needs to be corrected, but it is therefore a very different story.

    Of course, the reality is that probably nothing is going to be changed, because no one actually cares about investigating or solving the actual problem, just about how they can use it to score political points or defend against the same.

  5. @john personna:

    As opposed to “no one should have questioned the non-political nature of the tea party!”

    The political nature of the tea party isn’t the issue. Non-profits are allowed to be political, they’re just not allowed to campaign. And even if you think a particular organization is political, demanding membership lists, or lists of the family members of members isn’t the way you go about investigating that.

  6. Dave Schuler says:

    I don’t believe the IRS thing is going to reach as far as the White House.

    That being said, I’d like to add two points to your rundown on the matter.

    First, if low-level IRS employees are setting policy for the agency and managers don’t know about it or are indifferent to it, that’s a management problem. With what we know so far the story already goes well beyond a few rogue staffers.

    Second, the IRS functioning as an opposition research arm of any political organization is at least as troubling as targeting conservative and libertarian organizations for special scrutiny and that, too, seems to be emerging from the story as it develops. It’s a lot more serious than “mistakes were made”.

  7. @john personna: We are in basic agreement.

  8. Modulo Myself says:

    I think it would be great if the AP story brings down Holder–but it won’t be so great if the outrage begins and ends with reporters. You can’t support going after someone like Bradley Manning and then object to the government legally using its powers to go after other leaks

  9. John Peabody says:

    If the IRS found that they couldn’t audit all of the new requests, they should have used a random choice (there are several methods). It is mind-boggling that anyone, ANYONE, would think that “Oh, we’ll filter it by looking for ‘tea party'” would be ethical.

  10. C. Clavin says:

    IMPEACH!!!!!!
    Wait…what…Obama got a BJ in the Oval Office?

  11. Woody says:

    IRS: Personally, I think all organizations applying for tax-exempt status should be audited. Every year. Yes, I’m aware this would result in a larger IRS force – but “personnel is policy.” I’d argue this is only enforcing the law, and encourages honesty, rather than the wink wink “social welfare” nonsense.

    AP: Interesting that none of these Freedom Worshipin’ Fourth Estaters could not possibly care less about overzealous (and possibly politically motivated) government intrusion into privacy when it did not directly concern themselves personally. This stupidity will only reinforce their own self-image as heroic Murrows.

  12. Vast Variety says:

    So the fix to the whole IRS issue would be to let all groups campaign and endorse candidates, pay no taxes, but require 100% disclosure of all donors.

  13. stonetools says:

    @john personna:

    I’m at the point now where I think we should repeal 501(c)4 altogether. It has been perverted into an instrument for funneling secret corporate money into politics-which has NOTHING to do with a social welfare mission. Karl Rove’s Crossroads is as much a social welfare organization as I am Tarzan, Lord of the Jungle. Let’s wipe the slate clean and try again….
    OK, time to leave Happy Gum Drop Fairy Tale Land. The Republicans are never going to let the perfect source of dark money out of their hands. Let’s see if we can at least get aggressive oversight of ALL “false flag” political advocacy groups, regardless of political bent.
    Here is language on what a 501(c)4 organization should be:

    The 501(c)(4) distinction was made exclusively for organizations that are non-profit and which promote social welfare.
    Applicable organizations must file IRS Form 1024 to apply for tax-exempt status.
    A 501(c)(4) organization’s net earning must go toward charitable, education or recreational purposes.
    Examples of 501(c)4 include: civic associations, volunteer fire companies, local group promoting tenants’ rights of tenants in the community
    501(c)(4) organizations, unlike their 501(c)3 counterparts, can lobby, campaign, and otherwise participate in elections so long as the activities are in line with the organization’s purpose and are not the primary activity for the organization.
    In applying for 501(c)(4) status, the applying organizations should be ready to show that it operates primarily to further common good and promote general welfare of the people in the community.

  14. matt bernius says:

    IRS: One irony about “the Tea Party” is that in many ways it runs into the same problems as Hamas* and the IRA/Sinn Féin — i.e. that it is at once a multi-wing movement that is at once political and social. In some election locals there are specific “Tea Party” lines and candidates. Thus it strains at the definition of what a 501(c)4 is (this is something that, currently, there is no easy liberal equivalent for).

    Beyond that, what would help is actual numbers. For example:
    – What are the relative percentages of conservative/liberal 501(c)4’s in the wake of Citizens United (which this is all tied into)?
    – What % of total Tea Party applications were subjected to this level of scrutiny.
    – What type of organizations made up the remaining 225 reviewed groups on the list.
    – How many of those organizations were tied to liberal and progressive causes.
    – How many *existing* conservative 501(c)4 organizations were investigated by the IRS.

    Without having any of that data its impossible to understand the size and scope of this particular problem.

    * – Obviously there is a militant/terrorist, rather than “social” wing to Hamas. But the overall point still stands, and it should be noted that many state that the Gaza government can’t be supported because it’s impossible to seperate the political from the militant side. The same was said about the IRA/Sinn Fein a few decades ago.

  15. matt bernius says:

    @John Peabody:

    It is mind-boggling that anyone, ANYONE, would think that “Oh, we’ll filter it by looking for ‘tea party’” would be ethical.

    On one hand I agree.

    On the other hand, we’re lacking a lot of data about *all* of the 501(c)4 applications from that period. There are anecdotal reports that the number of 501(c)5 apps greatly increased in the wake of Citizen United and that a disproportionate number were Tea Party/Conservative groups. We need to understand if that was the case.

    If it was, and *if* there were initially a number of issues with early Tea Party applications (which is likely considering how the Tea Party in certain localities skirts the line between social and political party), then its actually a logical step.

    Where it falls apart is if *every* Tea Party application is not just flagged for internal review, but is automatically flagged to have an external review.

