Spin relies on confusion, and both seem to be prevalent in the ongoing saga over an IRS targeting campaign that singled out certain types of groups for special scrutiny after they applied for tax-exempt status.
The most important questions in the IRS controversy are: Who started the filtering policy, what were the motivations, and how do we prevent it from happening again? Let’s examine some of the most common misconceptions that could distract from those issues.
A flood of applications prompted the targeting
IRS officials have suggested that the targeting campaign, which began sometime before mid-2010, started as a policy to deal with an overwhelming increase in tax-exemption applications. This is an unsubstantiated claim that Democrats have replicated to defend the tax agency’s actions.
“What if, a few years ago, there was an increase of communists in this country, a new communist club wanted to be tax exempt?” Rep. Jim McDermott (D-Wash.) asked during a congressional hearing on Tuesday. “Wouldn’t you want to be sure that the self-declared tax-free classification of those groups was correct?”
An inspector general’s report on the controversy shows that 501(c)(4) applications — the kind that were targeted — actually declined during 2010. That’s according the numbers the IRS provided during the audit. (See page 3 of the report.)
The data shows that no increase occurred until 2011, well after the targeting campaign began.
Post Fact Checker columnist Glenn Kessler wrote about this issue last month while examining a similar claim by Lois Lerner, the IRS tax-exemption official who was recently placed on administrative leave.
An IRS spokeswoman told Kessler that the numbers in the report represented calendar-year instead of fiscal-year figures. But she also could not provide the actual calendar-year data, meaning the agency has not shown that an increase occurred before the targeting started.
The IRS will be “in charge of your healthcare”
Republicans have argued that the IRS scandal helps justify their calls to repeal President Obama’s healthcare law. The idea is that the agency cannot be trusted to handle its Obamacare responsibilities, which include enforcing the insurance mandate and administering credits for individuals who cannot afford coverage.
This vein of criticism has shown up in several forms and with varying degrees of accuracy.
The National Republican Campaign Committee launched an ad campaign that said Obamacare will put the IRS “in charge of your healthcare,” a claim that earned the group Two Pinocchios from the Fact Checker.
Rep. Michele Bachmann (R-Minn.) went so far as to argue that Obamacare would give the IRS the “most personal, sensitive, intimate, private health-care information.” Kessler noted there is no evidence to support that notion, awarding the claim Four Pinocchios.
Senate Minority Leader Mitch McConnell expressed a more accurate and diplomatic view, saying in an interview with the Federal Eye: “The role of the IRS will be significant. I don’t want to overstate it, but they are the enforcer.”
McConnell still said he wants to repeal Obamacare, saying the issue “has an overwhelming likelihood of being the most important issue of fall of 2014 campaign.”
The search criteria captured more than just tea party groups
Democrats and IRS officials have made this point several times during recent congressional hearings.
The IRS at one point issued a statement saying the public should “understand that the group of centralized cases included organizations of all political views.” The agency’s former commissioner, Steven Miller, later pointed out that only 70 of the 300 groups in question claimed tea party affiliation.
These assertions are true but misleading, as they suggest the IRS’ search criteria were neutral. The problem is that none of the filtering terms were expressly aimed at singling out politically active progressive or liberal groups.
The criteria included phrases such as “tea party,” “patriot,” and “9/12,” an organization connected with conservative commentator Glenn Beck. All of those terms are primarily associated with right-leaning groups.
The inspector general’s report makes no mention of the IRS using similar criteria that would apply mainly to progressive entities.
Had the filtering policy been neutral, as some have suggested, the IRS never would have apologized for it, and the inspector general wouldn’t have concluded that it was inappropriate.
The Bush administration targeted left-leaning groups
Several readers have made this point to the Federal Eye, echoing comments that Democrats made during recent congressional hearings.
Here’s what Rep. John Lewis (D-Ga.) said Tuesday, when a half-dozen of the targeted conservative groups testified before the House Ways and Means committee:
“Between 2004 and 2006, many liberal groups, including the NAACP, a progressive church and an environmental group, were targeted by the Bush administration. Where was the outrage then? Where was this sense of righteous indignation?”
All the groups Lewis mentioned were already tax-exempt before the IRS subjected them to audits. Furthermore, those investigations were based on allegations that the organizations had violated tax-exemption rules — they were eventually cleared of wrongdoing.
In the recent targeting case, none of the conservative organizations held tax-exempt status, and they were singled out merely because of their names during the application-review process.
While some readers may question the Bush administration’s judgment and motivations in applying extra scrutiny to left-leaning groups, their cases were not quite comparable to those in the recent IRS scandal.
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