click for ginormous infographic
irs blunder

 

 

IRS: Bureaucratic Blunder or Political Profiling
Source: TopAccountingDegrees.org

 

Category: Digital Media, Taxes and Policy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

61 Responses to “Bureaucratic Blunder or Political Profiling at the IRS?”

  1. Chad says:

    Really good graphic. Shows that it is a problem, but by no means the massive problem being promoted by the news or congress. The arrest of the US journalist dwarfs this issue in importance.

    • ComradeAnon says:

      “.. but by no means the massive problem being promoted by the news or congress.” Applies to about 98% of issues.

  2. Expat says:

    I am not a fan of government or those who get elected to it, but the behavior of the right is getting pathetic. What would be their reaction if the IRS had been caught targeting liberal (Democratic) minorities receiving benefits? Fox News and the Tea Party would be cheering for the IRS and demanding more of the same.

    If God exists, he is either a total asshole or has a sick sense of humour.

    • ComradeAnon says:

      Another example of that there Liberal Media.

    • jpr says:

      Not sure what God has to do with it….but even if your implications about Fox News’ agenda are correct, is Fox any match for ABC,NBC,CBS,MSNBC,Comedy Channel,CNN,CNN HN,CNN International,HBO,Universities/Colleges,Public Schools,Federal Courts,Hollywood (big screen and small screen), etc.

      Are you really that threatened by one news channel (btw a news channel that features: Juan Williams, Geraldo Rivera, Shep Smith, and Kirsten Powers).

      • Expat says:

        ’m not threatened by one news channel. Fox is merely to most vocal, lunatic face of American “conservatism”. I am not left wing either. But I don’t see the same kind of insanity on the left as I see on the right. Democrats and liberals have mostly gotten past the sixties and seventies and moved on to adult conversation and serious agenda while the Right is stuck in the Bible and Soviet fear-mongering.

        If Fox and you believe that Obama is left-wing, then you need anti-psychotics. I ask you to point out one Obama policy which is left of Bush or Nixon. And if you point to Obama-Care, I will bet you $100 that if Obama care is at risk of being overturned, you will see the Big Pharma, the AMA, and the entire healthcare industry rally Washington to save it in a manner that would make AIPAC look like a PTA fund-raiser and campaign.

        If I were a Republican, I would be thrilled to have Obama in the White House. If I were a Democrat, I would not feel that way. As it stands, I am neither and frankly would like to ship every elected official in the US to Gitmo for re-education.

      • jpr says:

        Name one policy that Obama is to the left of Bush and Nixon? I don’t know, how about tax rates? Btw please inform me of what “the serious agenda” is ‘cuz it seems to me that every policy issue the Dem’s champion revolves around spending money they don’t have….not sure how that represents adult-like behavior.

        To your second point (re:Obamacare), you imply that “big pharma” is a republican enterprise?…not sure I follow. Pharma chases neither party, only profit just like any other industry. As a matter of fact, Big Pharma and the Health Insurance industry friggin’ wrote Obamacare (just one example: http://www.guardian.co.uk/commentisfree/2012/dec/05/obamacare-fowler-lobbyist-industry1).

        As to your third point, I bet your correct, a lot of RINO’s do love having Obama as pres, so we agree on something. In fact the Repub’s last two pres candidates were/are virtual Dem’s (see McCain on immigration policy, see Romney on Romneycare). Repub’s haven’t had a real conservative since Reagan, so I’m not sure why you come off sounding so threatened.

      • DeDude says:

        jpr,

        Taxrates!!! – are you kidding us? Have you looked up the tax rates of Nixon and Bush I ??

        Dem’s spending money they don’t have – presuming that phrase is about deficit spending have you looked at that number under democratic vs. GOP presidents???

        I guess if the narrative speaks to you then the data is irrelevant

      • jpr says:

        To DeDude below:
        Nice selective history lesson on tax rates. We had 8 yrs of Bush II and 8 yrs of Reagan you have conveniently left out. Bush I was a liberal in almost every sense of the word (try to actually read my above comment before you kneejerk). Nixon “inherited” a legacy of ridiculously onerous tax rates (and Dem majorities in both houses) that successfully kept the US economy in the ditch for over a decade. So not sure how you can even site his tenure as a useful example.

