501(c)(4) organizations enjoy a number
of benefits under our tax code. First, much of their operations are exempt from
federal taxation, a huge boon to the operation of such groups. Second, 501(c)(4)
groups can run ads during political campaigns so long as their advocacy is
directed at “the promotion of social welfare,” a loose definition that
encompasses almost all issue advocacy one can think of. Third, these
organizations do not have to publicly disclose who donates money to them, a
great way for very wealthy individuals to influence the political process
without anyone knowing about it.
Given these enormous benefits, I for one
am not troubled by the fact the Internal Revenue Service scrutinized a huge
number (roughly 100) of these groups who had affiliations with various right wing
causes. If we are going to provide such generous tax benefits to organizations
and allow them to collect donations in secret, why wouldn’t we want the IRS to
ensure they are complying with the strictures of federal law?
So what is this “scandal?” Some career
types at the IRS made “tea party” (and the like) affiliated groups fill out a
longer questionnaire so the agency could confirm that the groups were eligible
for all of the benefits accruing to a 501(c)(4) organization. NONE of the
groups who applied for the tax exempt designation were denied it by the IRS.[1] In short, some
groups that were formed in the wake of a controversial Supreme Court decision
that allows a small group of really rich people to influence the political
process without the rest of us knowing about it had to fill out a long form,
the result of which did not result in their being denied the legal protections
being sought.
Teapot, meet tempest, or, in other
words, a faux scandal tailor made for the lazy journalists who populate our
nation’s capital and the offended mass of Republicans who want nothing more
than to try and drive a stake into the heart of the second Obama
Administration. Color me unimpressed.
[1] There are plenty of articles online about
this faux scandal, but to take just one that notes no group was denied the tax
exempt benefit: http://www.reuters.com/article/2013/05/10/us-usa-politics-irs-idUSBRE9490S720130510
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