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IRS "Scandal" is a Hoax

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How Does the IRS Doing Its Job Become a Made-Up Political Outrage? 

Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News.


Can't Anyone Here Play This Game Straight?

Here's a reasonably typical media-framing of the IRS lie, from the usually careful and accurate Economist, posted May 23: "Even before this month's revelation that conservative political groups applying for 501(c)(4) status were being singled out for special scrutiny."  

You see this false framing of the IRS story across the media spectrum, from Infowars to ABC News and NBC News to the Economist to DemocracyNOW (the latter on May 24: "the scandal over the targeted vetting of right-wing groups"). Even the usually reliable Wonkblog at the Washington Post doesn't get the story right, apparently because it hasn't read the relevant law.   

An exception to this remarkable mental stampede in the wrong direction was Jeffrey Toobin (New Yorker, May 14) who wondered, "Did the I.R.S. actually do anything wrong?" His answer started to put the story in reasonable perspective, with a focus on tax law and political money: "...the scandal isn't what's illegal -- it's what's legal. It's what society chooses not to punish that tells us most about the prevailing ethical standards of the time."   

Anatomy of a False Narrative -- Lying, Laziness, Partisanship, What?   

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How is it that the conventional framing is dishonest?  Here are some of the ways:   

1. It wasn't a revelation. All kinds of people were aware of the underlying problem, that 501(c)(4) tax status abuse had been going on since 1959, and that it took a quantum leap after 2011, when the Supreme Court's Citizens United  Decision opened the democratic process to money flooding that would be facilitated by the secrecy offered by the 501(c)(4) status.   

2. There were bi-partisan public hearings on the problem scheduled by the Senate well before the "scandal" broke.   Anyone could look it up.   

3. As soon as the story broke, Lawrence O'Donnell (MSNBC The Last Word) was reporting accurately on the issue, rooted in the difference between a law that says 501(c)(4) organizations should be "exclusively" for social welfare and a 1959 IRS regulation that says, with Orwellian authority, that "exclusively" is to be interpreted to mean "primarily."   Too many reporters and others still do not get this, even though responsible research begins with these primary sources.  

4. No one was singled out. That's right, no one was singled out. The problem with 501(c)(4) applications is that the IRS must review every one to see if the applicant qualifies for tax exempt status. Given the flood of applications from political groups of all sorts post-Citizens United, the IRS needed some way to make sure those applications were "primarily" for social welfare, even though political insiders knew that had been a joke for years (Karl Rove's Crossroads GPS and MoveOn.org are both IRS-approved 501(c)(4) organizations, of which there are thousands -- reportedly 97,382 in 2011).  

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5. There is no reason within the law that any political organization should get a tax subsidy from American taxpayers.  That is allowable only under the IRS regulations put in place in 1959 under the Eisenhower administration. And the Congress could fix this virtually overnight by restoring "primarily" to its original meaning in the law, "exclusively."  Perhaps the real scandal, and a bi-partisan one at that, is that that's not happening.   

6. No one was singled out. The IRS at some level (that eventually included Lois Lerner) made a remarkably stupid, tone deaf, inept effort to identify applications that were more likely than others to be primarily political. Looking for applications tagged "tea party" may have reflected the reality of an inordinate number of such applications, but it was really dumb. Using the tag "party" not only would have done the job, but would have been wholly defensible, since no political party is eligible for public tax subsidy and secrecy for its donors.   

7. No one was singled out. The IRS net for possibly political organizations caught some 300 applications. Of these, no more than a third were "conservative" or "tea party" or "right-wing." The rest were something else, including "liberal" and "left-wing." None of the so-called conservative group applications were denied. Some were delayed, deservedly so, but a group can function as a 501(c)(4) with an application pending, so it's hard to see how much damage a delay would do, if any.  

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Vermonter living in Woodstock: elected to five terms (served 20 years) as side judge (sitting in Superior, Family, and Small Claims Courts); public radio producer, "The Panther Program" -- nationally distributed, three albums (at CD Baby), some (more...)
 

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