        The current Dem admin. has raised taxes on every dollar you earn above 21k, so what are we debating again, I forget???

  3. Low Budget Dave says:

    I am amazed that the GOP and the media have been able to turn this into a “scandal”. If you cheat on your taxes, you are supposed to get audited by the IRS. I heard the Tea Party on the news the other day refer to it as “tyranny”.

    No, “tyranny” would be if they hauled you away and killed you. Taking an extra year to do their job is “doing their job.”

    The “Tea Party” is named after the most well-known refusal to pay taxes in American History. If I named my organization “Don’t-Pay-Taxes, Inc.”, I should expect the IRS to be suspicious of my claim to tax-free status. Anything else would be a scandal.

  4. postpartisandepression says:

    The only thing this leaves out is that Shulman, under which this all started, is a republican appointed by Bush. Does anyone in his right mind think that he did it to “get” his own party.

    There is no story these groups have proliferated simply because they are tax exempt and want to keep their donors anonymous. Lets solve this by eliminating all of them – no politics allowed.

    • Chad says:

      I agree. Just eliminate all of them. Of course, then the right would be saying the liberals were singling them out because over 80% of the money in these 501 organizations is conservative. It’s a no-win situation, because no one cares about the truth/facts, only about belief.

    • jpr says:

      Big deal, Stevens, Breyer, Kennedy, Souter are Supreme Court justices appointed by Republicans yet all have been overwhelmingly liberal in their court rulings. To suggest that a political appointment is entirely/inherently politically driven is to reveal that you clearly think like a Democrat apparatchik. Btw, might I remind you, Chief Justice Roberts (tie breaker in Obamacare ruling) was a Bush II appointment.

      If you disagree, please list the conservative Supreme Court justices nominated/appointed by Dem Presidents.

  5. rd says:

    I think Citizen’s United will go down in history as a second tier bone-headed decision by the Supreme Court (things like Dred Scott which fundamentally took away human rights are first tier in my mind). The concept of companies and organizations being awarded personhood rights is almost fascist.

    I am surprised at how few unresolved applications there are as delay and indecision is the ultimate weapon of bureaucrats embedded in an incoherent morasse of public policy quagmire which is the current status of tax exempt organizations.

    I haven’t seen anything to date to tell me it isn’t a bunch of bureaucrats who made some arbitrary and misguided decisions while trying to do their job.

  6. mongbat says:

    Planned Parenthood alone has an operating budget of over $1 billion. It is also a nonprofit. Can someone help me understand why it isn’t counted? Is it not the same kind of charity? How did the creator of this infographic decide who was Liberal and who was Conservative? How does he define “political spending”? How much of that $1b is spent on lobbying and pressure groups?

    • chasyyy says:

      Planned Parenthood is a 501(c)3 organization, not a 501(c)4 which is what the discussion is about.

      • mongbat says:

        Planned Parenthood does have a 501(c)4 as part of its structure.

      • DeDude says:

        mongbat,

        And how big is that tiny little piece 1 million? kind of important to get that straight, isn’t it?

    • WallaWalla says:

      Planned Parenthood isn’t counted because medical procedures make up 67% of its yearly expenses. Public policy spending makes up only 5%. Therefore, it is _primarily_ promoting the general welfare of society.

      Here’s PP’s annual 2011-12 budget report:
      http://issuu.com/actionfund/docs/ppfa_ar_2012_121812_vf/9?e=1994783/1441572

      • mongbat says:

        The public policy part… is that all defined as lobbying? 5% of a billion is $50mil, and more than the $34mm TOTAL claimed paid to liberal groups. I’d like a practicing lawyer’s opinion on this, as it’s getting kind of weedy, now. Better yet, attribution on that little infographic might help.

  7. mongbat says:

    And for that matter, what exactly is the problem with large dollars going toward either lefty or righty-leaning groups? Does it not stand to reason that the spending would ramp up in response to the fact that a leftist is in the White House? Who WOULD be spending right now? Are we pretending like the Right has other avenues of getting their ideas out? Who is advocating for them George Stephanopolous? Keith Olberman? They’ve got Fox News and that’s about it. That energy and interest has to go somewhere, and I can’t blame the press for trying to make this sound sinister. It’s threatening their guy, and it’s threatening their sinecure as The Voice of the People. I think this is a losing battle for the Left. Just own up to the fact that the left-leaning bureaucracy got overzealous and broke some pretty important rules, and clean it up.

