The Tea Party Audit

For me, so far, we don’t have the full set of facts, which is why getting the Inspector General’s report – and, in due course, a Congressional investigation – will help us sort out who was responsible and why. But what we do know is bad enough: what appears to be politicized auditing by the IRS in an election cycle. Here’s the best spin Ezra can muster:

The IRS is supposed to reject groups that are primarily political from registering as 501(c)4s … If they’re going to do that, then they need some kind of test that helps them flag problematic applicants. And that test will have to be a bit impressionistic. It will mean taking the political rhetoric of the moment and watching for it in applications. It will require digging into the finances and activities of groups on the left and the right that seem to be political even as they’re promising their activities are primarily non-political.

If we’re not comfortable with that, then we need to either loosen the definition of 501(c)4s or create a new designation that gives explicitly political groups the benefits of the 501(c)4s (namely, they don’t have to pay taxes and they can keep their donors anonymous). But either way, as I wrote on Friday, the only way to make sure this doesn’t keep happening is for the IRS — or the Congress and White House that control it — to make some tough decisions about 501(c)4s.

And here’s the direst political gloss:

Where might an enterprising, public-spirited I.R.S. agent get the idea that a Tea Party group deserved more scrutiny from the government than the typical band of activists seeking tax-exempt status? Oh, I don’t know: why, maybe from all the prominent voices who spent the first two years of the Obama era worrying that the Tea Party wasn’t just a typically messy expression of citizen activism, but something much darker — an expression of crypto-fascist, crypto-racist rage, part Timothy McVeigh and part Bull Connor, potentially carrying a wave of terrorist violence in its wings.

I’d just note here that this is about the weakest link to the president or administration imaginable. The argument is that Obama generated paranoia about right-wing extremists and this caused lower-downs to check right-wing groups more assiduously than others. As Jesse Walker notes:

Douthat is speculating here, and this is hardly the only possible explanation for what happened at the IRS.

Best-case scenario, the employees really were just choosing the most inept and unconstitutional method available to sort the legitimate 501(c)(4) applicants from the fakers. Worst-case scenario, we’re looking at some old-fashioned, deliberate, Kennedy- or Nixon-style political harassment via the taxman. And of course all sorts of combinations of motive are possible, too. I look forward to reading the inspector general’s report, and I hope a serious Congressional investigation follows.

How the always-process-never-principle First Read expects the story to play out:

[T]he IRS news is a political gift to a Republican Party whose base was strained on immigration (remember that Heritage Foundation study?) and even on guns (remember the tough questions Sens. Kelly Ayotte and Jeff Flake were getting?). Now, you’re seeing a GOP base united by two things they absolutely dislike: President Obama and the Internal Revenue Service. The news also is a gift to Republicans like Mitch McConnell, Lindsey Graham, or any incumbent Republican in Washington hoping to avoid a tough primary in 2014 — they get to demagogue the heck out of this story and show they will stand up for the Tea Party.

Yes, this is a real weapon they can use – unlike the idiotic dancing on a pin of the Benghazi fooferaw. But, as the president himself said, that’s not the real issue here. The real issue is who politicized what must remain an apolitical process. Those people and those directly above them need to go – as soon as we have all the facts. Waldman goes into more detail:

The truth is that a great many of the groups that request 501(c)(3) and 501(c)(4) status, of all ideological stripes, are basically pulling a scam on the taxpayers. Maybe that’s a bit harsh, but at the very least they’re engaged in a charade in which they pretend to be “nonpartisan” when in fact they are very, very partisan. For instance, nobody actually believes that groups like the Center for American Progress on the left or the Heritage Foundation on the right aren’t partisan. When there’s an election coming, they mobilize substantial resources to influence it. They blog about how the other’s side’s candidate is a jerk, they issue reports on how his plans will destroy America, and they do all sorts of things whose unambiguous intent is to make the election come out the way they want it to. CAP and Heritage, along with many other organizations like them, are 501(c)(3) charities, meaning as long as they never issue a formal endorsement and are careful to avoid any express advocacy, they can maintain the fiction that they’re nonpartisan (keep getting tax-deductible contributions, which are easier to obtain than those that aren’t tax-deductible).

And that fiction is even more exaggerated when you get to the (c)(4) groups, particularly the new ones. For instance, when Karl Rove’s Crossroads GPS applied for 501(c)(4) status, it explained to the IRS that it was a social-welfare organization for whom influencing elections wouldn’t be its primary purpose.

Like me, Drum sees reason for Republicans to be upset:

Conservative groups are as outraged as liberals would be if the Bush-era IRS were flagging groups with “environment” or “progressive” in their names. So even if, as seems likely, this whole thing turns out to have been mostly a misguided scheme cooked up by some too-clever IRS drones, it doesn’t matter. Conservatives are right to be outraged and right to demand a full investigation. They suspect there might be more to it, and so would I if the shoe were on the other foot. We need to find out for sure whether this episode was just moronic, or if it had some kind of partisan motivation.

What’s really unfortunate about all this is that it will probably put an end to any scrutiny of 501(c)4 groups, and that’s a shame. The IRS should be scrutinizing them, and it should be doing it on an ongoing basis.

Michael Macleod-Ball and Gabe Rottman of the ACLU worry more broadly about selective enforcement of regulations:

Although the IRS claims this was an honest mistake, these revelations are troubling on many levels. For instance, there are several proposals circulating in Washington right now that would make it much easier for the IRS and other regulators to force political groups to disclose their donors. These disclosure requirements would apply even when the group is advocating purely on an issue of public interest, from clean air to abortion, and would apply to groups of all political persuasions and not just to groups supporting or opposing candidates for office.

The ACLU has expressed concern with these disclosure requirements precisely because they open the door to selective enforcement. Such concerns are often dismissed as speculative and overly pessimistic, but the IRS apology shows that concerns over selective enforcement are prescient. Those in power will always be tempted to use political speech restrictions against opposing candidates or causes.

Joe Klein compares Obama to Nixon:

Previous Presidents, including great ones like Roosevelt, have used the IRS against their enemies. But I don’t think Obama ever wanted to be on the same page as Richard Nixon. In this specific case, he now is.

Steve Benen objects to the comparison:

There can be little doubt that some officials in the IRS showed terrible judgment and made inexcusable errors. The need for an investigation is obvious. What’s more, even the way in which the IRS has handled the apology is a mess, quietly making a bumbling announcement on Friday morning, as if that would make the story go away.

But before we start casually accusing the White House of Nixonian tactics based on literally nothing, let’s try to keep our heads on straight. It’s an ugly enough controversy without Beltway pundits turning this into something it’s not.

Amen. A president cannot monitor issues like this on a daily basis – unless he really is Nixon. And Joe’s instinctual reaction last Friday – legitimate outrage – needs to be tempered by what the president said earlier today.

Earlier Dish on the scandal here.