Oops: IRS's rationale for scrutinizing tea partiers debunked by nonprofit application data

Good work by the Chronicle of Philanthropy, although we could have guessed that this was the case. Here’s what Lois Lerner said in her initial statement last week copping to the agency’s malfeasance:

“We get about 60,000 applications for tax exemption every year, most of them are 501(c)(3) organizations. But between 2010 and 2012 we started seeing a very big uptick in the number of 501(c)(4) applications we were receiving and many of these organizations applying more than doubled, about 1500 in 2010 and over 3400 in 2012. So we saw a big increase in these kind of applications, many of which indicated that they were going to be involved in advocacy work.

That kinda sorta made sense the day she said it, because at the time we thought the IRS hadn’t started scrutinizing tea partiers until 2012. Then we found out they were doing it in 2011, and then we found out they were doing it in 2010. The further back you push the timeline, the less coherent the “big application surge between 2010 and 2012” defense becomes. The Chronicle administers the coup de grace:

Both Steven Miller, the agency’s acting commissioner until he stepped down Wednesday, and Lois Lerner, director of the agency’s exempt-organization division, have said over the past week that IRS officials started the scrutiny after observing a surge in applications for status as 501(c)(4) “social welfare” groups. Both officials cited an increase from about 1,500 applications in 2010 and to nearly 3,500 in 2012. President Obama ask Mr. Miller to resign on Wednesday.

The scrutiny began, however, in March 2010, before an uptick could have been observed, according to data contained in the audit released Tuesday from the Treasury Department’s inspector general for tax administration…

According to the audit, 1,735 groups applied for 501(c)(4) exemption for the federal fiscal year that ended September 30, 2010—six months after the IRS began its scrutiny. That was down slightly from 1,751 the prior year…

IRS officials did not return requests for comment about the discrepancy in how they accounted for their actions.

A former IRS employee interviewed by the Chronicle theorizes that it wasn’t the volume that gave the IRS headaches but the complexity involved in learning on the fly how to scrutinize a new grassroots network like the tea party for 501(c)(4) compliance. I can sort of buy that as an explanation for delays on the first few applications, but most of these groups look alike. The learning curve for IRS analysts should have been sudden and steep. Why did the delays and extra attention persist for years?

By the way, in case you’re updating your scandal meme scorecard, we’ve now moved on from “Obama’s passive and disinterested, but certainly not culpable” to out-and-out assertions that the IRS was completely in the right here, despite their (and O’s) acknowledgment of their wrongdoing. MKH was on that last night, but here’s Scary Larry from Wednesday evening’s MSNBC broadcast proving he’s the most progressive progressive of them all. I’ll leave you with this from HuffPo’s business editor, who felt moved to opine in favor of these fine, hard-working public servants:

The Tea Party stands for many things, but a big part of its message is that sending money to Washington amounts to the perpetuation of a dangerous welfare state that’s intent on turning America into a helpless land where our lone skill is filling out the forms to go on the dole.

Isn’t it reasonable to assume that people who hold such beliefs might feel additional motivation to pursue grey areas and loopholes at tax time? Wouldn’t the people who oversee federal coffers have been derelict had they not at least had a good look?

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