  16. john personna says:

    @Stormy Dragon:

    I think the intention of the current code is that tax exempt charities have a primary focus which is nonpolitical (ie AARP, Sierra Club, even NRA) but who secondarily take political stances. If a Tea Party group is essentially a political party, that is quite different.

    A division at “non-profits” would be much cleaner, but this is what we have.

  17. matt bernius says:

    @Doug Mataconis:

    Toobin is wrong about one point. 501(c)(4)’a can endorse candidates.

    Completely correct. For those with questions see:
    http://votertechkit.progressivetech.org/introduction/legal.htm

    What a 501(c)4 cannot do is coordinate with a specific candidate’s campaign.

    This get’s dicey when someone runs as “The Tea Party Candidate” (still legal) and regularly attends Tea Party meetings/is identified as a local Tea Party Leader.

    Again, the Tea Party mixes social and political wings in a way that we haven’t seen in recent history. And that has to be taken into consideration into understanding the dynamics that *might* have led to this case.

  18. @stonetools:

    It has been perverted into an instrument for funneling secret corporate money into politics-which has NOTHING to do with a social welfare mission.

    There’s far more legitimate 501c4’s out there. I don’t see why, say, science fiction conventions ought to be punished, particularly when the problem appears to be federal employees politicizing their work. This is like dealing with a rash of muggings by banning wallets.

  19. grumpy realist says:

    I’m still wondering if there isn’t a link between the Tea Party stuff and tax protester stuff. They have a tendency to use similar “patriotic-sounding” names and I could see an overlap inadvertently occurring.

    Bluntly, if you look and sound like a tax protester, you’ll be treated like a tax protester by the IRS.

  20. John D'Geek says:

    @john personna:

    Maybe the missing step was “who else should I be looking for, on all points of the political compass?”

    Precisely. So far the question has been asked but not answered that I’ve read — did they also target “progress”, “progressive’, and similar liberal terms? If so, then … well, okay. If not, then it’s an Alice in Wonderland moment (“off with their heads!”).

    Or something like that.

    @stonetools:

    … local group promoting tenants’ rights of tenants in the community …

    And therein lies the rub — “Promiting X rights” is, prety much by definition, political. They create a non-profit organization with (supposedly) non-partisan politics built in. What could possibly go wrong?

    Yeah. Good luck with that.

  21. Tony W says:

    @Doug Mataconis:

    This wasn’t a content neutral investigation.

    Like GrumpyRealist says – it was an investigation against an organization whose core identity centers around tax revolt. That’s a legitimate reason, in and of itself, for the IRS to look into a group’s numbers. Like any audit, there’s no harm if everything is legit.

    The same folks who complain when the TSA strip searches Grandma are now complaining because the IRS did its job smartly.

  22. Jenos Idanian #13 says:

    I’m not certain about what is the worst part about the IRS story:

    1) Conservative groups were singled out for far more attention than liberal groups;

    2) Conservative groups were asked very intrusive and improper questions about their activities;

    3) Someone within the IRS was leaking highly sensitive and confidential records of conservatives to liberal groups. (Crossroads GPS filings, pending applications, etc.)

    Meanwhile, the EPA has been caught treating FOIA requests differently based on the politics of the requesters. Liberal groups routinely had their fees waived, while conservative groups were forced to pay the fees. “Green” groups got the fees waived 92% of the time, while one conservative group paid 93% of the time.

    Gosh, I wonder where the EPA folks got the idea that that sort of thing was acceptable…

  23. Jeremy says:

    I haven’t read the comments above, so excuse me if I raise points that have already been addressed, but I’m short on time so I want to be quick:

    1) Re, Toobin: The problem with his article is that he does not address the fact that the IRS only examined conservative-leaning groups. It would hold more water if the IRS also examined the Sierra Club and Center for American Progress Action Fund and groups like them, but as far as I can determine, they didn’t. That’s where the problem is. Toobin’s ignorance of that just underlies the shoddiness of his piece.

    2) There shouldn’t be any tax-exempt organizations, period. If we’re going to have a tax code, everyone should pay. Period.

  24. matt bernius says:

    @Jenos Idanian #13:
    And now for a bit of reality:

    1) Conservative groups were singled out for far more attention than liberal groups;

    Until we know the relative percentages of the numbers of Conservative vs Liberal groups applying for 501(c)4 status AND the percentage of Conservative groups that were investigated versus those not investigated, there is no way to actually prove this point.

    Again, anecdotal information suggests (but because its anecdotal cannot prove) that during this period far more conservative organizations applied for 501(c)4 status than Liberal groups.

    2) Conservative groups were asked very intrusive and improper questions about their activities;

    These questions were *the standard questions* and would be asked to any group that was subject to these reviews. Pretending that once the process initiated they got different treatment than other groups up for review is an out and out falsehood.

    3) Someone within the IRS was leaking highly sensitive and confidential records of conservatives to liberal groups. (Crossroads GPS filings, pending applications, etc.)

    You’re conflating two different cases. Both should be investigated, but pretending that they are inherently linked is playing conspiracy monger.

  25. stonetools says:

    I think the way out of this morass is a legislative or regulatory fix barring these groups from engaging in political activity unless they reveal their donors. That would close off the “dark money” spigot.
    The Republicans can be counted on to block any attempt at a fix, though. They like the current screwed -up situation , and will do their damnedest to use this “scandal” to shut down ANY attempt to oversee these groups.

  26. matt bernius says:

    @Jeremy:

    The problem with his article is that he does not address the fact that the IRS only examined conservative-leaning groups. It would hold more water if the IRS also examined the Sierra Club and Center for American Progress Action Fund and groups like them, but as far as I can determine, they didn’t.

    These two sentences demonstrate that you have taken absolutely no time to understand this issue.

