The Internal Revenue Service's scandalous targeting of tea party and conservative groups refuses to die, as one by one the administration's explanations prove untrue.Continue reading.
We were told that the White House, like the rest of the country, learned about the program on May 10 through a planted question asked of then IRS official Lois Lerner at an American Bar Association conference. Turns out the White House knew earlier. We were told the targeting was the work of a few rogue IRS employees in Cincinnati. Then those employees insisted that they were being managed from Washington.
We were told that no political appointees were involved, but now we know the scandal goes at least to the office of Obama appointee and IRS Chief Counsel William Wilkins. We were told that liberal groups were targeted, too. But then the IRS's inspector general, whose report exposed the harassment, clarified that only conservative groups were targeted.
Now the administration line is that the scandal is nonetheless "phony." That assertion is part of a Democratic counteroffensive contending that the tea party and conservative groups applying for "charitable" tax status never should have sought such IRS approval.
Rep. Xavier Becerra (D., Calif.), chairman of the House Democratic Caucus, argued on "Meet the Press" on May 19 that conservative groups were, "under the guise of a charity, [using] undisclosed millions of dollars to do political campaigns." At a May hearing, Sen. Bill Nelson (D., Fla.) claimed that the groups were supposed to spend their money on "charitable activities," and demanded of the IRS, "How could you all in the IRS allow the tax breaks funded basically by the taxpayer [to be spent] on these political campaign expenditures?"
Liberal columnist Jeffrey Toobin has also taken up the theme that the groups were seeking improper tax advantages. Writing in the May 14 issue of the New Yorker, Mr. Toobin argued that if approved by the IRS, the tea party groups would not pay taxes on contributions received. "In return for the tax advantage," he wrote, these groups "must refrain from traditional partisan political activity, like endorsing candidates."
This attack is wrong on the law, and cynical as politics. As these IRS apologists well know, liberal groups, such as Moveon.org, have long had the same tax status as that requested by the tea party and conservative groups—and that status is not of a "charity."
Charities fall under Section 501(c)(3) of the tax code, and they include the Red Cross, Boy Scouts, churches, private colleges and even overtly agenda-oriented organizations such as the NAACP and the Sierra Club Foundation. Contributions are tax deductible to the donor, and for that reason the organizations are prohibited from engaging in political activities.
Yet conservative groups targeted by the IRS did not seek tax status as charities. They were applying for designation as nonprofits operating under Section 501(c)(4) of the tax code, for "the promotion of social welfare." Contributions to 501(c)(4) organizations are not tax deductible, so there is no "tax break" for their donors. Nor do the groups themselves get a "tax advantage." Mr. Toobin argues that these groups should be reclassified under Section 527 of the tax code. More on that below, but 527 organizations also pay nothing in taxes. So there is no "tax advantage" to operating as a 501(c)(4).
So why was the IRS involved at all, and why does it matter? The answer is that the IRS scandal is part of a long-term assault on First Amendment rights. Thanks to "campaign finance reform," citizen groups must navigate a maze of government paperwork and apply to the IRS for a tax license to speak on politics. People literally need a lawyer to figure it out, and not just any lawyer, but one from the highly compensated and mostly Washington, D.C.-based bar practicing "political law."
Smith's a former chairman of the FEC. He knows whereof he speaks. Frankly, this is the most lucid discussion of the "Section 500" tax categories I've read. Especially good is how he calls bull on all the fat-ass leftists defending the administration's authoritarianism. But this stuff has to come out in a political campaign to really pick up traction. The facts of Barack Obama's authoritarianism and corruption should be the centerpiece of a renewed conservative drive for Congress and the presidency. The scandals along with ObamaCare should be a perfect storm of disaster for Democrats seeking election. But the disgusting JournoList media bolsters the epic fail party in power, so it's a hard road ahead, either way.
So, I continue to stand in dissent and rebellion against the leftists destroying our once great country. But I'm still optimistic that the forces of good and decency can pull us back from the brink, and drive the Democrat-Socialists into long-term oblivion. God willing.