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In targeting conservative groups, IRS violated core principles

The Internal Revenue Service staffers who made special inquiries into the tax status of organizations whose names hinted at a conservative political agenda did something a government agency should never do: hassle private groups on the basis of their views. The tax agency has a unique power to reach into the financial affairs of private citizens and organizations, and even basic inquiries can mean endless anxiety and mountains of paperwork for the recipients. Especially because the agency’s leadership is politically appointed, the IRS must go out of its way to apply its far-reaching authority in a neutral manner.

That plainly did not happen when, beginning around 2010, IRS employees assessing groups’ eligibility for so-called 501(c)4 nonprofit status zeroed in on those whose names included such phrases as “Tea Party” and “patriots.” After being warned off that approach, the agency later focused on groups “involved in limiting/expanding Government” and in “educating on the Constitution and Bill of Rights.”

The agents responsible should be subject to discipline. Giving heightened scrutiny to organizations based on the content of their beliefs violates their freedom of expression — as the IRS agents should have known.

At the same time, the current scandal shouldn’t scare the IRS away from monitoring whether political organizations are presenting themselves as nonprofits for the sake of concealing their donors. Under section 501(c)4 of the federal tax code, groups that promote “social welfare” are eligible for nonprofit status; these groups are not required to specify where their money comes from. The rules are too nebulous, and there is a well-justified suspicion that political groups are seeking 501(c)4 status simply to evade campaign-finance laws.

The question became more pressing after recent US Supreme Court cases swept away a number of restrictions on independent political expenditures, creating a sudden outpouring of interest among partisan operatives in promoting social welfare. Led by fledgling groups such as Karl Rove’s Crossroads GPS, 501(c)4 organizations somehow found a way to spend millions of dollars — likely hundreds of millions — on the 2012 campaign, despite their supposedly nonpolitical nature.


Yet the genuine problem of political groups abusing their nonprofit status doesn’t relieve the IRS of the responsibility to act in a neutral way. That may mean conducting random audits of groups applying for that nonprofit status. More helpful, though, would be clear standards for how much political activity 501(c)4 groups can engage in, and more stringent requirements for disclosing donors. Members of Congress who are outraged by the IRS’s conduct should support such efforts.


In any case, there is no reason to believe that the special scrutiny of Tea Party groups was a ploy by the Obama administration to intimidate its enemies. The agents most responsible were front-line employees whose supervisor, who is not a political appointee, told them to change tactics when told of their approach. During the relevant period, the IRS commissioner was a holdover from George W. Bush’s administration.

The wrongful targeting of conservative groups shouldn’t be shrugged off. Rather, it should prod the IRS to seek the tools necessary to expose all political groups that misuse nonprofit status to hide the names of their donors.