The IRS Scandal: Tempest In A Teapot

 

After the previous essay on Benghazi, I got a bunch of email.

The gist of which is best summed up as:

Okay, Benghazi, fine, whatever. Fine. But what about the IRS thing? Huh, what about that? How are you going to defend your boy Obozo on that, huh? Huh? It’s Obumer’s Watergate, Man, he’s going down! Impeachment! Impeachment!

Right.

The IRS scandal.

You mean the IRS scandal where not one, not a single one, of the targeted conservative groups requesting 501(c)3 or (c)4 designations were denied tax exempt status despite being engaged in blatantly political activities in direct violation of the intent of the tax code? You mean the IRS scandal where not one of the targeted organizations were denied their rights as citizens of the United States or, in point of fact, were not harmed in any way? You mean the IRS scandal where no actual laws were broken? Where there was no actual cover up? And where the IRS itself found the problem and corrected it and then reported it to the American people?

You mean that “scandal?”

Right.

Folks, there’s a scandal here alright, starting with the one where hysterical conspiracy mongering conservatives in Congress will now use this non-issue as yet another excuse for obstructionism, yet another excuse to beat their fleshy chests in a pity party of make-believe persecution while managing to avoid doing any of the actual work they supposedly get paid for.

They’ll form committees and demand investigations and assign an independent counsel.  They’ll bloviate and pontificate in furious fulminous outrage. They’ll give self-important red-eyed interviews to the feverish rumor mill of Fox News.  They’ll stroke the corpulent fecund ego of Rush Limbaugh and his legions of misshapen trollish minions who are even now rubbing their flinty hands together and leaking noxious fluids and squealing in orgasmic glee.  They’ll stand by with eyes slyly averted while Glenn Beck spins his bizarrely ludicrous gold-tinged conspiracy theories replete with Nazis and Hitler and Mao and Sharia Law and the coming of the Mormon End Times of Doom. And they’ll send forth their scrawny pet Tea Party chimp and she’ll caper about dancing her little clockwork monkey dance to the sound of music only she can hear with the whites of her crazed eyes rolling madly in their sockets while she screeches her little set-piece monkey screech of Impeachment! Impeachment!  Then they’ll trundle out John McCain with his war medals a’clankin’ and a’janglin’ and he’ll briefly rouse from the excrement smeared bamboo prison of his cloudy yellowed existence and angrily shout Pickles! yet again.  And when the circus has done run its course, when all of the greasepaint saturated clowns have exited their gaudily painted little car and tooted their little horns and squirted their little seltzer bottles into the cheering crowd, when in the end it turns out that there’s really no scandal at all, and there’s nothing that they can pin on Obama or use to deflect Hilary Clinton from 2016, well, then congressional conservatives will sullenly slink back to their dark little spider holes and dust off their forgotten Benghazi script.

What congress will not do, is their actual jobs.

And most Americans won’t even notice.  America heard “IRS” and “Obama,” their blood began to fizz and pop, and they were off and running down to the store for a fresh supply of torches and pitchforks without once stopping to ask even a single question.

Because they didn’t need to ask questions, they didn’t need to think. 

IRS.

Obama. 

Ding!

When the bells ring, the dogs drool.  It’s really just as simple and as reflexive as that.

Kill ‘em all and let God sort it out, that’s how we do business in America these days. Kill ‘em all, let God sort it out.

But here’s the thing, Americans should have asked the questions.

That way they wouldn’t look so damned stupid all of the time.

At this point, most Americans couldn’t even tell you what this whole thing is actually about. 

Fine, so we’ll ask: Say, what’s this whole thing actually about?

It seems that the Internal Revenue Service singled out conservative groups for detailed investigation.  Republicans are calling it “The New Watergate” and “The New Iran Contra Affair.” 

Um, isn’t there a  non-republican scandal we can compare it to?

No.

What was the IRS looking for exactly?

In a word, fraud.  The groups in question were applying for tax-exempt status, specifically they asked the IRS for either 501(c)3 (charitable agencies) or 501(c)4 exemptions (social welfare organizations).

What the heck is a “social welfare organization?” Sound like a bunch of flaming liberals!

Not exactly, Social Welfare Organizations, called 501(c)4 Groups in the tax code, or usually just C4s, are nonprofit agencies that by law must be devoted primarily to programs broadly serving their communities and not private groups. These can be religious, cultural, educational, veterans organizations, homeowners associations, volunteer fire departments, and so on.

Sounds like socialism! And I  knew welfare would be involved somehow!

Right. In recent years the vast majority of those applying for 501(c)4 exemptions have been conservative patriot groups.

Like the TEA party?

Correct.

OK, that’s cool then. So what’s the problem?

