The IRS scandal has its fall guy in acting commissioner Steven Miller. Miller was never actually involved with the decision to single out conservative groups like the Tea Party, but he's convenient and disposable. The Inspector Generals report by the Treasury Department found that no one outside the IRS had contributed to the now famous "Be On the Lookout" guidelines. This scandal has raised new questions and concerns regarding the political activity of 501(c)(4) groups, but those concerns are long overdue.
A 501(c)(4) is a tax exempt organization that is supposed to be operated exclusively for the promotion of social welfare and to "further the common good." The rules on what kind of political activity a 501(c)(4) can engage in are extremely unclear. The IRS website says, "A section 501(c)(4) social welfare organization may engage in some political activities, so long as that is not its primary activity." That couldn't be more vague if it tried. In fact, this clip from The Colbert Report explains them much better than I could, so watch this and then you’ll see the problem with them:
The landmark Supreme Court case of Citizens United v. FEC really paved the way for the explosion of 501(c)(4) groups. It allowed corporate and labor entities to spend unlimited funds while legally being able to register for tax-exempt status. Citizens United is truly the gift that keeps on giving.
The Tea Party should have been singled out, but not because of its political affiliation but because of its political activities. Other groups that should have been targeted by the IRS would include the Dick Cheney-backed Crossroads GPS and former Obama campaign arm Organizing For America. The New York Times pointed out this morning that the original text of the 501(c)(4) statute stated that these groups can only engage in activity that is for the promotion of social welfare.
It's high time that politically-affiliated groups stop hiding behind tax exempt status. As the Colbert clip shows above, they can too easily circumvent disclosing important information about their donors. The IRS should not have to ask themselves which groups should be investigated based on the made-up criteria of a few. Instead, we would all be better served if there were strict, clear, laws regarding these organizations on the books from which no one can equivocate from. One would think that's something we could all agree upon.