I just read this blog by Michael J. Rosen about the extra scrutiny of conservative groups seeking tax-exempt status. I decided to repost his blog with three sets of comments. My comments give thought to three different sets of questions:
- What else besides what we’ve heard about might have helped lead to this “scandal?”
- Is it really a “scandal?” Do we know?
- Is this issue likely to go away soon?
What else might be behind this scandal?
Besides a lack of training and oversight that we’ve heard about, I think another part of this whole problem is the backlog of applications in the non-profit division of the IRS. I talked to them the other day about a non-profit I work with that is attempting to get its 501(c)4 status reinstated due to the 990-N issue. The agent I talked to said that they are getting over 5,000 applications every month and are working on them on a first come, first serve basis.
The IRS website says that with the small staff they have, there is an even greater backlog on applications than what the agent told me. Here’s that IRS statement.
“All [non-profit] applications are sent to the IRS Determinations Office in Cincinnati. This office receives approximately 70,000 applications for tax-exempt status of all kinds each year [that averages out to 5,833 new applicants each month]. This includes applications from section 501(c)(3) and section 501(c)(4) organizations. This office, which includes fewer than 200 people working directly on applications, is primarily responsible for working determination applications.”
The agent helped me to figure out the current status of this VERY SMALL non-profit that I’m working with (if it brings in $400/year for this group, it’s doing well). He told me that the records show that all of the paperwork at our end is basically complete, but the application won’t be reviewed until the office gets to the applications marked as “complete” as of September 2012 (when he says my group officially completed the paperwork). And, directing me to another section of the website, he pointed out that the office is currently working on applications from early May 2012 – i.e., over a 1 year delay in processing!
The aforementioned web page also goes into more detail, from the official IRS viewpoint, of what happened with the Tea Party organizations. It says that approximately 70 Tea Party groups were put into the in-depth “centralized” review; that out of a total of, currently, about 470 organizations being given similar treatment.
Is it a Scandal? Do We Really Know?
A scandal is defined as “a circumstance or action that offends propriety or established moral conceptions or disgraces those associated with it.” A political scandal is “an instance of government wrongdoing” that offends or disgraces those directly associated with that wrongdoing.
In this case, so far, it doesn’t appear to be a scandal that rises to the level of the White House. According to the Washington Post, based on increasing evidence, the IRS issue is very bad press for the Obama administration. According to their report,
If we believe the agency inspector general’s report, a group of employees in a division called the “Determinations Unit…” started giving tea party groups extra scrutiny, were told by agency leadership to knock it off, started doing it again, and then were reined in a second time and told that any further changes to the screening criteria needed to be approved at the highest levels of the agency.
The White House fired the acting director of the agency [this week] on the theory that somebody had to be fired and he was about the only guy they had the power to fire. They’re also instructing the IRS to implement each and every one of the IG’s recommendations to make sure this never happens again.
And from all the evidence obtained so far, there is no evidence of any connection between the “Determinations Unit” and the Obama administration. So unless there is a smoking gun hidden somewhere, there is no political scandal within the White House. Time will tell.
Is this issue likely to go away anytime soon?
No, I personally doubt that the issue will “go away” anytime soon.
- partisan politics to continue attacking Obama’s executive branch;
- long history of spying and intrusiveness; and
- free-speech issues.
The first issue is purely partisan. Issues that Republicans think will make President Obama look bad are brought up again and again even when the public, to some extent (but not the base) has moved on. Has the Benghazi issue died? How many times will the Republican-dominated House vote to revoke Obamacare before they give up?
The second issue is spying and intrusiveness that, for the first time in a long time, concerns both sides of the aisle. There has been a long history of the feds, usually the FBI, targeting non-profits. Think of the Friends (Quakers) peace-related work for example or the Communist-baiting of the 1950s. Usually it’s the more progressive, left-leaning groups that are targeted. These groups have a long memory and I think may, in this case, support the concerns raised in this non-profit scrutiny case. And since there were progressive groups in this list of targeted non-profits, both sides have some ammunition to push back against the actions of the IRS.
The third is a First Amendment issue. Combine these IRS actions with the free press concerns over the Justice Department’s review of press reporters’ phone logs; both sides have screamed NO. What you have here are two different departments of the executive branch allegedly intruding on the First Amendment: one department—the IRS—may be attacking an individual’s free speech rights and another department—the Justice Department—may be attacking freedom of the press. Both protections are contained within the First Amendment of the US Constitution.
So no, based on all three routes of concern, I don’t think this issue will go away anytime soon.
This week, the US Internal Revenue Service acknowledged and apologized for behavior that had long been rumored. The IRS improperly targeted for extra scrutiny conservative groups seeking tax-exempt status.
The IRS did not ultimately deny tax-exempt status to a single group receiving extra scrutiny. Some say this proves that the actions of the IRS were baseless.
The scandal has now shaken the nation’s capital:
President Barack Obama directed Jack Lew, Secretary of the Treasury, to request the resignation of Steven Miller, Acting IRS Commissioner.
Miller resigned and Lew accepted the resignation.
The Justice Department has initiated a criminal investigation.
Exercising its oversight responsibility, Congress has begun its own probe of the IRS scandal.
Obama addressed the nation on television saying, “It’s inexcusable and Americans are right to be angry about it and I am angry about it. I will not tolerate this kind of behavior in any agency, but particularly…
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