The lesson Republicans should have taken from Monday’s IRS hearings is “be careful what you wish for.” One of the recommendations based on the audit is “to conduct a review to assess how the IRS monitors I.R.C. sections 501(c)(4)(6) organizations to ensure that political campaign intervention does not constitute their primary activity.” On top of that, the audit revealed that there were many groups whose political intervention in campaigns should have flagged them for a review.
The Honorable J. Russell George, Treasury Inspector General for Tax Administration, testified Monday in a House Appropriations Subcommittee on Financial Services and General Government hearing on the IRS “scandal”. George based his testimony on an audit in which they found a few things that don’t bode well for conservatives’ “social welfare groups”, since they outspent liberals 34-1 via nonprofits on political issues. Namely, the IRS needs to investigate more of these groups that are “intervening” in political campaigns, not less.
The audit “determined that the majority of the 296 potential political cases we reviewed included indications of significant political campaign intervention.” This means that the majority reviewed were engaging in activities that warranted a review under the law.
George explained that of the 296 cases singled out for review, the majority had indications of significant political campaign intervention. 91 cases did not (31%). Of those 91, only 17 involved Tea Party, Patriots, or 9/12 groups.
The rest were “targeted” but were not Tea Party/Patriot/9/12 groups.
“In addition, while we determined that the majority of the 296 potential political cases we reviewed included indications of significant political campaign intervention, 91 cases (31 percent) did not. Of the 91 cases, 17 involved Tea Party, Patriots, or 9/12 organizations. The IRS disagreed with this finding that the cases did not include indications of significant political campaign intervention.” The IRS did not document why they thought these 91 signaled political intervention, which is one thing the auditors recommend that they fix.
But also, they found that more groups should have been investigated for their political intervention, “We determined that the Determinations Unit specialists did not identify all applications with indications of significant political campaign intervention. As a result, these cases were not referred to the team of specialists for further review.”
They estimate that 175 were not sent for review but should have been, “We estimate that more than 175 organizations with indications of significant political campaign intervention were not referred to the team of specialists for further review.”
Furthermore, nearly three-quarters of the groups “targeted” for inspection were not identified as opponents of the White House, so that blows the idea of being targeted for being a political enemy out of the water.
It was also pointed out that 3,357 applications were made in 2012 compared with 1,735 in 2010, before Citizens United.
George mentioned that inappropriate criteria were used by agents in Ohio, due to a lack of oversight, which was attributable to human challenges (read: lack of funding, and thank a Republican).
The recommendations make the gist of the issue clear. This is not a political scandal, this is a government agency that is understaffed and underfunded, tasked with dealing with a huge influx of “social welfare” groups seeking tax exempt status post Citizens United. These groups were often intervening in political campaigns. The IRS workers were unclear as to how much political work these groups could be doing and still qualify as non profits. That’s the “scandal”. They were, perhaps, not trained properly or overseen enough as they dipped into unchartered waters post Citizens United.
One of the recommendations is that in the future, they are going to make sure that political activity does not constitute the primary activity of these organizations. This is most assuredly not what Republicans had in mind when they started this witch hunt. George testified, “Furthermore, we plan to conduct a review to assess how the IRS monitors I.R.C. sections 501(c)(4)(6) organizations to ensure that political campaign intervention does not constitute their primary activity.” This means that they will want to review more, not less, of these organizations.