Independent Groups
Washington Post: Groups that sought tax-exempt status say IRS dealings were a nightmare
By Josh Hicks and Kimberly KindySome groups, including several interviewed by The Washington Post, were asked to provide names of donors or membership lists, which experts say the IRS cannot legally do. The agency also demanded names of board members, copies of meeting minutes and résumés, details of community organizing efforts and numerous other details, according to questionnaires obtained by The Post.“It was pretty much a proctology exam through your earlobe,” said Karen L. Kenney, the coordinator for the San Fernando Valley Patriots, a tea party group in Southern California that was sent an IRS questionnaire with more than 100 questions on it.
Wall Street Journal: Democrats Press Obama Over IRS
By PETER NICHOLAS and COLLEEN MCCAIN NELSONAt a House Financial Services Committee hearing Thursday, Republican lawmakers pushed Securities and Exchange Commission Chairman Mary Jo White to abandon plans to require such spending disclosures, saying the IRS scandal illustrated how information can be misused.“Given the ongoing concerns being raised by the American public about this administration’s attempting to bully organizations that disagree with them politically…can you commit formally today to removing the mention of a corporate political-disclosure requirement?” Rep. Scott Garrett (R., N.J.) asked Ms. White, who said that the SEC was still reviewing the issue.
Nonprofit Quarterly: Ten Festering Wounds in the Obama Administration’s IRS Scandal
By RICK COHENLois Lerner’s admission that some IRS agents in one office (Cincinnati, which is charged with nonprofit reviews) had subjected Tea Party and other right wing groups to over-the-top grilling over their applications to become 501(c)(4)s took place on Friday. Everyone in Washington knows what a Friday news leak is: a story meant to fade away over the weekend. If the question at Lerner’s presentation at the American Bar Association that spurred her acknowledgement and apology for the behavior of the IRS wasn’t teed up, the timing and content of the answer certainly was. With an Inspector General’s report to be released soon after, Lerner and her colleagues knew the story was about to break. Her ability to answer with a statement that seemed all but rehearsed was an attempt to make the story happen on a Friday and have it die in the Saturday papers. Except in the new world of social media, it doesn’t work that way. By the time Lerner left the ABA conference dais, the audience was looking at the Associated Press story reporting on Lerner’s ABA admission that had already run. One lawyer grabbed Lerner as she made her way out of the room and showed her the story on his cell phone. The attempt to have the story wither over the weekend failed—embarrassingly so—as a statement of disrespect to the public that deserved not to be manipulated and played by the White House press controllers.
NY Times: A Unique and Useful Purpose
By Rosemary FeiJust as 501(c)(3) organizations are often referred to as “charities,” those exempt under 501(c)(4) are called “social welfare organizations,” sometimes described as a step down from charity, or “charity-lite.” What’s the difference? Unlike charities, (c)(4)’s cannot offer their donors charitable contributions deductions on their income taxes, a serious disadvantage in fundraising; the trade-off is that (c)(4)’s can engage in unlimited lobbying in furtherance of social welfare (charities can do some), and in some candidate electoral activity (how much is debated; charities cannot do any). In addition to being more empowered politically, (c)(4)’s are permitted to confer somewhat more benefit on their members, their neighborhood or some other group that cannot qualify as a charitable class.The types of organizations who have historically occupied the (c)(4) niche follow directly from these differences. The Sierra Club, the AARP and the National Rifle Association, to name examples, are too politically engaged to be charities, yet they work toward what each believes will be a better world. Charities who find Section 501(c)(3)’s restrictions hamper their advocacy, often create a (c)(4) affiliate to pursue their lobbying agenda. Health maintenance organizations, low-income housing providers and homeowner or neighborhood associations are all examples of groups that may confer too much private benefit on their members, tenants and residents to qualify for (c)(3) status, yet their contributions to the social welfare are undeniable and warrant their continued exemption from federal income taxes.