    As far as we know, NO EXISTING 501(c)4 organizations — Conservative or Liberal — were investigated. Sierra Club and CAP Action Fund, along with Crossroads GPS, etc, ARE ALL EXISTING ORGANIZATIONS!

    The organizations that were investigated WERE APPLYING FOR 501(c)4 status. And currently we know very little about the 300 applying organizations that were investigated. They could very well include liberal orgs. We won’t know until the list is released (hopefully with the investigative report due out tomorrow.

  27. Modulo Myself says:

    It’s worth pointing out that Rove’s big organization was not asked questions, whereas tiny Tea Party groups were. Now this could be because Obama plays 11-dimensional chess, or it could be because the entire situation was a cock-up, up to and including the applications of the groups that were scrutinized further.

    And incidentally, according to ProPublica, Rove’s group promised on its application to have ‘limited’ involvement in the election, and then it went out and spent 70 million. If Obama was really behind the IRS urging it to go after conservatives, you would think that the big fish with a few gaping irregularities would be more important than the little ones.

  28. rudderpedals says:

    @grumpy realist: Excellent point. How many of the 225 are Militias? Minutemen? To many, “patriot” in the name means it’s a We The People sort of tax protester upset with the UN and One World Order.

  29. Jenos Idanian #13 says:

    @matt bernius: 1) The fact that Tea Party groups were highlighted for extra scrutiny is an established fact. The IRS issued an apology for it.

    2) Here are some of the questions. Please argue that these are “routine” questions.

    3) You’re right, I should have split those into two points.

    3A) Why was Austan Goolsbee given highly sensitive and confidential information about Crossroads GPS’ tax returns, which he publicly disclosed?

    3B) Why as ProPublica given the pending applications by quite a few conservative groups, when by law only approved applications are considered public?

    Thank you for the chance to correct myself.

  30. Modulo Myself says:

    @Jenos Idanian #13:

    According to ProPublica, they received 31 applications, 9 of which were not approved. So either it was malice, or it was a screw-up.

    Also, I did a bit of Googling about Goolsbee and Crossroads and think that you mean Goolsbee and the Koch brothers.

  31. matt bernius says:

    @Jenos Idanian #13:

    1) The fact that Tea Party groups were highlighted for extra scrutiny is an established fact. The IRS issued an apology for it.

    I’m not questioning that fact.

    I’m say that we need few more things, including (a) did every Tea Party application have to go through the additional review process, and (b) what other groups had to go through the additional review process.

    For example, if a proportional number of liberal groups, relative to filings, went through the same process, then this is less of a clear cut case of bias.

    Here are some of the questions. Please argue that these are “routine” questions.

    You miss my point. If *everyone* who went through the additional review process was asked these questions, then their is no bias at that particular stage.

    Yes, the questions appear on first glance intrusive — though given the fact that 501(c)4’s are not supposed to directly coordinate with candidates and legislative bodies, they are not quite as intrusive as one might think.

    In your previous post, you suggested that these questions were *only* asked to conservative groups. We currently don’t have enough information to say that is correct. If only conservative groups got those questions, then that’s clearly bias. But if *everyone who was reviewed got those questions* then your issue is with the *review process* NOT bias against conservatives.

    Does that make sense?

    As for 3a and 3b, unless those were coming out of the Cincinnati office, then they are a *different* issue all together. Granted, both involve the IRS, but still they are different. No less worthy of investigation, but shouldn’t be lopped into the case of the review of conservative groups.

    Now if both leaks came from the Cincinnati office, then it’s further evidence that there is something rotten in the State of Ohio, and to Dave Schuler’s point, a sign that a number of Manager’s heads need to roll.

  32. matt bernius says:

    @Jenos Idanian #13:
    On 3b, I just researched the ProPublica story and you are COMPLETELY right to lop it in with your first two questions. Apologies.

    From WaPo:
    ProPublica on Monday reported that the same IRS division that targeted conservative groups for special scrutiny during the 2012 election cycle provided the investigative-reporting organization with confidential applications for tax-exempt status.
    [Source: http://www.washingtonpost.com/blogs/federal-eye/wp/2013/05/14/irs-released-confidential-info-on-conservative-groups-to-propublica/ ]

  33. SKI says:

    @Doug Mataconis:

    Toobin is wrong about one point. 501(c)(4)’a can endorse candidates. Also, his argument would make sense if not for the fact that the IRS was specifically only targeting organizations from one side of the political aisle. This wasn’t a content neutral investigation.

    Do we know this? And if so, from where?

  34. matt bernius says:

    One more thought as I’m digesting the Pro Publica story…

    From WaPo (link above) – ProPublica reported that the Lerner’s division released “nine pending confidential applications of conservatives groups” in response to a request from the investigative-reporting organization for the applications of 67 nonprofits in November 2012.

    This was in response to a public request. So it wasn’t exactly a 1:00am secret email. The question remains as to whether or not this is simply a case of incompetence (not understand the rules) or intentional/criminal malfeasance.

    Of course, incompetence isn’t a good defense, but it sets up a different situation than the other possibility.

  35. SKI says:

    3. I have to wonder if this won’t bring down AG Holder (not very insightful, I know).

    Probably not as Holder had recused himself long before the decision to obtain the records was made.

  36. wr says:

    @Tony W: “Like any audit, there’s no harm if everything is legit.”

    Actually, there is harm from an audit if everything is legit, because they can be quite expensive and time consuming.

    These, however, were not audits. They were requests for information in regards to an application for non-profit status.

  37. Jenos Idanian #13 says:

    @Modulo Myself: Also, I did a bit of Googling about Goolsbee and Crossroads and think that you mean Goolsbee and the Koch brothers.

