Daily Hampshire Gazette - Established 1786
Hi 25° | Lo 7°

Jim Palermo: IRS ‘scandal’ is hardly that; agency needed to vet bids for tax exemption

SOUTHAMPTON — The alleged Internal Revenue Service “scandal” regarding supposed targeting of conservative organizations seeking tax-exempt status is a glaring example of how public apathy, political hyper-partisanship, arrogance and just plain greed coalesce to form an ugly sludge that threatens to suffocate our democracy.

Apathy takes many forms in America, from low voter turnout to the shocking ignorance of citizens about how government works. In a recent survey, an alarmingly high number of respondents did not know the name of the vice president.

With regard to the IRS, few people read the Inspector General’s report, or sought objective facts, before joining the chorus of people willing to accuse the government of malicious malfeasance, meriting employment terminations and prison terms.

Political hyper-partisanship inspires blow-hard legislators on the House Ways and Means Committee to pre-judge, ridicule and yell at witnesses whom they accuse of mismanagement and criminal behavior.

Do good managers berate employees? Do good managers conduct fact-finding hearings with their minds made up? Do good managers block legislation through filibusters or refuse to allow Congress to vote on gun control?

And as for greed, the most bellicose members of Congress seem focused on fixing blame rather than fixing the problem, because they are playing to the people who raise money to finance their campaigns. I believe that much of this feigned outrage by conservatives is intended to undermine confidence in government so that they can fulfill an agenda to shrink government and to privatize as many of its functions as possible — schools, Social Security, Medicare and the U.S. Postal Service, for example.

The Treasury Inspector General’s investigation found that inappropriate criteria were used by low-level IRS employees charged with screening organizations seeking tax-exempt status, but that there was no evidence that influence was exerted from outside the IRS in identifying organizations for scrutiny.

Many of these organizations operated as tax-paying organizations prior to the Supreme Court’s Citizens United decision, and nothing the IRS did or failed to do would have prevented them from continuing to function in that capacity. Rather, they were seeking to be excused from continuing to pay taxes. The IRS employees where therefore required to exercise due diligence when screening 501(c)(4) applicants to see if they were “primarily” engaged in activities to further the public welfare, or “primarily” engaged in partisan political activity, in which case they would not be eligible for tax-exempt status. If you are scratching your head over the difference between the two forms of activity, imagine the consternation of the IRS employees, who had no guidance as to how to make such determinations. Thus the finding by the Inspector General that there was poor management by IRS officials.

So what was the harm? Other than possible delays in the processing procedure (which might have been exacerbated by reduced staffing levels) none of the “targeted” organizations was denied tax-exempt status. The Inspector General’s conclusion that it was “inappropriate” for the IRS to request certain information, such as the names of donors to the organizations under review, is the conclusion of one man, who if he had raised that objection in a court of law could have been overruled by the presiding judge.

While the IRS did not object to the IG’s conclusion, I think I would have. In determining if an organization is “primarily” political, is it not relevant to the inquiry to know whether their most significant contributions came from the national committees of a political party, or from a candidate for election to public office? Such information, in my opinion, is relevant. But let’s say the IG was correct: Do we have here anything more than a screw-up by employees faced with an overwhelming task? The ire came from the organizations complaining to their friends in Congress, who then turned the screws on the IRS and seized the opportunity to make political hay.

The president erred in responding as he did to this alleged “scandal.” I would have preferred his standing behind the IRS and exposing the Congressional outrage for the charade that it is. But that would be risky: No one likes the IRS; to defend the agency would be an enervating distraction.

Objective, detailed analysis of this matter is too nuanced for public dialogue. It is far better for the media — with countless hours of air time to fill — to latch on to this juicy tidbit. And, it is just too good an opportunity for Republicans to embarrass the president and it is too risky for Democrats to defend the loathed IRS.

Perhaps all this is just “the same old, same old,” but I yearn for a better day.

Jim Palermo lives in Southampton.

Legacy Comments0
There are no comments yet. Be the first!
Post a Comment

You must be registered to comment on stories. Click here to register.