Is the IRS Inspector General Himself Partisan, Or Is He Just Stupifyingly Clueless About the Law?

After the tax agency was denounced in recent weeks by President Obama, lawmakers and critics for what they described as improper scrutiny of at least 100 groups seeking I.R.S. recognition, The New York Times examined more than a dozen of the organizations, most of them organized as 501(c)(4) “social welfare” groups under the tax code, or in some cases as 501(c)(3) charities. None ran major election advertising campaigns, according to the Campaign Media Analysis Group, the main activity of a small number of big-spending tax-exempt groups that emerged as major players in the 2010 and 2012 elections.

But some organized volunteers, distributed pamphlets and held rallies leading up to the 2010 elections or the 2012 presidential election, as conservatives fought to turn out Mr. Obama.

A report issued this month by the Treasury Department’s inspector general, J. Russell George, found that inappropriate criteria, including groups’ policy positions, were used to flag some cases and that specialists in the I.R.S. office in Cincinnati, which reviews all tax-exemption requests, sometimes asked questions that were irrelevant to the application process.

And agency officials have acknowledged that specialists inappropriately used keywords like “Tea Party” and “Patriots” in searching through applications.

But some former I.R.S. officials disputed several of [I.G. J. Russell] George’s conclusions, including his assertion that it was inappropriate to ask groups about their donors, or whether their leaders had plans to run for public office. While unusual, the former officials said, such questions are not prohibited if relevant to an application under consideration.

“The I.G. was as careless with terminology as the Cincinnati office was,” said Marcus S. Owens, who headed the I.R.S.’s exempt organizations division until 2000. “Half of those questions have been found to be germane in court decisions.”

Groups Targeted by I.R.S. Tested Rules on Politics, Nicholas Confessore and Michael Luo, New York Times, May 26

I had planned to post on the Times story but haven’t had the time this week, and Linda Beale’s terrific post this morning would make an in-depth one by me redundant.  But I do want question, explicitly, the inspector general’s own competence, and maybe even his own political biases.  What struck me most about the Times story is its indication that the I.G. himself apparently is ignorant of the relevant law, particularly of some relevant court decisions; that his report apparently does not attempt to reconcile the specific actions of some of these groups with the law’s limiting of 501(c)(4) status to groups that do not electioneer; and that the investigation (apparently) did not attempt to determine whether groups with conservative-sounding names were “targeted” for further inquiry at a higher rate than groups with with liberal-sounding names.

If there were a significantly higher number of applicant conservative groups than applicant liberal groups, or if applicant conservative groups more often use political-sounding names than applicant liberal groups do, then–in light of the body of actual law pertaining to 501(c)(4) status–these statistics, it certainly seems to me, should have been featured in the report, and then widely reported by news organizations.

But instead, the I.G. started–and therefore finished–with the mistaken legal premise that political groups, groups whose very purpose was to electioneer, were entitled to 501(c)(4) status. This itself is stunning. From time to time, there are indications that an inspector general has deliberately skewed an investigative report or an investigation itself.  But I’ve never before heard of an inspector general who appeared unknowledgeable about the law relevant to the agency or department that his or her office was charged with inspecting upon receiving triggering information.

It would be nice now if Obama, having already expressed his outrage at the indication of political targeting by that IRS division, would now fully explain to the public what the relevant law actually is; that Democratic-leaning electioneering groups were targeted, too; why the groups that were targeted were targeted; what some of these groups actually do; and the real reason that these groups, whether Republican-leaning or Democratic-leaning, applied for 501(c)(4) status: to be able to hide the identity of the electioneering organization’s donors.

Obama, of course, won’t do that.  His primary goals throughout his presidency have been to please centrist pundits and try to tamp down on the virulence toward him from the right.  But any self-styled centrist pundit who would attack him for explaining the law and mentioning what the targeted organizations really do–that is, what exactly “targeting” meant here–is, by definition, no centrist.  And it’s painful to think of how much more successful this administration would have been all along, and how many serious mistakes it would have avoided, had Obama not dedicated himself so thoroughly to trying to assuage the unassuageable.  And that includes the political pundits of the studiously-centrist variety.

But the Senate Democrats should hold a hearing to make the points about the Times article makes.  The Times article provides a good starter witness list–including Inspector General George–and the names of some of the political organizations, Republican-leaning and Democratic-leaning, that inappropriately filed 501(c)(4) applications, and whose officers should be subpoenaed to testify.

The purpose would be to clarify for the public what the law is now and why–why–groups whose raison d’être is openly partisan want the 501(c)(4) designation, and, in doing so, enlist public support for a new campaign-finance law with specific guidelines concerning public disclosure of donors to political-campaign groups irrespective of their IRS tax status.  And along the way maybe we would learn why, pray tell, the inspector general thinks current law permits (requires?) the IRS to authorize these overtly partisan groups to keep their donors’ identities secret.  That alone would be worth the trouble.

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