    You’re absolutely right. There are so many “stories” at play, you (or at least I) can’t tell them apart without a scorecard.

    1) Goolsbee publicly divulged information from the Koch brothers’ tax returns, information he had no right to access in the first place.

    2) Crossroads GPS had their confidential information published by ProPublica, information from Crossroads’ application for tax-exempt status that is supposed to be private unless and until it is approved.

    3) ProPublica also got the confidential pending applications of several other groups, and published them as well.

    The common thread: people who should not have access to confidential IRS records getting them, and publishing them. Records of conservative groups, released by Obama administration officials or allies.

  38. grumpy realist says:

    @Jenos Idanian #13: Jenos, do you even understand the term “tax protester”?

    Do you realize that the IRS has to deal with these goofballs all the time?

    Can you possibly get it through your brain that it might be possible that the IRS thought that these groups on the right were tax protestor groups because a) they had the same sort of name as a lot of tax protestor groups, and b) because they sounded like a whole bunch of tax protestor groups?

  39. matt bernius says:

    Ironically, thanks to the Pro Publica article, we also know that at least some of the Tea Party/Conservative groups who were targeted for additional information, did end up receiving their 501(c)4 status.

    See, for example, the case of Karl Rove’s Crossroads GPS – http://www.propublica.org/article/what-karl-roves-dark-money-nonprofit-told-the-irs

  40. Jenos Idanian #13 says:

    @grumpy realist: Yes, I understand the term “tax protester.”

    Do you realize that you’re making excuses for the feds before they even try to make their excuses? Instead of waiting for them to explain themselves, you’re imagining what they might say in their own defense and putting it forth.

    There’s nothing inherently wrong about that — but it should be acknowledged.

  41. anjin-san says:

    One of the noteworthy aspects of this story, at the OTB level at least, is the number of Democrats calling for any necessary investigation to determine wrongdoing and firings of any guilty parties.

    I don’t remember similar calls from the right, say during the US attorney scandal when Bush was president. Of course, I could have a selective memory on this.

  42. matt bernius says:

    I’d suggest that everyone read ProPublica’s report on this story:
    http://www.propublica.org/article/irs-office-that-targeted-tea-party-also-disclosed-confidential-docs

    For the record, it should be noted that (a) some of ProPublica’s requests were denied, (b) 22 groups had received approval, meaning that their documentation was public, and (c) upon realizing the mistake, the IRS told ProPublica not to disclose information about the remaining 9 groups.

    From Pro Publica:
    In response to a request for the applications for 67 different nonprofits last November, the Cincinnati office of the IRS sent ProPublica applications or documentation for 31 groups. Nine of those applications had not yet been approved—meaning they were not supposed to be made public. (We made six of those public, after redacting their financial information, deeming that they were newsworthy.)

    […]

    After receiving the unapproved applications, ProPublica tried to determine why they had been sent. In emails, IRS spokespeople said ProPublica shouldn’t have received them.

    “It has come to our attention that you are in receipt of application materials of organizations that have not been recognized by the IRS as tax-exempt,” wrote one spokeswoman, Michelle Eldridge. She cited a law saying that publishing unauthorized returns or return information was a felony punishable by a fine of up to $5,000 and imprisonment of up to five years, or both.
    [Source: http://www.propublica.org/article/irs-office-that-targeted-tea-party-also-disclosed-confidential-docs ]

    Unfortunately, ProPublican does not mention how many of the 9 applications that should not have been released ultimately passed. At least one of them — Crossroads GPS — was ultimately approved.

  43. Charles Austin says:

    Remember when something just had to be investigated because of the seriousness of the accusation? Now, after a flood of information, Dr. Taylor is willing to go out on a limb with, “there could be a legitimate issue here.”

    Awesome. I’ll go back into seclusion now.

  44. wr says:

    @Jenos Idanian #13: “Do you realize that you’re making excuses for the feds before they even try to make their excuses? Instead of waiting for them to explain themselves, you’re imagining what they might say in their own defense and putting it forth. ‘

    What an outrage, when GR should be jumping to the conclusion that there’s a vast conspiracy run directly out of the Oval Office, just as you are. Pretty f-ing irresponsible of GR, I must say.

  45. @Charles Austin:

    Remember when something just had to be investigated because of the seriousness of the accusation?

    Actually, I have always thought that the “seriousness of the accusation” by itself is a lousy standard by which to launch an investigation. Person A could accuse Person B of cooking children into pies and eating them for dinner. That is a pretty serious allegation, what with the murder and cannibalism and all. However, some evidence is needed, in my opinion, to make the charge. The seriousness is not the issue as much as is the combination of the seriousness of the charge coupled with some evidence to support said charge.

  46. John425 says:

    The Tea Party and the AP issues are merely part of the larger picture of corruption and an “enemies list” by the “Democrats-turned Nixonians”.

    New components include the IRS monitoring pro-Israel groups, info leaks to liberal blog groups and now we have stories that the EPA gave favorable fee-waivers to friendly “Green” groups but not to others.

    Now add in Obama and Hillary’s notions that Benghazi is a “distraction” and you have an Administration with no regard for American liberties.

  47. matt bernius says:

    @John425:

    the EPA gave favorable fee-waivers to friendly “Green” groups but not to others.

    A mischaracterization. “Conservative Groups” also received EPA FOIA filing fee waivers, just not a the same rate as pro-ecological groups.

    The devil, is as always in the details.

    The Tea Party and the AP issues are merely part of the larger picture of corruption and an “enemies list” by the “Democrats-turned Nixonians”.

    BTW, for the record, the Nixon whitehouse, nor the agencies involved, never willingly disclosed the existence of Enemy’s Lists. Which get’s to once of many significant differences between the current situation and what happened under Nixon.

