Notes on a Trumped Up Scandal

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IRS SCANDAL MAY 15, 2013

Notes on a Trumped Up Scandal The IRS fiasco shows that conservatives can be PC too

Democrats can’t say it; Barack Obama can’t say it; and the IRS certainly can’t say it, so here goes: The only real sin the IRS committed in its ostensible targeting of conservatives is the sin of political incorrectness—that is, of not pretending it needed to vet all the new groups that wanted tax-exempt status, even though it mostly just needed to vet right-wing groups.

How do we know this? Because, for one thing, the people submitting the questionable applications were overwhelmingly right-wingers. As others have pointed out, the early Obama era was a boom time for conservative activists, who were forming groups faster than NBC burns through “Today Show” hosts. This coincided with a series of court rulings that made it possible for these groups to claim tax-exempt status without disclosing their donors under section 501c4 of the tax code.1 As a result, there were suddenly way more non-disclosing political groups trying to claim tax-exempt status than there ever had been, and the vast majority were right-leaning. No surprise, then, that the IRS would focus on whether these groups actually qualified for that status—something that was questionable since the law said their primary activity needed to be “social welfare,” not politicking.

But, in fact, the IRS’s great conservative crackdown is even more innocent than that. It turns out that the applications the conservative groups submitted to the IRS—the ones the agency subsequently combed over, provoking nonstop howling—were unnecessary. The IRS doesn’t require so-called 501c4 organizations to apply for tax-exempt status. If anyone wants to start a social welfare group, they can just do it, then submit the corresponding tax return (form 990) at the end of the year. To be sure, the IRS certainly allows groups to apply for tax-exempt status if they want to make their status official. But the application is completely voluntary, making it a strange basis for an alleged witch hunt.

So why would so many Tea Party groups subject themselves to a lengthy and needless application process? Mostly it had to do with anxiety—the fear that they could run afoul of the law once they started raising and spending money. “Our business experience was that we had to pay taxes once there was money coming through here,” says Tom Zawistowski, the recent president of the Ohio Liberty Coalition, which tangled with the IRS over its tax status. “We felt we were under a microscope. … We were on pins and needles at all times.” In other words, the groups submitted their applications because they perceived themselves to be persecuted, not because they actually were.

Fine—there’s no law against neurosis. But, to borrow a thought experiment from my colleague Alec MacGillis, consider all this from the perspective of the IRS’s Cincinnati office, which handles tax-exempt groups. You’re minding your own business in 2009 when you start to receive dozens of applications from right-leaning groups, applications you didn’t solicit and don’t require. You peruse a few of the applications and it looks like many of the groups, while claiming to be “social welfare” organizations, have an overtly political purpose, like backing candidates with specific ideological agendas. Suffice it to say, you don’t need an inquisitorial mind to decide the applications deserve careful vetting. One Tea Party activist from Waco, Texas, has complained that an IRS official told her he was “sitting on a stack of tea party applications and they were awaiting word from higher-ups as to how to process them.” The quote is intended to sound nefarious—an outtake from some vast left-wing conspiracy—but it’s actually perfectly straight-forward: The IRS was unexpectedly flooded by dodgy 501c4 applications and was at a loss over how to manage them.2

So the crime here had nothing to do with “targeting” conservatives. The targeting was effectively done by the conservative groups themselves, when they filed their gratuitous applications. The crime, such as it is, was twofold. First, in the course of legitimately vetting questionable applications, the IRS appears to have been more intrusive than justified, asking for information about donors whose privacy it should have respected. This is unfortunate and intolerable, but not quite a threat to democracy.

Second, the IRS was tone deaf to how its scrutiny would look to the people being scrutinized, given that they all subscribed to the same worldview, and that they were already nursing a healthy persecution complex. Which is to say, the IRS didn’t go about its otherwise legitimate vetting in a very politically-correct way. “It’s part of their job to look for organizations that may be more likely to have too much campaign intervention,” a law professor named Ellen Aprill told The Washington Post. “But it is important to try to make these criteria as politically neutral as possible.” 

Now, don’t get me wrong—I’m a believer in political correctness, especially when it comes to the government interacting with citizens. I happen to think it’s important that, say, TSA agents not systematically single out young Muslim-looking men for extra screening at airports, even if the numbers tell us they’re more likely to commit acts of terrorism. In a democracy, it’s important that no group be made to feel second-class.

But you know who is reliably enthusiastic about profiling? The conservatives who are hopping mad about the IRS Tea Party flap. Take, for example George Will, who performed a dramatic reading of Richard Nixon’s articles of impeachment this Sunday to highlight the seriousness of the scandal. Here is George Will on the subject of racial profiling:

It is an awkward fact, but it is a fact even though there may not be three Washingtonians rash enough to utter it: Felons are not evenly distributed across society's demographic groups. Many individuals and groups specialize in hurling accusations of racism, and police become vulnerable to such accusations when they concentrate their efforts where crime is.

Change “felons” to “dodgy 501c4 applicants” and “demographic groups” to “ideological groups” and you see the relevance of this quote. The IRS was doing a far more benign version of what George Will would have police do when they stop a suspect and search a vehicle.3 For my money, the agency should have worked over a few token progressive groups so that they could show the scrutiny wasn’t ideologically motivated, just like the police should periodically stop a middle-aged housewife in a Volvo and root around in her trunk. But, of course, in the latter case at least, Will and his ilk would proclaim it a “soggy soufflé of political correctness.”4 The cynicism here is breathtaking.

Noam Scheiber is a senior editor at The New Republic. Follow Noam on Twitter: @noamscheiber

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posted in: irs, racial profiling, right wing, conservative, george will, tax, scandal

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1

Previously political groups were forced to operate under section 527, which faced them with a choice: either disclose most of your donors, or pay taxes.

2

I assume there were larger more sophisticated 501c4s that didn’t file applications with the IRS because they realized they didn’t have to. Certainly the IRS should have scrutinized them, too. And it should have done so whether they were conservative or liberal, though many more of the larger 501c4s of recent vintage have tilted right. 

3

I say far more benign because in this case the numbers overwhelmingly supported the profiling, whereas the numbers behind racial and ethnic profiling are typically much murkier.

4

Actual George Will quote.

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