The problem is that 501(c)4 group cannot engage directly in politics.  They can make campaign contributions, but neither that nor lobbying can be their principle function. Otherwise, they get to pay taxes just like everybody else. And there’s another more important thing, political groups, besides having to pay taxes also have to disclosure how much money they gave and to who.  C4 organizations don’t.

I don’t get it.

501(c)4 organizations can give money to politicians and political parties anonymously, as much as they want.

So, like if you’re one of these C4 outfits you can just give whatever you want to whoever you want and you can keep it a secret?

Bingo.

Wait, you’re saying you could be like The Muslim Brotherhood or Homos for Sodomizing Jesus or something and you can give gobs of money to a stinking filthy scheming liberal politician and they don’t have to disclose that?

Not directly to the politician.

How then? Like to a SuperPAC?

Exactly. Then that PAC can support a politician or lobby for or against a particular piece of legislation and you, as an American citizen, don’t have any idea who’s paying the bills or helping any particular candidate. 

That’s Bullshit! How did this happen?

Two words: Citizen’s United.  Prior to 1998, just about 100% of all political donors to federal campaigns were publically identified.  Today, four years after the Supreme Court’s Citizens United decision, it’s less than 40%. That’s how profound of impact Citizen’s United had on federal elections.  It’s huge.  Today 60% of all federal campaign money is given anonymously, in other words, you as a citizen of the United States have no idea who’s funding which politicians.  And since money is the key to political office in the US, you don’t know who’s buying what. With the Citizens United decision, big donors can de facto give as much money to political parties and politicians as they want. In many cases, for what should obvious reasons, both the big money donors themselves and especially the candidates would prefer that you, Average American Citizen, don’t find out who’s giving what or how much to whom.  

So, you’re saying that…

Since Citizens United, C4 organizations and Political Action Committees naturally became a way to launder campaign money.

So, like, maybe the government tax people should watch out for that! You know enforce the law!

Yeah, maybe they should. That would be the IRS’s job, wouldn’t it?

Hey! I thought we were asking the questions here!

Sorry.

So why was the IRS spending all of its time harassing conservatives? That’s some Nazi shit right there.

Since Obama’s election in 2008 and the Citizen’s United decision in 2010, the vast majority of organizations applying for 501(c)4 status are, wait for it …. wait for it … conservative Tea Party groups. Naturally they get the lion’s share of the attention.  The IRS wondered if the organizations applying for tax-exempt status as “social welfare” organization really were social welfare organizations or if they were, maybe, engaged primarily in, oh, I dunno, politics. And they wondered that because it’s their job to ask the question.

OK fine. But how come the IRS spent 100% of its time targeting the Tea Party, huh. What about that?

Actually, only about 30% of the organizations singled out for further review were conservative political groups.  

Yeah, but, it still sounds like harassment!

Well, it’s the IRS.   However, of the approximately three hundred applications that were tagged for extra screening (out of several thousand), only about a hundred of which were conservative organizations, independent review showed that those applicants clearly demonstrated indications of significant political campaign activity and they should have been investigated in detail.  In other words, in nearly every case of the 501(c)4 application process, the IRS did exactly what it was supposed to do. In fact, the IRS should have been doing more to investigate these groups, along with the right-wing groups they should have investigated left-wing groups, and middle of the road groups, and any group applying for tax-exempt status as a social welfare organization who appeared to be engaged primarily in political activities. 

Yeah, but, it still sounds like harassment!

Again, it’s the IRS. they’re supposed to harass tax-cheats. And they’re supposed to regard everybody as a potential tax-cheat until proven otherwise. Everybody feels persecuted. But, see, here’s the thing. No conservative group that applied for tax-exempt status was denied.  All were eventually approved. All of them. None of them would have even noticed this thing if it hadn’t made the news. 

But, wait, I thought they were targeting the Tea Party?

Well, yes, in essence they were.  Given the overwhelming number of applications and the limited manpower, and the fact that Congress refuses to either confirm a permanent head of the organization or fund the IRS to the levels required to do a thorough job, the IRS needs a way to help filter things out, so they use something called a BOLO list, or Be On The Look Out.  Then they used certain keywords to flag applications for the BOLO list, words like “Tea Party,” “Patriots,” and “9/12 Projects.”   However, it didn’t work very well, so after about a year they changed the filter criteria to something more generic like “constitutional groups” and “groups dedicated to changing government.”

Ah HA! So it was Obama all along! Just like Nixon!