    This isn’t a justification for not investigating the current complaints. Just a reminder that a lot of the comparisons to Watergate are not particularly historically accurate.

  48. Jenos Idanian #13 says:

    @wr: You really like showing off how stupid you are, don’t you?

    The opposite of “jumping to conclusions” is NOT “jumping to opposite conclusions.”

    Of course I have my own theories, but I haven’t offered them. Nor do I intend to at this time. Right now, I’m comfortable asking questions and pointing out inconvenient facts. There will be plenty of time for conclusions later — as long as the questions are asked — and answered.

    Actually, not even necessarily answered. Sometimes non-answers can be just as responsive.

  49. @John425: Apropos of (@the above: I would note that

    The Tea Party and the AP issues are merely part of the larger picture of corruption and an “enemies list” by the “Democrats-turned Nixonians”.

    is a serious accusation.

    However, at the moment it is wanting for evidence to support making the charge.

  50. Grewgills says:

    A 501(c)(4) organization’s net earning must go toward charitable, education or recreational purposes.

    That seems rather unlikely to apply to the tea party groups unless you count political rallies and political commercials as charitable education and that seems a stretch.

  51. Jr says:

    This isn’t a justification for not investigating the current complaints. Just a reminder that a lot of the comparisons to Watergate are not particularly historically accurate.

    We all know that, even John Dean called the comparisons to be lousy. But hell, idiots will continue to make the comparison since it is a nice buzz word that garners attention even though it is factually inaccurate.

  52. Jr says:

    BTW, for the record, the Nixon whitehouse, nor the agencies involved, never willingly disclosed the existence of Enemy’s Lists. Which get’s to once of many significant differences between the current situation and what happened under Nixon.

    Bingo.

    If the White House had any thing to do with this, it would have never gotten out this way.

  53. wr says:

    @Jenos Idanian #13: “Of course I have my own theories, but I haven’t offered them”

    Oh, please. You’re aggregating lists of various incidents with the insinuation that they are all linked by conspiracy. You can play dumb if you want, but your protestations of innocence are no more convincing than you “Oh, no, I’m not saying I believe the birthers, I’m just reciting everything they say, because if they’re not true than all Obama has to do it release his birth certificate” crap.

    We all know you’re going to troll. Why not be an honest troll?

  54. wr says:

    @Jr: “But hell, idiots will continue to make the comparison since it is a nice buzz word that garners attention even though it is factually inaccurate. ”

    Actually, I suspect they’re desperately afraid this won’t amount to much. So they’ve got to make sure enough people believe it’s Watergate before the truth comes out that the truth doesn’t matter. See: Benghazi.

  55. Jenos Idanian #13 says:

    @wr: You can’t even keep your delusions straight. I wanted the birthers to shut up and go away from day one.

    And yes, I’m citing incidents. You’re the one jumping to conclusions to argue that they’re unconnected and completely random and incidental.

    There is an indisputable pattern here. Political opponents of the current administration have been harassed, discriminated against, and harmed through illegal actions. Perhaps it’s just coincidence, perhaps not. I want to find out which.

    Unsurprisingly, you want to preserve your ignorance. I don’t see why; it’s not like you have a shortage of ignorance that you can’t afford to lose any.

  56. anjin-san says:

    But hell, idiots will continue to make the comparison

    We will be treated to a lot of Watergate buzzwords “select comittee” “stonewalling”, and so on.

    Well, Republicans can either play this sad little game, or they can try and deal with our actual national problems. Guess which they will choose.

    They sure as hell don’t want to talk about the deficit, which is shrinking much more quickly than expected, the recovering real estate market, the fully recovered stock market, or declining health care costs…

  57. john personna says:

    @John425:

    The Dems probably preferred the Benghazi distraction.

  58. PD Shaw says:

    @matt bernius: I think that’s a pretty good link to a summary of all of the permissible 501(c)(4) political activities. I personally don’t think Toobin knows much of what he’s talking about here. Here are some of my assumptions:

    1. A 501(c)(4) organization is not required to apply for approval from the IRS (unlike 501(c)(3) status). Those that do so are being cautious; I wouldn’t assume that they are being sneaky.

    2. There is no organizational test for “social welfare” organizations; its probably almost impossible to know at the point of initial formation whether the organization will exceed its authority until they have actual expenditures.

    3. My expectation is that an application for 501(c)(4) recognition is a ministerial function that should take no longer than a few minutes to review, unlike a 501(c)(3) application which is more complex and important, which should take several months. I would expect a review to make sure all of the blanks are filled and the form is signed and the check is good. I might expect a secondary review in case someone has written something that makes it impossible to approve. (The purpose of my organization is to kill the President)

    4. If I am correct about 3, I am not satisfied with any evidence that most of the applications were ultimately approved. Asking an excessive number of questions that are unlikely to bear on whether the application would be approved or not, is chilling.

    5. Whether an application is approved or not, the social welfare organization has to file a return five-and-a-half months after the end of the fiscal year (with an automatic three month extension available if requested). This timing may explain some of the inconsistencies from the IRS; they were looking at organizations forming around 2010, but had insufficient information at the time, and they were still looking at them in 2012 as the first returns came in.

    6. Its not always a question of whether a 501(c)(4) can engage in a political activity, its probably more important to the IRS as to whether that activity is taxable to the social welfare organization.

  59. John D'Geek says:

    @SKI: Well, if you don’t want to trust a lawyer (oops, “Trust a Lawyer” is an Oxymoron. Sorry.), then try Wikipedia:

    501(c)(4) organizations may lobby for legislation, and unlike 501(c)(3) organizations they may also participate in political campaigns and elections, as long as its primary activity is the promotion of social welfare.

