The Internal Revenue Service has had a long sordid history of abuse. Franklin Roosevelt’s son described his father as the originator of using the IRS for political retribution. The Kennedy administration used it to go after Right Wing organizations and there are the many abuses under Nixon. Clinton and both Bushes carried on the fine tradition of using the audit to target groups or individuals with which they had ideological differences. So, in a sense the Obama administration was carrying on a “fine” tradition.
What makes the Obama abuse so egregious is the arrogance involved. Hiding behind the veil of plausible denial and diffusion of responsibility, the administration portrayed the targeting of Tea Party groups as the brainchild of a rogue office in Cincinnati. When that story did not quite play out as spoken, the wagons were circled. At the center of it all was the woman responsible for tax exempt organizations- Lois Lerner. In advance of the publication of an internal audit, Lerner brought the controversy to light through a planted question at a speaking engagement before the American Bar Association. Hence, the rogue Cincinnati office story. But further investigations revealed that the whole scheme was hatched as early as 2011 and that Lerner was present at those meetings. The whole planted-question-and-apology strategy backfired miserably. We also now know that there was congressional pressure on the IRS from the likes of Max Baucus and others to scrutinize exempt organizations. That, however, does not excuse the IRS or Lois Lerner.
As for Obama’s role in the whole mess, I liken this Chris Christie’s culpability in the so-called “Bridgegate” affair. Just as some political underling in the Christie administration thought they were doing their boss a favor, Lerner took her cues from the White House. Christie is best described as a “bully” in words and actions. The closure of lanes on the George Washington Bridge was a furtherance of a mindset and style he laid down within his administration. Likewise, Obama had been demonizing Tea Party groups. Publicly, he demonized the Supreme Court over the Citizens United decision. This atmosphere of demonization drifted down to Lois Lerner and her ilk, just as Christie’s bully atmosphere filtered down to political operatives. Congress will never find the smoking gun memo or e-mail or anything else directly linking Obama to the IRS scandal, just as none was found in Christie’s case. However, that does not mean it did not happen and that it happened on their watch.
Knowing these truths, the more important question is what can now be done? There are two polar opposite views- just end tax exempt status for all organizations versus just stop the definitional nonsense of tax exempt organizations and grant them that status. Removing tax exempt status altogether would likely have a serious chilling effect on donations to these groups. Caught in the wide net would be truly non-political tax exempt organizations from the local PTA and Mother’s Club up to actual political advocacy groups, and religious organizations.
On the other side is the desire to end the charade and just grant tax-exempt status to any organization that accepts donations. This way it does not matter if they have “Tea Party,” “Patriot,” “Progressive,” “PTA,” or “United Way” in their name. Of course, that begs the bigger question: overall tax reform and simplification of the tax code. This one single step would go a very long way to (1) reducing the IRS bureaucracy, (2) reigning in their powers, and (3) making them a tax collection agency, not an investigative one.
The happy medium- absent simplification of the tax code- is to have some independent party or panel review the tax exempt status of groups on an as-they-come basis and continuous. Every two years or so, a group would have to justify their tax exempt status (once granted) regardless of their ideology. The obvious problem with this suggestion is that it too would likely become politicized depending on the party occupying the White House or controlling Congress.
The entire Obama animus against conservative groups stems from Citizens United. To this day, they are still proposing legislation and constitutional amendments to overrule that decision. It is pure, rank hypocrisy. It is the law of the land and the progressive Left has adapted quite nicely. Prior to the decision, six of the top 10 outside spenders were liberal groups. That number dropped to three in 2010 in the wake of the decision, then 4 in 2012 and 5 of the top 10 in 2014. In terms of the biggest political donors, liberal unions annually make up the bulk of the top 10 with over 95% of their donations going to the Democratic Party. The decision evened the playing field and that has stuck in the craw of the Left ever since. And it is this fact that motivated the IRS to act as they did. What better way to chill political speech than through the heavy hand of an IRS audit and bureaucratic red tape? We can end the politicization of the process by subjecting everyone to the same scrutiny and making an audit mandatory every three years. That would seem like the best compromise given the other extreme options.