Years ago, I read a book by a man who had been the public defender in the bad old days of Soviet Russia. There were horrors aplenty worthy of a Kafka novel. One of the things that has stuck with me ever since was his belief that he wasn’t defending his clients against just the Soviet apparatchik. He also had to defend against the expectations of jurors who “knew” what the government wanted even when there was no communication from any level of the Nomenklatura.
Such star chambers didn’t require any direct intervention from Soviet officials at all, he wrote. That is, during a trial, jurors didn’t need to get something like a telegram from the Politburo to know how to rule. They convicted defendants based on what they thought the Politburo and the Party would want them to do.
These memories came back to me as news has developed about the way Internal Revenue Service (IRS) officials in charge of ruling nonprofit applicants were giving unwarranted scrutiny to applications from conservative and pro-Israel causes applying for 501(c)(4) status.
“Congress wrote the 501(c) code to provide tax-exempt status to a broad range of groups,” the Wall Street Journal reports. “The code covers 28 categories of organizations. So 501(c)(3) groups include charities and educational institutions. The 501(c)(4) category covers social-welfare groups. The 501(c)(6) label includes trade associations and chambers of commerce.” Labor unions are covered under section 501(c)(5).
“These categories have different requirements,” the Journal continues, “and a few impose stricter rules if organizations want to claim tax-exempt status. Charitable 501(c)(3) groups, for instance, are barred from partisan campaign activities.”
“The categories that cover the main players in politics—social-welfare groups, labor unions, trade associations—have the same general rules. The majority of their money (understood to be at least 51%) must go to their ‘primary’ purpose—social welfare, business-community support, union activities.”
“Beyond that, however, the groups have significant spending leeway, including for partisan political campaigning. The caveat is that they are supposed to pay taxes on their political spending, and the contributions to these groups are not tax deductible as charitable giving (as they are for (c)(3) groups).”
On Friday, May 10, Lois Lerner, former head of the IRS division that oversees tax-exempt groups, admitted to attorneys at a tax conference organized by the American Bar Association that “low-level” functionaries at the IRS had flagged 501(c)(4) applications that had words like “patriot,” “Tea Party,” or had missions that sought to educate the citizenry on the Constitution, or had statements criticizing “how the country is being run.”
In some cases, the IRS harried applicants by requiring them to submit donor lists and made document requests about the activities of the family members of board members and officers, and even demanded the reading lists of board members. All of which is very irregular.
Multiple Congressional investigations have since begun with largely bipartisan support.
I doubt the investigations will tie the White House to any of this. Instead, I suspect it’s something more invidious. It’s possible that these “low level” IRS employees, as Lois Lerner tagged them, targeted conservative causes for unjust scrutiny because they thought it would please the Obama administration.
No matter your politics, this is wrong. Of necessity, the IRS must be non-partisan in its enforcement of America’s tax laws. To do otherwise, the Washington Post editorializes, “threatens the trust and the voluntary cooperation of citizens upon which this democracy depends.”
In unfairly singling out certain groups, IRS employees put their thumbs on the scales of justice. Evenhandedness and uprightness were defenestrated. President Obama got it right when he said the actions of the IRS were “outrageous.” Trust has been lost. The moral authority of the IRS has been diminished. The cause of good governance has taken a bruising body blow.
If this was a case of functionaries trying to please the Obama administration, then people need to lose their jobs. If the acts were directed from above, then criminal law was broken and people need to go to jail.