  60. wr says:

    @Jenos Idanian #13: “There is an indisputable pattern here. Political opponents of the current administration have been harassed, discriminated against, and harmed through illegal actions. Perhaps it’s just coincidence, perhaps not. I want to find out which”

    Hey stupid,

    Either there’s “an indisputable pattern” or there’s a set of unrelated issues that you are lumping together because this is the way you can make the administration look bad — oh, sorry, a “coincidence.” It can’t be both. You are stating it’s a pattern. An indisputable pattern. And then you’re claiming that you’re keeping an open mind.

  61. John D'Geek says:

    @anjin-san:

    They sure as hell don’t want to talk about the deficit, which is shrinking much more quickly than expected, the recovering real estate market, the fully recovered stock market, or declining health care costs…

    Off Topic and extremely debateable. The numbers look better, but that doesn’t mean that things are better. Take the stock market for instance — is it an indicator of things getting better? Or is it the “giddy before the crash”?

    I’ll stop there …

  62. Jenos Idanian #13 says:

    @wr: “Patterns” doesn’t necessarily mean by design. Zebra stripes are patterns. Planetary orbits are patterns. Hell, the Kennedy-Lincoln parallels are patterns, and we had the “20-year curse” that killed every president from 1840 through 1960 (and only presidents elected in zero years), and Reagan nearly died from an assassination attempt, and that was just coincidence.

    You spout more than enough stupid things. Don’t try to put any in my mouth.

    And back on topic: there is an indisputable pattern here. We need more information before we determine if it was a deliberate pattern or not.

  63. John D'Geek says:

    @PD Shaw: I can’t quote the PDF (select doesn’t want to work right), but if I read this IRS document properly all non-profits must apply. And it’s quite trivial to loose your tax-exempt status.

  64. stonetools says:

    This is my ideal IRS response:

    “Hell yes, there has been a problem with reviewing these applications. What we are going to do is start from zero and review ALL these applications, large and small. And if we determine that particular groups have primarily engaged in political activity, we will revoke the status of ALL these organizations, regardless of the ends to such which activity was directed.”

  65. becca says:

    From what I gather, after Citizens United, there was quite an avalanche of applications by a bunch of TP types. Did Congress ensure the IRS was properly staffed to withstand the doubling of apps? I thought not.

    My money says a large percentage of these little groups are more about grifting than anything else. Grifters gotta grift and CU handed them the keys to Congress.

  66. anjin-san says:

    @ John D’Geek

    Mentioning that the GOP is making mountains out of molehills in an attempt to create a “scandal plagued Obama administration” meme while utterly ignoring actual good news may be a tangent, but I don’t feel it is off-topic. Conservatives have a political agenda here, and that is worth discussing.

  67. PD Shaw says:

    @John D’Geek: I could always be operating from an incorrect assumption, but one source I’ve relied upon is the IRS response to Carl Levin’s concerns about this issue:

    Why does the IRS allow 501 (c)(4) organizations to self-declare?

    The Internal Revenue Code expressly provides that certain tax-exempt organizations must give notice to the IRS, by filing an application for exemption, in order to claim tax-exempt status. The Internal Revenue Code does not require an organization to provide notice to the IRS to be treated as described in section 501(c)(4). By contrast, for example, Section 508 generally requires an organization to provide notice to the IRS before it will be treated as described in section 501(c)(3).

    b. When an organization “self declares” as a 501 (c)(4) organization, how does the IRS get notice and how long does it take the IRS to conduct the review to ensure that the organization has classified itself correctly?

    As with other tax exempt organizations, organizations claiming to be tax-exempt under section 501 (c)(4) generally are required to file a Form 990 on an annual basis. . . .

    I think your link goes to a lot of different types of organizations, not just 501(c)(4)s.

  68. john personna says:

    @PD Shaw:

    The issue is in a sense misfiling (and misidentifying) as 501(c)4

    Perhaps their proper classification did require filing.

  69. edmondo says:

    There’s no way the Republicans would impeach. If Obama is removed from office then a Democrat would replace him in the White House

  70. Moosebreath says:

    @edmondo:

    “There’s no way the Republicans would impeach. If Obama is removed from office then a Democrat would replace him in the White House”

    That wasn’t a reason for them to avoid impeaching Clinton, was it?

    On the substance of the IRS issue, my feeling is that this is on the surface very ugly, and needs investigation and firing the people whose idea this was, and anyone who permitted it to occur. I’ll hold off reaching conclusions on who that is until we know more.

    On the AP search, this goes back to the old line that the scandal isn’t what’s illegal, it’s what’s legal. As near as I can tell, the broad outlines of this search were legal, which is awful, and I’d be in favor of changing the law to make it not so. I have no knowledge whether all the i’s were dotted and the t’s crossed, and think that should be investigated.

  71. PD Shaw says:

    @john personna: One of my other assumptions is that organization of not-for-profits is a matter of state law. The IRS is concerned about federal taxes, and they are not going to ever give a 100% pre-approval that your social welfare organization will operate without tax consequences.

  72. grumpy realist says:

    @Jenos Idanian #13: No, I’m not making excuses for the Feds before they make their defense. I just happen to know a lot of bureaucracy and have had to deal with the brain-dead idiots called Tax Protestors.

    I know you want to believe in some over-arching conspiracy, but remember Napoleon’s comment about never ascribing to malice that which can be adequately explained by incompetence.

    I also point out that all of this stuff seems to be out of one IRS office, so maybe it’s a little early to start dragging out the tumbrils, hmmm?

  73. matt bernius says:

    @PD Shaw:
    Through analysis as always. IANAL, but couple points:

    A 501(c)(4) organization is not required to apply for approval from the IRS (unlike 501(c)(3) status). Those that do so are being cautious; I wouldn’t assume that they are being sneaky.