No. It was the Cincinnati IRS office. There is absolutely no evidence that the White House had anything to do with it.  And the difference between this affair and Nixon’s abuse of power is that Richard Nixon set out to break the law, he did it on purpose and with malice aforethought, and he damned well knew what he was doing.  In the current case, the direction regarding which organizations got extra screening didn’t come from the White House, there was no cover up, and no laws were broken, though the IRS did bend their own rules regarding impartiality – which is what this is really all about. In the Watergate case, the IRS under Nixon’s direction deliberately broke the law, in the current case the IRS acting on its own was attempting to enforce the law.  Big, big difference.

Why Cincinnati?

Because Ohio is a hotbed of liberalism?  Cincinnati is the office that processes all of the tax-exempt applications. Again, the White House had nothing to do with it. Clearly so. Provably so and even congressional conservatives agree with that assessment – well, most of them anyway, the ones that aren’t gibbering white-eyed extremists like the aforementioned capering monkey woman.  Instead of trying to pin it on Obama, the more rational conservatives are now using this event to push for a tax code overhaul, something the President has been calling for since his first term, and a revamp of the IRS itself.

Okay, sure, you’ve convinced us, it wasn’t Obama. Sure. Insert eye-roll. Some low level flunkies put in the filter criteria on their own. 

Yes, because that’s what their office is paid to do. These guys are supposed to be on the lookout for tax fraud. That’s why they call it Be On The Lookout for tax fraud. Should they have used the word “Tea Party?” Maybe. Maybe not. It’s exactly like a police sergeant telling his patrol officers to be on the lookout for red corvettes, because it’s his opinion and his experience that people who drive red corvettes tend to speed more than other drivers. It’s an asshole thing to do, but, honestly, just how egregious is that really? 

Still sound fishy to me. I feel all persecuted and shit.  So, anyway, which patriotic Conservative discovered it?

Actually it was brought to light by an internal review, by the Inspector General for Tax Administration – I don’t know if the inspector was a liberal or a conservative. I don’t think it matter.  What matters is that the system worked exactly as intended.  The IRS itself corrected the situation and informed its superiors in the Treasury Department, who informed the President, who informed the American people.  No cover up. No secrets.

Wait, I though like John Boehner discovered this?

The Inspector General submitted its report to the Treasury Department and the Obama Administration made the announcement on Monday.  It was considered minor, something easily fixed, already fixed. By Monday afternoon, somewhat predictably in retrospect, congressional conservatives had turned it into “the scandal of the century” complete with fireworks and a parade, which replaced last week’s “Scandal of the Century” in the headlines.  Now, again predictably in retrospect, every senator and representative, every holy man and con man, every circus clown and malingering hanger-on has jumped on the bandwagon and declared themselves persecuted by the IRS.  Boehner didn’t discover anything, and couldn’t have even if it was printed on his ass in orange self-tanning lotion, he’s just being an opportunistic asshole who now has to eat his own words. 

How come Obama fired Steven Miller then?

It’s Washington. Somebody had to be fired. Don’t feel sorry for Steve, he’s an IRS agent, you can dunk them in boiling water like lobsters, they don’t feel pain.  

But, but, but this sort of sounds like, um, kind of, not really a big deal.

Yeah. Funny that.

Well, crud. What kind of scandal is this? There’s no guns, no CIA break-ins, no Weapons of Mass Delusion, no LSD in the water supply. Hell, there isn’t even a blowjob involved. How can it be a scandal without blowjobs? Why for all the screaming and gnashing of teeth?

Well, now that’s the real question, isn’t it

See, because there are genuine scandals here. 

Political organizations, blatantly political organizations, are being allowed to commit tax fraud. And the IRS is letting them get away with it in direct violation of their charter and the law. The Supreme Court is letting them get away with it. The President is letting them get away with it. And Congress is most assuredly letting them get away with it.  

And we, us voters, are letting them all get away with it.

These organizations are pretending to be charities and social clubs and we’re pretending to believe them. 

All those organization were approved for tax-exempt status? All of them? None were denied?

That’s the problem right there. 

That’s the real scandal.

That’s the question you should have asked, right there, not, “How many organizations were singled out for review?” or “How can we pin this on Obama?” but “How many of these applications from blatantly political organizations were rejected?”

And so now they get to avoid paying taxes while secretly laundering funds for every giant money machine from the Koch Brothers to Rupert Murdock to Karl Rove to the mob to the UAW to the Mormon Church.  

We sold democracy to these conniving assclowns without even getting a receipt.

With its Citizens United decision, the Supreme Court has turned democracy into a fucking joke for sale to the highest bidder.

So, why isn’t John Boehner up in arms over that? Why aren’t these great patriots, these great constitutionalists, investigating that?

And that’s the real scandal, right there, isn’t it?

 

Ask yourself something: Who benefits from this situation?

Who benefits from being able to wash money through the system and buy politicians and political office anonymously?

Who indeed.

And that, my shiny electronic friends, is the answer to the real question.