    • ComradeAnon says:

      You should really watch something beside Fox or Glenn Beck, or read something besides Weekly Standard or Breitbart or Drudge.

    • Chad says:

      The right is limited in getting their ideas out, so it’s ok to make this a bigger deal than it is? What kind of reasoning is that?

      On top of that, if the right only has Fox News to get this out, how or why is “the press” trying to make this sound sinister? Wouldn’t that mean there are more press allies for the right than you suggest?

      The administration should own to what has been done and fix it, but we all know that won’t make this go away. The Republicans aren’t bringing this up because they want it fixed, that’s secondary.

    • Angryman1 says:

      Obama a leftist lol……………..guy is a Bob Dole Republican

  8. louiswi says:

    Congress made as law using the words “operating EXCLUSIVELY for the promotion of social welfare”.
    ALL discussions/complaints/bullcrap arguements made by the GOP or their counterparts are bogus and unrelated. Period.

  9. mongbat says:

    Louiswi, I am afraid that you unintentially sound like My Cousin Vinnie now. “Everything that guy said is B.S.” Congress changed the law in 1959. Even the flawed infographic notes this.

    Things picking up at work. Hope to keep an eye on this thread today.

  10. mongbat says:

    Excuse me. I need a class in remedial reading. The IRS guidelines changed. My regrets. That said, the rules have been in place since 1959. Come on now.

  11. Gnatman says:

    If your duty is to inspect, audit, verify, test… and the manpower to perform has been cut momentarily or permanently, how and what to test is usually predetermined based on new criteria or sample techniques. Risk analysis gives management the areas to shift resources for risk mitigation. The IRS seems to have done all that by testing predetermined samples (based on the name of group) and predetermined criteria (the questions about donors, running for office, etc).

  12. We recently were granted 501c-3 status for a public botanical garden, and that was the office we dealt with. I cannot express in words the levels of incompetence and incoherence we encountered. I could draw a picture, but it would not be safe for family viewing.

  13. tracycoyle says:

    When I see something that disabuses me of a ‘conventional wisdom’ or common ‘meme’, I try to understand the details so I can correct my thinking. But when a detail that I know something about is wrong, I wonder how much of the rest is wrong too but I don’t know better.

    The IRS part of the Treasury Budget was $8.5b in 2000, $9.5b in 2002 and 12.7b in 2012. So, it’s budget is up 53% since 2000 and 33% since 2002…even accounting for inflation, the IRS budget is higher now than at any time in the last 12 years. This is just one detail in a larger picture that might otherwise all be correct….but if one item is fudged….

    • Gnatman says:

      The overall budget data you provided may be true, But you did see that the manpower specific to this task had been 32 and now 14. Oversight and auditing are different than most mainstream professions.. Not many laymen have any idea of that profession.

  14. agronox says:

    What a mess. How much of this is bungling because of incompetence versus understaffing, I wonder? It’s part of the “starve-the-beast” ratchet: they suck, so let’s cut their budget, so that they’ll suck more, so we can cut their budget, ad infinitum.

    And I don’t know why they use the IRS Records logo in there, but I like it. :)

  15. Moss says:

    Agree with eliminate them all. They have completely perverted the democratic process.

    Tea Party.. what exactly is it a Party of? If the name alone does not insinuate political than I guess I have been under a rock since 2010. Then again what’s in a name?

  16. sellstop says:

    I’m catching a lot of flak for this that I wrote and was printed in the local paper:

    A few words on this IRS “scandal” that is sweeping over the political landscape.

    What do we hire the IRS for? Are they not hired by the American people to collect taxes and prevent or bring to justice tax fraud?

