The IRS nonsense continues...

Unfortunately (in my opinion), the news cycle has still not moved off of the IRS muck-ups.  I think that the continued focus on this, as well as the developments (in terms of staff/institutional knowledge lost), are disappointing.  Below is a collection of news stories I have found interesting and/or accurate recently, along with my commentary.

1.  While I understand that, from a management standpoint, the IRS mucked up, I was very disappointed to see that Lois Lerner, head of the IRS' Exempt Organization Division was put on administrative leave (because she refused to resign) [for more information on that, click here].  The loss of Lois, along with Joseph Grant [for more info, click here], has resulted in removing people from the IRS who understand the intracacies of exempt organization tax law, and replacing them with people with no experience in that arena.  Replacement by individuals with no experience with exempt organization tax law is a little counterintuitive to me -- particularly in light of the fact that the real reason behind this mismanagement is that this area of the law is unclear, at best.  The IRS' Exempt Organization division has lost many other experienced employees in the past couple of years -- which I can't help to think has contributed to the mess the IRS is in.  My experience with the IRS is that it can be difficult to speak with someone who has enough experience to understand the subtle nuances that are intrinsic to properly overseeing the tax exempt sector.  Throwing more people in there that have to play catch up in terms of their understanding does nothing but increase the likelihood that even more organizations will be ill-served by the IRS.

2.  ProPublica continues to say really intelligent things on this topic (in my opinion).  Check out this article for some of the nuances that the general public/media don't seem to get.

3.  If you read the above, then you know that what is "political" is a facts and circumstances analysis every time.  Thus -- if you read this article in the New York Times, how can you fault the IRS for wondering if some of these groups potentially would not qualify as social welfare organizations?  Marc Owens notes in the articles that half of the questions asked have been found to be germane when under a court's scrutiny.  I cannot attest to having Marc Owen's level of knowledge -- but I can say that many of the questions looked completely reasonable to me -- particularly in the context of trying to determine what is political.  If we tax lawyers have trouble articulating it - I would assume that the agents have trouble deciphering the responses they are receiving (particularly if the applicant is not represented by an attorney, or if they are, not by an attorney that regularly works in this area).

4.  While I don't agree with King's first assertion quoted in this article (that there was improper targeting), I say "Amen" to his second -- that the real issue we should be focusing on is the fact that 501(c)(4) organizations are being used to circumvent campaign finance laws and funnel money into elections.

 

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