Skip to main content
Part of complete coverage from

With IRS defanged, politics can run rampant

By Gloria Borger, CNN Chief Political Analyst
updated 9:23 AM EDT, Thu May 16, 2013
STORY HIGHLIGHTS
  • Gloria Borger: After IRS scandal, it's open season for political nonprofits
  • She says the agency was wrong to target conservative groups
  • Still, the IRS is needed to keep political groups from posing as nonprofits, she says
  • Borger: IRS focused on small fry, left big organizations free to spend on politics

(CNN) -- One of the most perverse results of the IRS's lame, overzealous -- and possibly criminal -- behavior in looking into the tax-exempt applications of assorted advocacy groups is this: They're a lot safer from scrutiny today than they were yesterday.

After this IRS mess, who in government is going to be in a rush to take on -- or try to regulate -- the groups they should actually be looking at as political operations, overt or covert? Um, not many.

Here's the real deal: It's an open secret in Washington that some of these groups, which spent huge amounts of money during presidential campaigns, are politically aligned. Whatever their "labels," as the IRS might call them, they have been tax-exempt because they claim to be dealing with issues rather than elections. That is, policy, not political candidates. But in the heat of a general election, when policy is politics, how can anyone tell the difference?

Gloria Borger
Gloria Borger

Priorities USA is a Democratic brand; Karl Rove's Crossroads GPS isn't likely to do anything other than help the GOP. To gain their tax-exempt status, they're supposed to promote the "social welfare." What, exactly, does that mean?

It's a complicated question that has become infinitely more complex in the wake of the Supreme Court's Citizens United decision, which allowed corporations to start donating directly to activist groups. Suddenly, the potential of getting some dibs on their considerable money grew larger. The groups designated as 501(c)(4) became the perfect pots to hold the dough, and they swelled, literally and figuratively. And the IRS didn't do much about it.

It might have been a better idea, rather than embarking on what seems like a potentially criminal political fishing expedition, to actually take a look at the huge amounts of money being spent out in the open during the last campaign.

Rumsfeld: Scandals are the perfect storm

Why wasn't the IRS "scrutinizing the big fish," asks Paul Ryan, the chief lawyer for the Campaign Legal Center, a watchdog group that has pushed (unsuccessfully) for the IRS to investigate these groups. "The IRS needs to be focused on the big fish and not on the little Mom and Pop tea party groups, and certainly not based on their political ideology."

Ah, but that's exactly what happened -- and, as a result, these groups that, according to some estimates, collectively spent over $250 million on candidates during the last election are still tax-exempt. Can it be that the IRS investigators were so silly, clueless and unaware of their appropriate role? Alas, yes.

But the legal eagles reading and interpreting the IRS laws are obviously a lot smarter. In its description of the 501(c)(4) category, the IRS lays it out pretty plainly. "Examples" of organizations under this statute that would be considered tax-exempt, it says, are "civic associations and volunteer fire companies." Hmmm. Not exactly political in any way, shape or form. What's more, the IRS also makes it clear that, in order to qualify, the burden is to prove that "your organization is organized exclusively (italics mine) to promote social welfare."

But according to Ryan, the gremlins (i.e. the lawyers) have managed to figure out a way to get around this. The new "perceived line," he explains, is that all these groups need to do is spend less than half of their money on politics. He calls it the "tax lawyer community interpretation." Huh? Is that how we're running the government?

So if these groups spend less than half of their money on politically related activism, the dough they collect from big corporations and donors can be used for campaign activities, all without disclosure of where the money came from.

This has not escaped the notice of Congress, especially Democrats who have been outgunned by Republican-leaning groups.

"We urge you to protect legitimate section 501(c)(4) entities by preventing non-conforming organizations that are focused on federal election activities from abusing the tax code," seven Democratic U.S. senators wrote then-IRS Commissioner Douglas Shulman last year.

What makes sense is for the IRS to make sure that its laws are followed. Citizens can at least expect that their government might know the difference between quashing political dissent and legitimate inquiry. Fishing expeditions on political-sounding names is just stupid, if not venal.

And now, the obvious -- and perverse -- consequence of the IRS bungling: It has just made the world safer for tax lawyers. Your taxpayer dollars at work.

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

CNN's Kevin Bohn contributed to this article.

ADVERTISEMENT
Part of complete coverage on
updated 3:47 PM EDT, Mon September 15, 2014
LZ Granderson says Congress has rebuked the NFL on domestic violence issue, but why not a federal judge?
updated 12:50 PM EDT, Mon September 15, 2014
Mel Robbins says the only person you can legally hit in the United States is a child. That's wrong.
updated 1:23 PM EDT, Mon September 15, 2014
Eric Liu says seeing many friends fight so hard for same-sex marriage rights made him appreciate marriage.
updated 3:38 PM EDT, Mon September 15, 2014
SEATTLE, WA - SEPTEMBER 04: NFL commissioner Roger Goodell walks the sidelines prior to the game between the Seattle Seahawks and the Green Bay Packers at CenturyLink Field on September 4, 2014 in Seattle, Washington. (Photo by Otto Greule Jr/Getty Images)
Martha Pease says the NFL commissioner shouldn't be judge and jury on player wrongdoing.
updated 5:22 PM EDT, Mon September 15, 2014
It's time for a much needed public reckoning over U.S. use of torture, argues Donald P. Gregg.
updated 12:08 PM EDT, Mon September 15, 2014
Peter Bergen says UK officials know the identity of the man who killed U.S. journalists and a British aid worker.
updated 12:20 PM EDT, Sat September 13, 2014
Joe Torre and Esta Soler say much has been achieved since a landmark anti-violence law was passed.
updated 4:55 PM EDT, Fri September 12, 2014
David Wheeler wonders: If Scotland votes to secede, can America take its place and rejoin England?
updated 6:07 PM EDT, Fri September 12, 2014
Jane Stoever: Society must grapple with a culture in which 1 in 3 teen girls and women suffer partner violence.
updated 4:36 PM EDT, Fri September 12, 2014
World-famous physicist Stephen Hawking recently said the world as we know it could be obliterated instantaneously. Meg Urry says fear not.
updated 6:11 PM EDT, Fri September 12, 2014
Bill Clinton's speech accepting the Democratic nomination for president in 1992 went through 22 drafts. But he always insisted on including a call to service.
updated 6:18 PM EDT, Fri September 12, 2014
Joe Amon asks: What turns a few cases of disease into thousands?
updated 1:21 PM EDT, Thu September 11, 2014
Sally Kohn says bombing ISIS will worsen instability in Iraq and strengthen radical ideology in terrorist groups.
updated 1:30 PM EDT, Thu September 11, 2014
Analysts weigh in on the president's plans for addressing the threat posed by the Islamic State of Iraq and Syria.
updated 9:27 AM EDT, Thu September 11, 2014
Artist Prune Nourry's project reinterprets the terracotta warriors in an exhibition about gender preference in China.
updated 9:36 AM EDT, Wed September 10, 2014
The Apple Watch is on its way. Jeff Yang asks: Are we ready to embrace wearables technology at last?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT