While the IRS scandal manages to blind Americans to more serious problems, like Keystone Pipeline leaks, the sequestration budget cuts and two very scary new viruses, a little secret was deliberately kept. The IRS targeted a total of 471 groups in a crackdown on politically active nonprofit groups, including at least three Democratic-leaning organizations. While none of the Republican groups had their tax-exempt applications denied, Emerge America had its application rejected and gave up on its nonprofit application. Progress Texas and Clean Elections Texas also got extra attention. Late yesterday, the IRS released a statement saying the agency created a pool of politically active nonpartisan applicants. A “minority” of those groups were included because of keywords in their names. The pool, according to a May 15 Bloomberg article, included organizations of all political views, not just the Tea Party.
In other words, the Tea Party groups were not the only politically oriented groups to undergo extra scrutiny when applying for tax exempt status. It is clear that the crackdown, right or wrong, went far beyond any Tea Party outfits. Clean Elections Texas is part of a nationwide effort to support public funding of campaigns. Emerge America is an organization for Democratic women leaders. Progress Texas is a progressive organization in that state.
None of the Republican groups said their applications were rejected while Emerge America had its status denied, was forced to disclose its donors, had to incorporate under another part of the tax code, and had to pay some taxes. Some groups gave up on trying getting nonprofit status. Others found the IRS prying into lists of donors, the organization’s missions and worse.
Not all of Congress is outraged to hear that the IRS has put political groups under more scrutiny. Some lawmakers and campaign finance watchdog groups want to expand congressional hearings to take a look at everything the IRS is doing concerning nonprofits. The big question is whether such groups should even be allowed to spend money on political efforts. The other big question is why Tea Party groups were presented as the sole recipients of extra scrutiny.
The major problem is that such groups can use 501(c)(4) nonprofit statuses to influence elections. Such groups can conceal the identities of those who contribute money. The tax exempt status keeps such organizations from being held accountable for funding political ads that are vicious, misleading, deceitful or otherwise unfair.
In other words when Lois Lerner, the official in charge of overseeing tax-exempt groups focused on Tea Party groups, but the IRS will now be under fire for getting out of hand with a lot more than Tea Party activist groups.
The May 14 Inspector General’s report concluded that “ineffective management” allowed the inappropriate criteria to be developed and kept in place for more than 18 months. While an investigation should ensue, the Benghazi and IRS embarrassments have turned into partisan House Republican sideshows that draw attention and resources away from far more pressing problems.