Now that the TIGTA report is out, I wanted to follow up on my previous rant (yes, still ranting) about the IRS-Tea Party nonsense. First, just to be clear – I think the IRS mucked it up. They should not have chosen the terms that they chose to centralize the applications. Was it a conspiracy against conservatives? No. Was it poor management, combined with too many applications, too little staffing, and an area of law that is hazy and confusing at best? Absolutely. Should they be scouring the application of every organization (regardless of political affiliation) conducting political activities? Most definitely.
Read more for both a few of my thoughts on the TIGTA report, as well as links to a few others’ writings on this issue that I think are accurate –
1. I love the footnote on page 4 that says that “a future audit is being considered to assess how the EO function monitors I.R.C. §§ 501(c)(4) – 501(c)(6) organizations to ensure that political campaign intervention does not constitute their primary activity.” I predict that audit will be equally critical – for many of the same reasons. Poor management, IRS doesn’t understand the law they are trying to enforce (because it’s unclear), they are understaffed, management and oversight is inconsistent….
2. The report indicated inconsistent treatment of applicants, such as the fact that some were assigned to specialists that shouldn’t have been, and some that were not that should have. Big surprise. Particularly in the last year and half or so, my observation has been that this has been almost every organization’s experience. The IRS is understaffed and charged with overseeing too many organizations, with tens of thousands of new applications coming in each year. With all of the organizations whose status was automatically revoked coming back in for reinstatement – it has been bad for a lot of organizations. It is not directed at organizations sharing values with the Tea Party. Additionally, the law regarding political campaign activity is a mess. Exempt organization attorneys way smarter than I have been pushing the IRS to clarify this area of the law for years. Thus, it is not surprising that applications are not separated out inconsistently (and, additionally, not surprising that inappropriate criterion was used to try to make that happen).
3. Only 1/3 of the applications assigned to that team of specialists were Tea Party-related. We don’t know if the other 2/3 were conservative or liberal in their bent. This to me is just further evidence that the inappropriate criteria were just one of the ways the IRS Determinations folks were trying to centralize the applications. No bad motive. Just a short cut and an unfortunate decision that was not well thought out.
I could go on and on…but really…. Sure, inappropriate criteria were used and management was woefully absent. Applications got dragged out. What the report isn’t talking about is the fact that applications get dragged out longer than 270 days for more than just Tea Party organizations – nonprofit newspapers, anyone? Many of those organizations have multi-year waits. Is that right? No….but it also isn’t a result of bias. I tell every client coming in with international activities that if you get a letter in 9 months, you are lucky. Is that right? No…but again, it isn’t bias. The IRS mucked up big time. But the reality is…this is not evidence of bias, just a agency that is having difficulty working well, period, no matter what the organization’s mission or political bent.
Some other (more) intelligent thoughts on this issue for your reading pleasure:
Scandal Should Prompt IRS to Clarify Rules -- Chronicle of Philanthropy
The IRS and the Tea Party: Where is the Scandal? -- The New Yorker
The Real Scandal Behind IRS-Gate -- Chicago Business
Inadequate IRS Rules Helped to Create Scandal -- Politico