Wall Street Journal: Ousted Tax-Agency Head to Testify at Hearings
By JOHN D. MCKINNON and SIOBHAN HUGHESLawmakers prepared to grill the ousted head of the Internal Revenue Service as well as an IRS watchdog Friday as they seek to understand officials’ motivations for the targeting of conservative groups and the failure to disclose those actions.The hearing before the House Ways and Means Committee is likely to expand into other issues, including the disclosure of confidential IRS application forms and private tax information last year. Some lawmakers also are interested in finding out whether agency officials were influenced by political motivations, despite prior IRS denials.
NY Times: Take Politics Away From the I.R.S.
By THE EDITORIAL BOARDNonetheless, there is a clear reason this problem kept arising at the I.R.S., and it is the same reason that social welfare groups were allowed to overrun the political process with secret cash in the last three elections. There are no clear standards for how much political activity a 501(c)(4) group can undertake, or even a clear definition of what political activity is.
Corporate Governance
Wall Street Journal: In Wake of IRS Scandal, a Push to Nix Disclosure of Corporate Political Cash
By ANDREW ACKERMAN And SCOTT PATTERSONWASHINGTON—Republican lawmakers sought to leverage the Internal Revenue Service’s targeting of conservative groups to thwart a controversial regulatory effort that could require publicly traded companies to disclose political contributions.At a House Financial Services Committee hearing Thursday, Republican lawmakers pushed Securities and Exchange Commission Chairman Mary Jo White to abandon plans to require such spending disclosures, saying the IRS scandal illustrates how information can be misused.
USA Today: SEC rejects calls to stop political disclosure work
By Fredreka SchoutenRepublicans said an SEC disclosure rule could be viewed as a partisan action and could hurt the agency’s reputation.Rep. Scott Garrett, R-N.J., urged White to drop consideration of the measure, citing concerns “about this administration’s bullying of organizations and groups that disagree with them politically.”Rep. Jeb Hensarling, R-Texas, the panel’s chairman, called the petitions “part of a partisan political agenda of labor union bosses” and questioned why the SEC is devoting resources to the disclosure proposal when it has not completed regulations dealing with the sweeping 2010 Dodd-Frank banking overhaul or the JOBS Act, which passed last year and aims to make it easier for start-ups to raise capital.
Candidates, Politicians and Parties
Roll Call: IRS Scandal Falls Right in McConnell’s Wheelhouse
By Niels Lesniewski and Emily CahnAn expansive view of the First Amendment when it comes to political speech has been a signature issue in McConnell’s Senate career. He led the crusade against the 2002 campaign finance overhaul championed by Republican Sens. John McCain of Arizona and Russ Feingold of Wisconsin even after enactment, taking the case to the Supreme Court.On the issue of the IRS targeting conservative groups for extra scrutiny, McConnell’s world has collided with his critics’. It’s a situation that should work to McConnell’s benefit back home. On Thursday, he found himself flanked by tea-party-backed stalwart Reps. Michele Bachmann of Minnesota and Steve King of Iowa as a featured speaker at a news conference outside the Capitol.The article continues: “These horror stories of the government attempting to quiet the voices of critics is apparently rather — rather rampant, and it’s interesting to note that the IRS apparently even gave to a left-wing group, ProPublica, information on one of the conservative groups before their tax status had even been established. This is runaway government at its worst. Who knows who they’ll target next,” McConnell said, noting he expected a full investigation on Capitol Hill. “The truth will come out. It always does.”
State and Local
Wisconsin/Texas –– Wisconsin State Journal: Texas tea party group says IRS asked about its connection to Wisconsin recall battle
By STEVEN VERBURG and DEE J. HALL“The Verify the Recall questions are one of the more blatant examples of what the IRS is trying to do to us,” said Catherine Engelbrecht, leader of True The Vote, a Houston-based group that helps tea party organizations across the country look for voter fraud. “They are asking them to be informants. That’s not what a nonprofit application is meant to serve for.”