    I believe this is the case. And it should be noted that we learn in part from ProPublica that Crossroads GPS, for example, operated for YEARS as a 501(c)4 before receiving official status (note that the so called “leak” happened *after* Obama’s reelection).

    3. My expectation is that an application for 501(c)(4) recognition is a ministerial function that should take no longer than a few minutes to review, unlike a 501(c)(3) application which is more complex and important, which should take several months. I would expect a review to make sure all of the blanks are filled and the form is signed and the check is good. I might expect a secondary review in case someone has written something that makes it impossible to approve. (The purpose of my organization is to kill the President)

    Historically, I believe this to be the case. From what I understand the framework, if not the form, of the 501(c)4 is nearly 100 years old. However, the type of organizations that applied for the status has changed radically in the last decade. And typically when those changes occur — especially rapidly — bureaucracies struggle to keep up.

    The *you’re allowed to be political, but not TOO political* aspect of a 501(c)4 seems to be exactly the sort of thing that screws up the process (much like some designations of “disabled” in Social Security Cases). And that is what could potentially trigger the reviews that have been described.

    * ANTI-“LIBERAL-BIAS”-NOTE – What I described above is *exactly* where managers should step in for clarification… doesn’t seem like that happened here. *

    4. If I am correct about 3, I am not satisfied with any evidence that most of the applications were ultimately approved. Asking an excessive number of questions that are unlikely to bear on whether the application would be approved or not, is chilling.

    I agree with the sentiment, but the issue in my mind is whether or not this was an “intentional” (and possibly criminal) chill or simply a Weberian incompetence issue (if you will). Neither reflects well on the IRS, but the remedies for each are quite different.

  74. Jenos Idanian #13 says:

    @grumpy realist: I also point out that all of this stuff seems to be out of one IRS office, so maybe it’s a little early to start dragging out the tumbrils, hmmm?

    At least one of the Tea Party groups was asked to fax their documents to a 202 area code — that’s DC. And the Chief Counsel was aware of this for the last two years, and his office is in DC. It may have been “out of one IRS office,” but the higher-ups were thoroughly in the loop.

    I agree with you on that aphorism, but my credulity is apparently a bit lower than yours. I’m not satisfied with coming up with plausible explanations and saying “that’s probably what happened.” I want the people who actually carried out these actions to answer for them.

    And when they do something this blatantly wrong, i want the responsible parties to pay for their misdeeds. To the full extent.

    Since you quoted Napoleon, I trust you’re familiar with the phrase “pour encourager les autres?” That’s what I want done to the politicized paper-pushers who screwed the pooch here (figuratively) drawn and quartered.

    This kind of IRS dicking around was one of the grounds for the planned Nixon impeachment.

  75. MarkedMan says:

    So, now conservatives and progressives are in agreement? Targeting someone because they are a member of a group is wrong? Even if it is shown that the membership of that group violates the law at a much higher rate than the average?

    And all you conservatives promise that when we have memberships of a group you don’t like targeted you will be equally outraged?

  76. anjin-san says:

    Even if it is shown that the membership of that group violates the law at a much higher rate than the average?

    What happend to the presumption of innocence?

  77. matt bernius says:

    @Jenos Idanian #13:

    At least one of the Tea Party groups was asked to fax their documents to a 202 area code — that’s DC.

    Source? As the dates of when this happened could actually make sense, if it occurred in the last few months.

  78. MarkedMan says:

    @anjin-san: My comment about groups that had a higher incidence of guilt was meant as humorous.

    But now that it’s been established that’s not gonna work, let’s look at a more interesting question. It seems to me that Conservative groups routinely game the system. In the congress, if a bill is titled “The Workers Rights Preservation Act” and it is offered by conservatives of either party, you can pretty much guarantee it was written by the worst corporate actors in the nation with the sole intent of helping them screw their employees. If you find a group called “The Citizens United Action Committee Against Pollution” and you look under the covers, chances are it’s a bunch of conservative lobbyists masquerading in order to kill regulations to remove mercury from coal emissions, or lead from electronics waste. Bottom line, conservatives have a history of using the words “Citizen”, “Workers”, “Patriot” etc as cover.

    Given this, why shouldn’t a government worker who targets groups with “Patriot” or “Tea Party” in their name be lauded instead of vilified? Don’t we encourage cops to ask that extra question, to push harder against known bad actors? And sure, the average Tea Party member is almost certainly not guilty of this BS, but that’s not what we’re talking about here. We’re talking about a person sophisticated enough to create these groups and take advantage of their tax free and disclosure free nature. The fact that they use “Tea Party” in their name has little bearing on what they are actually for.

    Personally I would prefer doing away with all tax such groups. But if we are not going to do that, lets go after the most egregious violators. Conservative groups including “non-partisan” mega churches, synagogues and mosques who regular tell their members who to vote for.

  79. Jeremy says:

    @matt bernius: Considering all the information indicates that the IRS was targeting conservative applicants, it is then reasonable to assume that they were not giving the same treatment to liberal groups, correct?

    I was using CAP and the Sierra Club as stand-ins for any new liberal 501(c)(4) organizations, of which I don’t know if they were being created (but I assume there had to be some.)

    Maybe you should pay more attention to the details instead of making yourself and your 16 upvoters look like fools.

  80. john personna says:

    Keven Drum has a good one: IG Report Says IRS Has No Idea What Its Own Rules Mean

    He says:

    Did you get get that? IRS regs say that 501(c)4 groups can’t primarily be engaged in political activity. Instead, their “primary activity” has to be social welfare.

    The distinction was the one I expected above, but the difficulty in making the distinction is as we’ve all said, somewhat fraught.

    At some point you probably have to just say that political groups are doing their idea of social welfare and let them all into tax free status.

  81. john personna says:

    @Jeremy:

    The Sierra Club has a “social welfare” mission very distinct from a political movement. Or put differently, they don’t care what party you are in if you save the trees and owls.

