The IRS scandal that wasn’t

By Weekly Archive On May 22, 2013

By Bill Press

8_bilpress There’s nothing Washington likes better than a scandal. So official Washington was absolutely orgasmic this week while dealing with not one, but three scandals at the same time. Not one of which, sadly, was a sex scandal.

First, there were accusations of a “cover-up” in the aftermath of the bombing of our consulate in Benghazi, Libya. Then came reports that the IRS was conducting a partisan witch-hunt against the tea party. Topping it all off was news of the Justice Department’s seizing phone records of Associated Press reporters. And hovering over all three was the perennial Washington parlor game: “What did the president know, and when did he know it?”

Obama haters could hardly contain their glee. Mike Huckabee predicted that Benghazi would drive President Obama out of office. Sen. James Inhofe whispered the “I” word. Soon joined by Michele Bachmann. John Boehner demanded that unnamed IRS agents be arrested and sent to jail, presumably without a trial. And House Republicans scheduled multiple hearings on each controversy.

How disappointing for them when the week ended and two out of three scandals had all but disappeared. Only one was left: the Justice Department’s heavy-handed invasion of AP. As part of a criminal investigation into who leaked information about a successful intelligence operation to thwart the blowing up of an airliner headed from Yemen to the United States, DOJ subpoenaed the records of 20 phone lines at the AP, used by more than 100 reporters and editors, for April and May 2012.

The Justice Department’s raid of AP phone records is nothing less than a totally unjustified, wholesale trashing of the First Amendment. DOJ violated its own guidelines by failing to notify the AP of its action or narrowing the scope of its subpoena. It has also offered no explanation how, by reporting this story, which the administration itself was poised to released, the AP in any way jeopardized our national security. This is the one real scandal, which demands more attention and answers. Not so with Benghazi or the IRS.

As I wrote last week, the flap over Benghazi is nothing but a poorly disguised effort by panicked Republicans to prevent Hillary Clinton from running for president in 2016. John Boehner may be obsessed with Benghazi, but this car has run out of gas.

The scandal that received the most attention, the IRS and the tea party, is a lot more complicated than it first appears. True, there is no defending the IRS targeting members of either party. But there is also no defending the fact that far too many political groups today enjoy tax-exempt status simply because they disguise themselves as “social welfare” organizations.

Republicans try to paint the latest IRS flap as a new, Obama-inspired, Nixonian conspiracy aimed at conservatives. Nonsense. In fact, this problem dates back to 1959, when Congress passed a law defining 501(c)(4), or tax-exempt, organizations as those which operate “exclusively for purposes beneficial to the community as a whole.” That same year, however, the IRS adopted regulations awarding tax-exempt status to organizations only “primarily” engaged in social welfare. Ever since, using that loose definition – primary, not exclusive – they have granted tax-exempt status to groups that spend up to 49 percent of their funds on political activities. And refused to rescind tax privileges for those that spend far more.

For example, the watchdog group Citizens for Responsibility and Ethics in Washington complained to the IRS about the American Action Network, a 501(c)(4), headed by former Republican Senator Norm Coleman, which spent 66.8 percent of its total spending from July 2009 through June 2011 on politics. The IRS did nothing.

So it’s important to understand. The issue of appropriate tax-exempt status goes way back. It was made worse by the Supreme Court’s Citizens United decision, which spawned a new wave of political organizations: the overwhelming majority, tea party chapters, of which more than 300 filed for tax-exempt status. IRS staffers decided to focus exclusively on them. Even though none of the tea party applications was denied, that concentration on the right was wrong. But it’s a case of bureaucratic bungling, not some vast left-wing conspiracy.

A new head of the IRS is a good start. Congress should next establish tough new standards for the IRS to follow in granting tax-exempt status. Then maybe Congress can get to work on a real scandal: gun violence in America.

Bill Press is host of a nationally-syndicated radio show, the host of “Full Court Press” on Current TV and the author of a new book, “The Obama Hate Machine,” which is available in bookstores now. You can hear “The Bill Press Show” at his website: billpressshow.com. His email address is: bill@billpress.com.