    Regarding the fraud prevention role. If I was running an organization with the goal of preventing tax fraud, and I was getting applications from organizations that proudly proclaimed an ideological opposition to paying taxes and who were applying for tax-exempt status, I would give those applications special scrutiny. Isn’t that the job of the IRS?
    The fact is that the IRS has had its budget cut by 17% per capita since 2002 at the same time that the U.S. Supreme Courts “Citizens United” decision resulted in a deluge of requests for tax-exempt status. The “Exempt Organizations Division” of the IRS, which processes these claims was inundated with 2,774 requests for tax exemption last year. Compared to1,741 in 2010. Data from David Levinthal at the Center for Public Integrity.
    One of the first groups to request and recieve 501 (c) (4) tax-exempt status in 2010 was American Crossroads. An organization devoted to “Electioneering Communications”. A 1963 federal appeals court ruled that, “the organization must be a community movement designed to accomplish community ends.” American Crossroads is run by Karl Rove and Ed Gillespie. Steven Law, former general counsel of the U.S. Chamber of Commerce, and chief of staff to Senate Minority Leader Mitch McConnell of Kentucky, is the president of the group. Congress requires the Internal Revenue Service to review all applications for tax-exempt status to weed out those that are partisan, political, or that generate private gain. What happened there?
    If I was applying for a U.S. visa and I gave my employers name as “Islamic Jihad” wouldn’t I expect extra scrutiny of my application for a visa? And as an American who expects Immigration and Customs to keep terrorists out of the country, don’t I expect extra scrutiny for groups who proclaim an antagonism to this country? Is this any different from a group calling it’s self “Tea Party” and seeking tax exempt status.
    This tempest is just the latest in a long series of “scandals” generated by right wing hacks who go by various names including Tea Party. Their assault on the U.S. Federal government is due to a misguided belief that it is the spending by the federal government that is holding the U.S. economy down. Unfortunately, they were no where to be found during the years that individual debt in this country was soaring to all time highs during the greatest real-estate bubble in world history. But, the “Reagan Revolution” lives on, working to keep wages down and corporate profits at record levels. And the working man is told by the Teabaggers that it is the fault of the big government in Washington. The tragedy of the situation is how the politically correct on both sides fall in line to badmouth civil servants who are trying their best to serve the public. Pathetic!

    • Chuck says:

      If I understand 501(c)4 correctly, as long the organization does not have “direct or indirect participation or intervention in political campaigns on behalf of, or in opposition to any candidate for public office” (from Wikipedia) it meets the requirements, even if it is a controversial issue. It is the job of the IRS to apply the SAME scrutiny to anyone applying for tax-exempt status REGARDLESS of the groups beliefs. The fact that one group believes in paying taxes and another does not should not have any bearing on the decision making process – it should be done based on pre-determined criteria for acceptance or rejection.

      Also, Comparing to Immigration and Customs is the wrong analogy. From the ICE’s web page; “. . . . . ICE’s primary mission is to promote homeland security and public safety . . . . .”. It would be perfectly appropriate to give extra scrutiny to anyone connected to recognized enemies of the state, or to groups known to be associated with acts of terrorism.

  17. Chuck says:

    Two Questions come to mind:
    1) Who determines “the common good and general welfare?” For example, some believe abortion is a “common good” and others think it is a “common bad.”

    2) Why ‘Flag’ anything? If 501(c)4 applications are prioritized and processed according to the date received, following pre-determined guidelines and criteria for determining eligibility, it will take x days/weeks to process an application. If the volume of applications increase (assuming no additional resources are added) then the number of days/weeks it takes to process increases.

    • Civics 101: Interpretation of Legislation is the purview of courts.

      • Chuck says:

        Understood, however I was attempting to point out that given the broad definition the interpretation of “common good and general welfare” will depend largely on the interpreter and will be inconsistent from one IRS administration to the next.

      • mongbat says:

        And the IRS has discretion in the regulations it puts in place as it (hopefully) faithfully executes the will of the Legislature. I do agree that this will end up in court.

      • Joe Friday says:

        Indeed.

        And as there is no legal requirement to apply for 501(c)4 tax-exempt status, one can simply file that way, and if subsequently challenged, end up in court.

        Where it is highly likely they would have lost.

        Better to try and scam their way through the application process and yell victim if scrutinized or denied.

