American Elephants


The Scandal Heats Up, And it Will Get Worse. by The Elephant's Child

There is far more to the IRS scandal than just the attempt to delay or deny tax exempt status to tea party groups and other conservative groups before the 2012 election, as if that weren’t bad enough. The IRS evaluates the applications of nonprofits for 5019(c)(3) or 501 (c)(4) status. A 501(c)(4) organization can engage in political campaign activity, but that activity must not be the main focus of the organization.  The application of these standards opens the door to discriminatory enforcement.

In the current scandal, the IRS would routinely hold up such applications, sometimes for years, while making demands on the applicant, that were really irrelevant to the status applied for. At the same time, similar applications from liberal groups sailed through with quick approval.  

Separately, the IRS targeted conservatives for audits, especially high-profile donors to conservative causes. There seems to be significant evidence to support that belief. Where the conservative is a wealthy businessman with a complicated tax return, it’s hard to prove that the audit was politically motivated.

Last year, Frank VanderSloot made a sizeable donation to a super PAC supporting Mitt Romney. He signed on as a national co-chairman of Romney’s finance committee. And then the political attack began. The intimidation began in February 2010 when VanderSloot was the subject of hit pieces in left-wing Mother Jones, and by Salon’s Glenn Greenwald. Mr. VanderSloot was surprised by the negative portrayal of Melaleuca, the company he has overseen for more than 25 years.

In April, the Obama campaign named VanderSloot to the first presidential “enemies list” in years. They suggested that eight Romney donors had “less than reputable records. Quite a few have been on the wrong side of the law, others have made profits at the expense of so many Americans.” Their crime was donations to the Romney campaign. In June, the IRS notified VanderSloot that he and his wife would face a tax audit, then two weeks later, the Labor Department informed VanderSloot that it was auditing workers employed at his cattle ranch.  

The third IRS part of the scandal is illegal or improper leaking of confidential tax data. We know they leaked pending applications for 501(c) status to the left-wing media group that publicized them, because ProPublica stepped forward to admit it. The National Organization for Marriage has alleged that the IRS leaked confidential NOM data in order to damage the Romney campaign. Their confidential financial documents were leaked to their rival Human Rights Campaign, and published in the Huffington Post. They have published documents that showed the leaked confidential information did not come from a “whistleblower,” but came directly from the IRS. They will sue the IRS for the leak.

President Obama is “concerned”, “outraged,” at the “insufficient oversight” and “lack of managerial review” at the IRS. The IRS Commissioner has stepped down, and he clearly hopes that we can move on. This strikes me as pure Chicago-style politics brought to the nation’s capitol by the Chicago crew in the White House, Obama, Jarrett, Axelrod, Daley. The IG has found that of the 296 applications filed by conservative groups, more than half were still in limbo, many having been on hold for more than three years. It really doesn’t seem to be a random bureaucratic snafu.

ADDENDUM: About that IRS Commissioner stepping down. It seems that his assignment ended in early June, and so he’s just leaving a couple of weeks early. No big deal. The IRS Inspector General’s report is characterized as “a whitewash”. “These allegations are serious — that there was an effort to bring the power of the federal government to bear on those the administration disagreed with, in the middle of a heated national election”, said Mitch McConnell.




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