Oddly, the IRS didn't seem interested in large 501s

If the IRS was really interested in cleaning up the issue of political groups abusing tax-exempt status to conduct partisan warfare, what kind of groups would they go after?  Which targets would give more bang for the buck, almost literally?  Hint: It would be those groups that accrue enough resources to have a large impact — the major players in the 501s that raise large amounts of cash through deductible donations and then turn those assets into regional or national campaigns.  Smaller players wouldn’t really be worth it … if reform and justice are your primary motivations.


And yet, the IRS effort between 2010 and the presidential election last November exclusively targeted small start-ups opposed to the administration’s agenda while leaving the big players alone, the Associated Press reports today:

There’s an irony in the Internal Revenue Service’s crackdown on conservative groups.

The nation’s tax agency has admitted to inappropriately scrutinizing smaller tea party organizations that applied for tax-exempt status, and senior Treasury Department officials were notified in the midst of the 2012 presidential election season that an internal investigation was underway. But the IRS largely maintained a hands-off policy with the much larger, big-budget organizations on the left and right that were most influential in the elections and are organized under a section of the tax code that allows them to hide their donors.

“The IRS goes AWOL when wealthy and powerful forces want to break the law in order to hide their wrongful efforts and secret political influence,” said Rhode Island Sen. Sheldon Whitehouse, a Democrat who is among a small Senate group pushing campaign finance reform measures that would force these big outside groups to disclose their donors. “Picking on the little guy is a pretty lousy thing to do.”

Karl Rove’s Crossroads GPS and the Koch brothers’ Americans for Prosperity were among those that spent tens of millions of dollars on TV ads and get-out-the-vote efforts to help Republicans. Democrats were aided in similar fashion by Priorities USA, made up of former Barack Obama campaign aides, and American Bridge 21st Century Foundation, an opposition research group led by a former adviser to Senate Majority Leader Harry Reid.

And yet those groups so far have escaped investigations into whether they have crossed the blurry line under the law between what constitutes a tax-exempt “social welfare” organization that is free from donor reporting requirements and a political committee subject to taxes and disclosures.


Why might that be? Groups like American Crossroads and Priorities USA can afford to defend themselves, even if we entertain for a moment the fantasy that this IRS would go after a group of former Obama advisers.  Bullies don’t pick on those who can effectively defend themselves.  Also, these groups get a lot of attention, and starting a war with Karl Rove would have exposed this effort a lot more quickly than anyone in the IRS or the Obama administration might have wanted.

Had these enforcement efforts actually been legitimate, the IRS would have wanted that kind of attention.  The fact that they actively avoided accruing it speaks volumes about its perceived legitimacy even among its perpetrators.

This tells us, then, that the IRS wanted to target conservative groups who couldn’t afford to defend themselves, and who could be easily intimidated out of organizing for their agendas.  That’s not a strategy for reform or enforcement, but simply a brute-force bullying effort in order to sideline grassroots opposition to the current administration.  Contra the AP, that’s not irony at all, but corruption and abuse.

Even those hardly sympathetic to the victims in this case are making that case.  Democratic Rep. Joseph Crowley from New York told Fox News that former IRS Commissioner Douglas Shulman lied to Congress when he denied any of these activities were taking place:


Following the House’s opening investigative hearing into the IRS’s revelation that it gave extra scrutiny to conservative groups seeking tax-exempt status, Crowley was asked if he believed Douglas Shulman lied to Congress.

“I think Mr. Shulman did,” said Crowley in an interview with Fox News. “My understanding is that it was common knowledge if they were going after political groups back then.”

Crowley was referencing a 2012 House Ways and Means Committee hearing in which Shulman, in response to questions from Rep. Charles Boustany (R-La.), held that the IRS was not targeting specific groups applying for tax-exempt status.

“There’s absolutely no targeting,” said Shulman at the time.

The encounter raised suspicions for Boustany as well, who recounted the incident during the same  interview with Crowley.

“He said, absolutely not. He categorically denied it,” recalled Boustany on Friday. “But he was aware of what was going on during this time frame because we know that [a] senior technical advisor had already been sent out to Cincinnati to investigate what was going on and to report back.”

Lying to Congress in the course of a committee hearing and/or investigation is a felony whether under oath or not, which carries a potential five-year sentence.  Perhaps Shulman might have some interesting revisions to add to his two earlier appearances before Congress on this matter, especially if it becomes clear that either the Department of Justice or (more likely) a special prosecutor has a room at Club Fed in mind for him.


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David Strom 3:20 PM | May 24, 2024