  18. Bridget says:

    Four Pinocchios have been assigned by the Washington Post to the IRS response to the Perfect Storm as depicted in the graph:

    http://www.washingtonpost.com/blogs/fact-checker/post/a-bushel-of-pinocchios-for-irss-lois-lerner/2013/05/19/771687d2-bfdd-11e2-9b09-1638acc3942e_blog.html#pagebreak

    “In other words, while there was an increase in 2010, it was relatively small. The real jump did not come until 2011, long after the targeting of conservative groups had been implemented. Also, it appears Lerner significantly understated the number of applications in 2010 (“1500”) in order to make her claim of “more than doubled.””

    The scrutiny of the organizations is not the issue, it is indeed the job of the IRS to insure that organizations given 501c4 or 501c3 status are properly vetted. The issue is whether or not the IRS singled out certain sorts of organizations for scrutiny. To date, I am unaware of any reports indicating that the IRS flagged applications containing terms such as “Progressive”, “Anti-War”, “Social Justice”, “Environmental”, “Peace”, “Civil Liberties”, and so forth.

    • Joe Friday says:

      Worthless.

      Glenn Kessler has a track record of being an ignorant and uninformed ass.

    • theexpertisin says:

      Even more sinister is the apparent channeling of confidential tax records to leftist organizations for use as ammunition to selectively screw centrist and conservative entities.

      That educated folks seek to avoid, obfuscate and/or explain away this abuse of power is a fascinating illustration of how low we can go in society to justify IRS tactics if the “other guy’s” ox is being gored.

      • Angryman1 says:

        your a mumbling mess. where was the “channeling”, like where? Typical internationalist post.

      • theexpertisin says:

        After snickering at this poorly spelled, wrongly attributed Angryman 1 rant, I rest my case.

      • 873450 says:

        Someone’s comment contains funny grammar, spelling or punctuation errors. For that it is derided and dismissed.

        So where’s the evidence supporting your accusation?

        “Even more sinister is the apparent channeling of confidential tax records to leftist organizations for use as ammunition to selectively screw centrist and conservative entities.”

        I am reminded of Darrell Issa vowing to continue investigations searching for evidence supporting his already stated conclusions.

    • 74Dodgedart says:

      The Atlantic has published an (incomplete) list of organizations that received special review. Quite a few of them include the terms “Progressive”,”Progress”, etc.

      http://www.theatlantic.com/politics/archive/2013/06/proof-the-irs-didnt-target-just-conservatives/276536/

      I think everyone agrees that the IRS screwed up. The real questions are: “How high did it go, How should it be fixed?”. To date, I am unaware of any evidence indicating that it goes beyond some mid-level bureaucrats.

      • I am not sure. These are supposed to be nonpartisan organizations, and on both sides o the aisle, they are clearly partisan.

        That does not qualify under the law

      • 74Dodgedart says:

        The point of my post (a response to Bridget’s post) is that there is evidence that the IRS did give special review to liberal\progressive groups as well as conservative groups.

      • Bridget says:

        74Dodgedart, yes, some liberal/progressive groups were also reviewed. That information was in the IG report, which I have read. But liberal/progressive groups were not targeted in the way conservative groups were. The IG report stated very clearly that inappropriate criteria were used to identify potential political cases.

        I think we would both agree that BOLOing groups based on their political philosophy rather than their propensity to engage in improper political activity is wrong.

    • Angryman1 says:

      To date, your not paying attention. These groups are always flagged out. But they didn’t have billions of overseas dollars flowing into their coffers starting up “grassroot” organizations.

  19. Bridget says:

    He may well be, I have no idea, but even ignorant and uniformed asses find an acorn every now and then.

    What, specifically, are the flaws in his presentation?

    • Joe Friday says:

      He may well be, I have no idea, but even ignorant and uniformed asses find an acorn every now and then.

      But when you’re that bad, you don’t get credit for just for stumbling into the truth once in a while.

      What, specifically, are the flaws in his presentation?

      My past experience has shown that when people ask that, and I exhaustively offer a point-by-point debunking, they then merely move the goal post.

      No thanks.

      I think somebody does a Kessler Watch or some such thing, perhaps they will cover it.

