Nel's New Day

June 21, 2013

The IRS Argument Deflates

The GOP has been working the IRS manufactured scandal hard for the past month, trying to convince people that President Obama was directly responsible for the use of the term “tea party” to audit organizations in the 501(c)4 category.  Fox and GOP minds ignored the fact that many other organizations—including progressive ones—were audited,  many of the groups audited were certainly political, and that Fox was so eager to disenfranchise progressive groups with the IRS that they asked viewers to file fraudulent complaints.

But the House Oversight Committee, led by Rep. Darrell Issa (R-CA) charged along, inciting the base and cheering them on.  On a Sunday ABC news panel before the case had been investigated, George Will promoted the idea of impeachment by equating President Obama and Richard Nixon and reading a passage from Nixon’s articles of impeachment. He wasn’t alone in his suggestion.

Issa thought he had the proof to back the president into a corner. Weeks ago, he promised to release the full transcripts from the IRS controversy hearings in the Oversight Committee. Then he leaked edited pieces and said he wouldn’t release the rest of them for a very long time, giving the impression that he didn’t have the goods to blame the president.

Rep. Elijah Cummings (D-MD) took offense at the way that Issa was trying to smear the president with the edited transcripts and asked him to release the full ones. Issa sent Cummings a letter scolding him for getting out of line, Cummings responded by saying that Issa had to release transcripts by last Monday or he would, Issa didn’t do it, and Cummings released the full transcripts on Tuesday, leading to Issa’s anger.

The release of the full transcripts backed Issa into a corner. They show that the White House had no involvement in any of the audits.

Although Issa did start his attempt to make hay out of straw in the IRS controversy until a few weeks ago, he knew about the issue years ago. He also knew that a George W. Bush appointee was head of the IRS at the time that he raised the issue with the IRS. But nothing appeared before the presidential election last fall.

Issa’s recent history of manufacturing scandals in the hope of creating problems for President Obama include Solyndra’s loan guarantees, “Fast and Furious,” Benghazi—all Issa’s inventions. What many know less about is Issa’s past.

During his meteoric rise to wealth and power, he was indicted for car theft, arrested for illegally carrying a concealed weapon, and accused of arson. The accusations of deliberately burning down a building for profit and threatening a former employee with a gun did not result in formal charges, but there is enough information to substantiate some of his criminal actions. After Issa was in a car accident, he told the woman he had hit that he didn’t have time to wait and left before police arrived. The woman had to be hospitalized. There were no charges, but he made an out-of-court settlement after being sued.

The chair of the House Oversight Committee entrusted with investigating government wrongdoing and lying claimed to have the “highest possible” ratings during his Army career. In truth, he “received unsatisfactory conduct and efficiency ratings and was transferred to a supply depot.” He also lied when he said that he provided security for President Nixon in 1971 and won a national Entrepreneur of the Year award.

Once Issa’s allegations were punctured, Sen. Mitch McConnell (R-KY) picked up the IRS scandal banner.  At the conservative American Enterprise Institute today, he admitted the president was probably not directly responsible for the audits. Yet in covering for Issa, McConnell tried to connect the president with the so-called scandal by accusing President Obama—wrongly—of personally trying to prove he was innocent. Then McConnell claimed that the situation is part of a government assault on free speech as part of a “culture of intimidation.” Somebody has to be blamed for these audits, so McConnell picked the unions as the responsible party.

McConnell cherry-picks the Constitution like some people do the Bible. In his concern about free speech and intimidation, he ignored the House Rules Committee’s rejection of an amendment that would cut back the NSA’s ability to collect data on U.S. citizens. First Amendment protecting speech good; Fourth Amendment guarding against search and seizure bad—according to the GOP. Although the GOP isn’t happy with the other part of the First Amendment that protects freedom of religion.

The Tea Party bitterly complained—and the GOP House members picked up the cudgel—that more of them had been targeted than progressive organizations. That’s true, mainly because there were far more conservative groups wanting non-profit status for their political spending than progressive ones. The percentage for both sides was most likely the same. But conservatives have succeeded in making the IRS afraid. The GOP doesn’t want justice; it wants destruction of anyone who opposes it.

Now that GOP House members may have to give up salivating over the possibility that they could bring down President Obama with their IRS accusations, they should be concerned with IRS reform. After the Supreme Court gave people what seemed to be unlimited donation power with Citizens United, the criteria for 501(c)(4) “social welfare” nonprofits got even fuzzier. Frustrated by the flood of applications from the so-called nonprofits, some IRS low officials decided that using terms to find these would be useful.

The ambiguity of rules saying “social welfare” is okay but “political intervention” isn’t, gave a great deal of discretion regarding approval to these low-level staffers. The group can be tax exempt if political activity “less than primary.” Staffers had jurisdiction to decide what “primary” is. The inability of the Federal Elections Commission to be effective threw election law oversight into the IRS ball court.

What the GOP managed to largely conceal in all the discussion is that the groups claiming to be social welfare consistently got involved in politics with 80 percent of the advertising money from these groups going to Republican candidates and issues. No wonder, the House GOP has so diligently tried to protect them. In examining over 100 applications for IRS recognition, ProPublica found—surprise!—that the applications consistently said they were not spending money on elections and then did just the opposite. The American Future Fund, a conservative, self-identified nonprofit, spent millions of dollars on campaign ads since 2008—even before it mailed is fraudulent application.

The real disgrace—read “scandal” is not the Tea Party situation. It’s the fact that the IRS favors the wealthy. As Donald Dayen wrote in Salon:

“IRS audits of the largest and richest corporations have steadily declined since 2005, down 22 percent in the ensuing four years and even more from 2011-2013. In the same period, the agency accelerated its scrutiny of small and midsize corporations. Since 2000, the IRS has been more likely to audit the working poor, individuals and families making under $25,000 a year, than those making over $100,000 annually. The middle class received disproportionately more audits throughout the past decade as well. An IRS unit formed in 2009 called the Global High Wealth Industry Group, designed to give special attention to tax compliance of high-wealth individuals, performed exactly two audits in 2010 and 11 in 2011.”

Since 2002, the IRS budget has shrunk 17 percent while being saddled with more responsibilities, including Obamacare and offshore accounts. The indiscriminate 5 percent sequester cut will make the IRS problems only worse. One answer when employees are to do more work with fewer resources is shortcuts to keep up with the workflow. If the GOP wants the IRS to do their job, they should give them the funding to do this. The money spent in that area will help reduce the deficit. But the GOP wants to benefit the wealthy so they will keep the IRS from successful audits of them.

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