This article first appeared at The McAlvany Intelligence Advisor on Friday, February 7, 2014:
Midst the outrage following President Obama’s declaration that there’s “not even a smidgen of corruption” inside the Internal Revenue Service have come some interesting questions: just how far up the chain of command does the corruption go? Does it reach to the top levels of the IRS? Does it reach to the White House? Does it reach to the president himself?
Who cares? Those are the wrong questions. The right question ought to be: why would any freedom-loving organization in its right mind decide to tangle in an unfair fight with the enemy? What possible advantage would be gained by any group supposedly engaged in the freedom fight to gain tax-exempt status?
Lawyers for the American Center for Law and Justice (ACLJ) have been having a field day exposing IRS corruption. Letters to editors, lawsuits, television interviews and so on are more than sufficient to expose Obama’s lie. They and others have revealed that the IRS has deliberately, with malice aforethought, delayed approval for Section 501(c)4 status for dozens of tea party and other conservative groups, that those applications were specifically flagged for close attention and further demands for inappropriate and unnecessary and time-consuming information, that the IRS has targeted enemies of the state with audits and harassment. The lawyers recounted the resignation of various guilty parties and have endlessly reminded folks of the Fifth Amendment claim by Lois Lerner who was put on administrative leave and who then decided to retire altogether. They are continuing their lawsuit on behalf of 41 such groups, most of whom still haven’t gotten approval on their applications for tax-exempt status.
They were only too happy to quote at length the report from The Inspector General for Tax Administration (TIGTA) about the IRS’s machinations to stall and delay approvals:
The IRS used inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based upon their names or policy positions instead of indications of potential political campaign intervention.
[The IRS] 1) allowed inappropriate criteria to be developed and stay in place for more than 18 months, 2) resulted in substantial delays in processing certain applications, and 3) allowed unnecessary information requests to be issued.
Although the processing of some applications with potential significant political campaign intervention was started soon after receipt, no work was completed on the majority of these applications for 13 months….
Many organizations received requests for additional information from the IRS that included unnecessary, burdensome questions (e.g., lists of past and future donors).
Piled on top of this comes the announcement from the IRS that it is re-writing the rulebook of behavior for those covered under Section 501(c)4, essentially emasculating their efforts to restore the republic. Just before Thanksgiving the new rules, based on “reverse engineering” the behaviors by these groups most distasteful to the state, were announced without fanfare, giving the public 90 days to respond. At the time acting IRS Commissioner said all they were intended to do was to provide “clarity” for rules that were confusing, and to “improve” the groups’ understanding of what behaviors were allowed and not allowed to gain and retain tax-exempt status:
This is part of ongoing efforts within the IRS that are improving our work in the tax-exempt area.
Once final, this proposed guidance will continue moving us forward and provide clarity for this important segment of exempt organizations.
He said that there would be further “clarifications” in the future.
And what are those new rules? No tax-exempt group may
Conduct voter registration drives to get out the vote
Distribute any material prepared by (or on behalf of) a political candidate
Prepare or distribute voter guides that refer to candidates or political parties
Hold any sort of meeting or gathering within 60 days of a general election at which a political candidate appears as part of the program
As House Ways and Means Chairman Dave Camp put it, the rules are designed “to put tea party groups out of business.” Indeed they are.
What about unions, covered under Section 501(c)5? Are they being subjected to the same new rules? Of course not. Here’s House Oversight Committee Chairman Darrell Issa on that:
The fact that the Administration’s new effort only applies to social welfare organizations – and not powerful unions or business groups – underscores that this is a crass political effort by the Administration to get what political advantage they can, whenever they can.
ACLJ attorney Jay Sekulow asked the wrong questions:
The question is not whether the IRS was corrupt. It was and is. The question is, how corrupt? How far up the chain of command does the corruption extend?
Again, who cares? Most informed citizens following the story know how far up the chain it goes. No one is asking the question that should be asked: why would any group, allegedly involved in the freedom fight, want to try to play nice with the thugs at the IRS? What possible advantage could be gained?
There is no tax deduction available for donors. Here’s what the IRS says about that, quoting directly from its rules: “Contributions to civic leagues and other section 501(c)4 organizations generally are not deductible as charitable contributions for federal income tax purposes.”
Maybe it’s because these groups want to appear “legitimate.” But how is such legitimacy granted by such a discredited and corrupt gaggle of thugs and bandits as the IRS? Is this too harsh? Just Google the words “IRS corruption examples” and see what comes up. One will likely find (see the link below) the article “IRS: Corrupt to the Core” offered by the Tenth Amendment Center.
Maybe because such groups want to offer some kind of assurance to potential donors that the group is legitimate and honorable. But at what price?
Once tax-exempt status has been granted (after the investment of hundreds of hours of time and effort and thousands of dollars that could easily be used much more effectively in the fight), the paperwork has just begun. To stay qualified, the IRS has issued a 40-page book of rules that must be followed annually.
Nowhere in any rule or reg published by the IRS does it say that such groups must apply for tax-exempt status. The operative word is may.
Aren’t these groups supposedly supportive of the Constitution and its Bill of Rights? Don’t they hold in highest esteem and regard the guarantees, especially of the very First Amendment, which states: “Congress shall make no law … abridging the freedom of speech …”? Why do they waffle and fold like a cheap suit and beg on bended knee to gain such exalted status from the IRS? Why would they so happily and willingly give up such precious rights for a piece of tainted parchment?
Happily, after the end of the comment period when the new rules go into effect, most groups will have those questions answered for them. If they are true to their word and to their mission – if they mean what they say about limiting government and abolishing the IRS – they will rescind their pending applications. They will opt out, and stay out. They will remain loyal to their purpose.
Some might even recognize a marketing opportunity, appealing to those donors and supporters who have been asking the right questions all along, donors and supporters who are more interested in commitment to principle rather than to compromise with and be emasculated by the enemy.
Americans for Tax Reform: Obama IRS Openly Prepares to Silence Conservative Grassroots Groups
The IRS: Compliance guide 40 pages
The Tenth Amendment Center: IRS: corrupt to the core