    [some “politics” vs “welfare” calls may be close, but that one is not]

  82. G.A.Phillips says:

    They sure as hell don’t want to talk about the deficit, which is shrinking much more quickly than expected, the recovering real estate market, the fully recovered stock market, or declining health care costs…

    lol…

    What happend to the presumption of innocence?

    Ask Bush…

  83. PD Shaw says:

    @john personna: A tax-exempt organization is still subject to taxes on its political campaign activities. There is a false dichotomy in assuming that an organization is either a social welfare organization exempt from taxes or its not. A social welfare organization that spent a lot on political campaign activities would receive little benefit from its tax exempt status.

  84. john personna says:

    @PD Shaw:

    You are saying that a non-profit would collect a pool of donations, and then depending on whether a specific picnic was “campaign” or “public education” they would go back and mark the money flow?

    I kinda get that, but I think right now I can mark my donation to the Sierra Club straight up as tax deductible, and that is what these Tea Party groups wanted as well.

  85. PD Shaw says:

    @john personna: The Sierra Club has a public charity (501(c)(3)) that you donate to, which is involved in educating people about the environment. Your contributions to it are tax deductible.

    The Sierra Club keeps a separate segregated account for its political/ lobbying agenda, which is operated as a social welfare organizations under (501(c)(4)). Contributions to this part of the Sierra Club is not tax deductible. Any political campaign activity expenditures would be subject to federal taxes.

  86. PD Shaw says:

    @john personna: Also, a social welfare organization is required to file what I would call a tax return, detailing their expenses. Its actually called an annual return, form 990, or for smaller groups, its a 990-EZ.

    So, let’s say a tea party organization spends $250,000 to run a campaign ad. The IRS will want to see it; if it expressly advocates the election of an individual, then the tax-exempt organization has $250,000 in taxable income.

  87. John D'Geek says:

    @MarkedMan: I probably shouldn’t be Feeding the Troll, but on the off chance you were serious:

    Profiling — which is what you’re talking about — has serious issues with it. I won’t go over the whole list, since I’m sure a quick search will find Blog Entries right here on OTB that cover it better than I can. But whether it’s Racial Profiling or Political Profiling, it’s BAD(TM). And not “Michael Jackson Bad”(TM).

    Re: Political Whack-a-Mole

    Yes, some Conservatives are playing “create a scandal” (aka “Political Whack-a-Mole”), but (some) Liberals do the same thing. They’ve been doing it since at least the Nixon administration (which, as I recall — correct me if I’m wrong Dr. Taylor — is when the “respect for the presidency” notion that prevented such thing in previous administrations evaporated). Politically Correct naming of a social and/or polical organization? Naturally. And — yes — both sides do it. “National Organization for Women” sounds much better than “National Organization of Feminists”.

    While I agree that there’s plenty of smoke-and-mirrors going on, I don’t agree that what you listed — economic issues — is representative of that. There are plenty of valid questions about hte economy — if you’re really interested, Business Insider has a great article on Monetarists vs. Keynesians today. Not sure who’s winning that debate, apparently, but it’s a huge deal. If Monetarists are correct, then the idiots are congress is doing just fine.

  88. matt bernius says:

    @PD Shaw:
    Correct as I understand it. However — and this is where the Tea Party things gets dicey is that *some* organizations function as much as a *political party* as a social welfare organization. So it’s understandable that might confuse some.

    @Jeremy:

    Considering all the information indicates that the IRS was targeting conservative applicants, it is then reasonable to assume that they were not giving the same treatment to liberal groups, correct? [Emphasis Mine]

    No. You just made an unconnected leap — namely that targeting one sector of 501(c)4 organizations inherently means that they didn’t target other sectors at the same relative rate.

    It might turn out that is the case, but that will only be proved when more data is released.

    BTW, a redacted version of the Audit is now available:
    http://www.propublica.org/documents/item/700658-201310053fr-revised-redacted-12

  89. @John D’Geek:

    (which, as I recall — correct me if I’m wrong Dr. Taylor — is when the “respect for the presidency” notion that prevented such thing in previous administrations evaporated

    A combination of the failures in Viet Nam and the very real scandals around VP Spiro Agnew and President Nixon contributed heavily to the change in climate. (Throw in, too, an evolving media environment). The 1970s, in general, led to a great deal of frustration with politics and officeholders (recessions, oil crises, and stagflation didn’t help any).

  90. john personna says:

    @PD Shaw:

    Let’s flip it then, what kind of activities are the Tea Party groups trying to classify as public service, and how many are borderline (to say the least)?

  91. john personna says:

    Would any Tea meetings for voter education be an rigorously neutral as the League of Woman Voters? Or is any meeting honestly a campaign?

  92. john personna says:

    @matt bernius:

    Right. One might ask, if Teas can classify some of their work social welfare, why not the major parties?

  93. Scott says:

    @john personna: To put the IRS in the position of determining something as vague as “social welfare” in a context of political activity is just asking for trouble. And now we have it. Guess what? It all goes back to Congress and the making of laws of such complexity that breaking such laws are an inevitability

  94. Barry says:

    @Doug Mataconis: “Toobin is wrong about one point. 501(c)(4)’a can endorse candidates. Also, his argument would make sense if not for the fact that the IRS was specifically only targeting organizations from one side of the political aisle. This wasn’t a content neutral investigation. ”

    I don’t believe that that’s been proven, or admitted. What we know is that certain key words triggered audits and demands for more evidence.

  95. On Holder says:

    @SKI:

    For the record, AG Holder claimed he recused himself, in fact a recusal by the AG by law MUST be in writing with the reasons for recusal clearly defined.

    Holder did NOT recuse himself in writing ergo no recusal was made.