reason.comData Doesn't Support IRS Explanation for ScandalData Doesn't Support IRS Explanation for Scandal- Charlie Martin And if you think using politically charged keywords is just doing their jobs, what would you think of a Bush administration that held up the application of Organizing for America?
- Alan Petrillo I didn't take issue with the timing, Charlie. Besides, the traffic from the rest of the 501(c) applications is so high that even doubling the 501(c)(4) traffic is almost lost in the noise.
How would I feel about the IRS under W holding up an application for Organizing for America? I expect I'd be pissed off at first, and then I'd have to ask the question "Were they abusing 501c4 status?" If it turns out they were abusing 501c4 status then I expect I'd feel the same as I do about the IRS under Obama denying status to Emerge America. - Charlie Martin Okay, then how do you feel about OfA being a 501(c)4 now? In any case, you're making my case for me: almost everyone applying for 501(c)4 status gets approved, you say -- but if you have a "progressive" sounding name you get approved in weeks, and if you have a "conservative" sounding name you get approved in three years, after spending tens of thousands in legal fees -- or you get neither approved nor disapproved for three years. Or if you name your crooked charity after barak Obama, you get approved in thirty days and get it made retroactive. You claim that the number of applications are an issue -- but when I point out the increased scrutiny predated the glut you say you didn't take issue with the timing. Well, that's fine -- but you're apparently claiming that the IRS decided to start targeting conservative groups because of a glut of applications that hadn't yet happened. This is no small trick.
- Charlie Martin Most of all, you're claiming nothing untoward happened while Obama is (or claims to be) outraged, and major Democrats are calling it unacceptable.
- Charlie Martin And let's not forget the IRS giving confidential application materials to ProPublica, which has beena felony since Watergate. And ProPublica is the one reporting who their source was.
- Alan Petrillo Actually, for 501c4 status you don't have to apply for official recognition at all if you don't want to. That's part of the problem. The rules both for status, and for the behavior of the 501c4, are so vague that there is no clear path to approval or just about anything else about them.
And here we've uncovered the heart of the problem: The rules concerning 501c4 status are vague at best, and subject to way too much interpretation by individual agents. Starting with the fact that a group does not need to seek official status from the IRS before claiming 501c4 status. The 501c4 is kind of the bastard child of a 501c3 and a 527. The 501c4 is the only one of the 501c category that has significant political activity authorized. The recommended reform is simple: First, reduce the political authorization of the 501c4 to what the rest of the 501c category has. Second, rewrite the rules concerning the 501c4 to state precisely what an applicant must submit, take the slop out of the approval process, and state precisely what the limitations are on organizational behavior.
As for the glut of applications, whether you're processing 69,301 applications, as in 2009, or 73,319 applications, as in 2012, and that's not counting 501(a) or 527 applications, or any of the other constellation of exempt organizations, that you're only doing it with a staff of 200 means it's a hell of a workload. Would you rather have agents triage their workload, or continue investing their limited investigation time on, say, Knit For Life? - Charlie Martin No, but if you *don't* apply for (c)4 status and they decide you don't quality later, they can put you in jail.
As for the glut of applications, the deep problem with the whole argument is that it's simply not true that IRS was responding to the glut. It didn't happen that way. The IRS "responded{" before the "glut" which actually wasn't a glut -- the number of applications was *down* in 2010 and 2011. Didn't happen. It's a dead parrot, Alan. It's not true. Don't keep embarrassing yourself.
http://www.theatlantic.com/.../there-was-no-surge.../275985/ 
theatlantic.comThere Was No Surge in IRS Tax-Exempt Applications in 2010There Was No Surge in IRS Tax-Exempt Applications in 2010- Charlie Martin In any case, if the triage method has the effect of preferring people on one side over the other, it's *still* wrong. And you're *still* not answering the point about the widely reported "leaks" that violated the law.
What they did was precisely rewrite the rules: liberals send a postcard, conservatives deliver their entire lives *and* still don't get processed. - Alan Petrillo I haven't answered your point here about the leaks for two reasons. First, because that's not the subject here, and second, because I've already addressed that on another thread when you changed the subject before.
Here are a few facts I've gleaned about the 501c4 scandal.
-
An organization does not need approval from the IRS to operate as a
501c4. All they have to do is say they're a 501c4 and operate under the
rules. Whether or not they actually are a 501c4 only becomes an issue
if they're challenged by a third party. In practice, most 501c4's do
apply for recognition of their status, as a form of official blessing.
Practically every applicant for official recognition of 501c4 status
gets it. The rules are vague, and you'd have to be in fairly egregious
violation to get denied. Investigating whether or not 501c4's are
violating the terms of the code for operating as such is the IRS's job.
- As the scandal is over applications filed in 2010, the IRS
received 1735 of them that year, of which 300 were flagged for
additional investigation. Of these 300, 75 were TEA Party affiliated.
So that's a quarter of a sixth of total applications. Of the 300
flagged applications, only one was denied 501c4 status, and that was a
Liberal group. And this even though, by all accounts, the majority of
applicants for 501c4 status have been Conservative groups.
-
The number of applications for 501c4 status received by the IRS has been
increasing by 40% per year since 2010, and the IRS is still handling them
with the same staff as in 2009.
- 501c4 status is actually a
fairly small nonprofit category. The overwhelming majority of nonprofit
applications, more than all others combined, is for 501c3 status, which
does require approval from the IRS before operation. In 2012 the IRS
received 66543 applications for 501c3 status, but only 3357 for 501c4
status.
- The Cincinnati office of the IRS, which handles all
applications under section 501(c), processed a total of 73319
applications in 2012. They have a staff of 200 agents. That comes out
to 367 applications per agent per year. Assuming 2000 hours in the
typical work year, that comes out to 5.4 hours per application.
Considering the veritable mountain of paperwork involved in dealing with
these applications, I'd say grinding through 2 of them per day
constitutes not only good work, but very good work. And this is not
counting other types of tax-exempt applications, such as 527's.
-
The two agents in Cincinnati who were using politically charged
keywords to search through 501c4 applications were, frankly, just doing
their jobs. They had to use some method of triage to prioritize their
workload. As Kurt Eichenwald of Vanity Fair said, "Which do you think
deserves special attention to determine possible violations of the
political rules? Patriots for Obamacare, or the Laurel Garden Club?"
-
For the past 12 years, and especially since 2010, congressional
Republicans have systematically robbed the IRS of funding, staffing, and
leadership, so it should be no surprise to them that the agency has
become somewhat less than the picture of efficiency. They apparently
wanted it that way, and that's what they got. And now they're screaming
because they have found themselves foisted upon their own petard.
The
bottom line is that the 501c4 scandal is just another steaming pile of
excrement brought to you by the TEA Party wing of the Republican Party.
And by acting in the manner of "ready, FIRE, aim" the Obama
administration took the bait, and walked right into their trap. The TEA
Party couldn't steer President Obama around any better if they had a
ring in his nose.
Good job, there, O.
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