Remember how this faux controversy unfolded next time Darrell Issa is talking. He is not an honest man, nor should he be trusted.
In particular, the controversy over IRS scrutiny of Tea Party groups has largely disappeared from the headlines. Considering how much of a political gift that particular controversy was to Republicans, you’d expect them to be upset about this fact. But recent revelations have actually given them cause to celebrate the nation’s short attention span.
It was revealed this week, in fact, that the entire scandal was essentially a set-up. First, acting IRS commissioner Danny Werfel testified that the IRS also scrutinized and challenged groups with names that included “Occupy” and “progressive.” IRS documents released by House Democrats supported his testimony. The IG didn’t uncover targeting of liberal groups because it wasn’t asked to.
The spokesman for the Treasury inspector general noted their audit acknowledged there were other watch lists. But the spokesman added: “We did not review the use, disposition, purpose or content of the other BOLOs. That was outside the scope of our audit.”
We then learned that the entire reason the Treasury Inspector General highlighted IRS scrutiny of conservative groups, but not liberal groups, was because the IG had been instructed to do so by Issa.
(click here to continue reading Issa saved by the news cycle – Salon.com.)
See – no scandal, just partisan political bullshit to attempt to embarrass President Obama’s Administration.
I think the bigger problem is actually the designation that allows political organizations to be tax-free at all. Why this loophole? Eliminate the 501(c )(4) category outright, because it is a joke. Corporations can funnel unlimited cash to these alleged social welfare organizations, untrammeled by disclosure; is that really good for the political process?
To be tax-exempt as a social welfare organization described in Internal Revenue Code (IRC) section 501(c)(4), an organization must not be organized for profit and must be operated exclusively to promote social welfare. Theearnings of a section 501(c)(4) organization may not inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any managers agreeing to the transaction. See Introduction to IRC 4958 for more information about this excise tax. For a more detailed discussion of the exemption requirements for section 501(c)(4) organizations, see IRC 501(c)(4) Organizations. For more information about applying for exemption, see Application for Recognition of Exemption.
To be operated exclusively to promote social welfare, an organization must operate primarily to further the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements). For example, an organization that restricts the use of its facilities to employees of selected corporations and their guests is primarily benefiting a private group rather than the community and, therefore, does not qualify as a section 501(c)(4) organization. Similarly, an organization formed to represent member-tenants of an apartment complex does not qualify, because its activities benefit the member-tenants and not all tenants in the community, while an organization formed to promote the legal rights of all tenants in a particular community may qualify under section 501(c)(4) as a social welfare organization. An organization is not operated primarily for the promotion of social welfare if its primary activity is operating a social club for the benefit, pleasure or recreation of its members, or is carrying on a business with the general public in a manner similar to organizations operated for profit link].
Seeking legislation germane to the organization’s programs is a permissible means of attaining social welfare purposes. Thus, a section 501(c)(4) social welfare organization may further its exempt purposes through lobbying as its primary activity without jeopardizing its exempt status. An organization that has lost its section 501(c)(3) status due to substantial attempts to influence legislation may not thereafter qualify as a section 501(c)(4) organization. In addition, a section 501(c)(4) organization that engages in lobbying may be required to either provide notice to its members regarding the percentage of dues paid that are applicable to lobbying activities or pay a proxy tax. For more information, see Lobbying Issues .
The promotion of social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office. However, a section 501(c)(4) social welfare organization may engage in some political activities, so long as that is not its primary activity. However, any expenditure it makes for political activities may be subject to tax under section 527(f). For further information regarding political and lobbying activities of section 501(c) organizations, see Election Year Issues, Political Campaign and Lobbying Activities of IRC 501(c)(4), (c)(5), and (c)(6) Organizations, and Revenue Ruling 2004-6.