IRS' Dumb Move May Keep Problem From Getting Fixed

Ezra Klein: Agency must clamp down on all political groups exploiting nonprofit status

By John Johnson,  Newser Staff

Posted May 11, 2013 1:18 PM CDT

(Newser) – The IRS made an incredibly stupid mistake in singling out Tea Party groups for scrutiny last year, but the real travesty is that the agency didn't investigate more groups—Democrat and Republican alike—in similar circumstances, writes Ezra Klein at the Washington Post. The problem here is that political organizations have made a mockery of the 501(c)4 loophole that allows them to file as social welfare nonprofits, a move that allows them to hide their donors. Karl Rove led the way, and the IRS caved. "A lot of people thought Rove would get smacked back by the IRS,” an expert at UC Irvine tells Klein. “It didn’t happen. And then 501(c)4s exploded.”

That's true for both Republican and Democratic groups, and it's the IRS' fault for allowing this "to grow into something monstrous," writes Klein. It never established clear rules—501(c)4s aren't supposed to be "primarily political," but what does that mean exactly? The agency was trying to figure it out when some misguided agents started looking at groups they thought were over-the-top political, like those with "Tea Party" in their names. The fallout has been brutal—witness Sarah Palin's post on Facebook—and Klein fears it's only going to make the IRS "even more terrified" of fixing the problem. Click for the full post.

In this file photo, a Tea Party supporter attends a tax day rally in Independence, Mo.
In this file photo, a Tea Party supporter attends a tax day rally in Independence, Mo.   (AP Photo/Charlie Riedel)
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