      • Bridget says:

        I got it covered. On the specific issue that the targeting of conservative groups started before a perceptible increase in applications, Kesslers 4 Pinocchios is borne out by the data in the IG report.

      • Joe Friday says:

        You got it covered.

        If it makes you feel better, then you just keep tellin’ yourself that.

  20. Livermore Shimervore says:

    “Targeting”… “Presidential abuse of power”.

    Oh- Kay let’s get real here. First if this were Bush checking the tax exempt status of blatantly political liberal groups MSNBC and Chris Matthews would be screaming just like the clowns at Fox “NEWS”. When your arch enemies would be doing what you are doing now that’s should bother you. the motivation is clearly personal bias driving political leaning.

    Now let’s revisit Watergate for some perspective. A felony on Presidential order was committed. millions in hush money was paid to cover the crime. Evidence proving these crimes was destroyed brazenly. The special prosecutor appointed to investigate was fired and his files seized in the middle of the night on Presidential order. Said President then tells everyone calling himself a judge that he doesn’t have to obey any damn judges or laws, that he is the Dictator in Chief. Yet today some know nothing dingbats still call Obama or Bush “the worst POTUS in history”.

  21. dow says:

    Meanwhile, no mention of the conservative right’s 2012 “Pulpit Freedom Sunday” sponsored by the Alliance Defending Freedom that openly endorsed candidates from the pulpit (which is very much illegal). The specific intent was to attack and goad the IRS to react.

    This whole IRS “scandal” smacks of something far more sinister – an attempt to stop collecting taxes altogether.

  22. Angryman1 says:

    They were scared the donors were going to be outed. It all goes back to Israel as the handler and connected to the Rockefeller Foundation as the main financier. They just pretty much made sure the Obama administration covers up the donors for good.

    Trying to stop tax collection may be a part of it, but the real fear was on the amount of capital into the political organizations could be outed. Notice the groups were “grassroots” ground game type of political organizing. The type of groups that the IRS probably got caught behind in paperwork and signals get crossed. Yet, the main “organizations” of these groups were never targeted at all.

    Money flew into “bourgeois” conservative groups like crazy in 2010-12 from investment brokerages and political organizations like crazy. They itself is the “tyranny”.

  23. Expat says:

    I’m not threatened by one news channel. Fox is merely to most vocal, lunatic face of American “conservatism”. I am not left wing either. But I don’t see the same kind of insanity on the left as I see on the right. Democrats and liberals have mostly gotten past the sixties and seventies and moved on to adult conversation and serious agenda while the Right is stuck in the Bible and Soviet fear-mongering.

    If Fox and you believe that Obama is left-wing, then you need anti-psychotics. I ask you to point out one Obama policy which is left of Bush or Nixon. And if you point to Obama-Care, I will bet you $100 that if Obama care is at risk of being overturned, you will see the Big Pharma, the AMA, and the entire healthcare industry rally Washington to save it in a manner that would make AIPAC look like a PTA fund-raiser and campaign.

    If I were a Republican, I would be thrilled to have Obama in the White House. If I were a Democrat, I would not feel that way. As it stands, I am neither and frankly would like to ship every elected official in the US to Gitmo for re-education.

  24. Seems like the IRS should just undo their decision from 1959. It’s very difficult to decide what speech is political and what isn’t, and I think the court system has bigger issues to adjudicate than whether or not a given outfit is/isn’t qualified for 401(c)(4) status. The Congressional language is unequivocal. Let them all pay taxes and be done with it.

    BTW, given that half of America hasn’t a clue what its Constitutional rights are or why people might want to keep them, I think the Tea Party does have an educational as well as political mission. And, on the flip side, I think the ACLU has the same sort of dual mission. And Planned Parenthood. And many 401(c)(3)s.

    Perhaps we should revoke all tax exemptions for nonprofit organizations, keep the system simple and fair, and then find better ways to incentivize contributions to all nonprofit groups regardless of character?

    • DeDude says:

      The simple solution would be to revert to the language of the law. Political groups would still be able to operate as tax-exempt, but they would have to reveal the names of their large donors. Looking at the letter of the law, the IRS have no right to allow any political group coverage under 501 (c) (4). I hope someone will challenge the IRS interpretation of the law in court.