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irs3Okay, get your outrage ready followed by your thinking caps. It, to pare a Bette Davis phrase, “is going to be a bumpy ride.”

Let’s get rid of the outrage first.

  1. It’s bad to target identifiable public groups of people for special scrutiny unless they are promoting pedophilia or making Adolph Hitler’s birthday a national holiday.
  2. A man as smart as President Obama is, is surely very good at getting elected and surely very bad at managing his Administration–at least he has a lot of really incompetent people working for him that aren’t doing him any favors.
  3. Anything that gives Tea Potters the ability to dance in the street in glee is just wrong on so many levels–mostly because they dress like idiots who missed the bus to the Super Bowl tailgate party.
  4. Fourth, Jon Stewart already said it better than you could anyway with this:

“Well, congratulations, President Barack Obama, Conspiracy theorists who generally can survive in anaerobic environments have just had an algae bloom dropped on their fucking heads, thus removing the last arrow in your pro-governance quiver: skepticism about your opponents.”

TeaPotters should of course get somebody to explain to them what he said meant.

Okay, outrage over.


Now, let’s examine the facts, which are still fairly small in number, which allows me the joyous whimsy of speculating all over the place about both what might have happened and why. Given that I’m reputed worldwide to be a fairly decent prognosticator (if you don’t count the times I was wrong), I’m sure you will find my analysis spot on as they say or don’t say. You choose. (We are not getting into the DOJ “new” scandal today, so relax, you won’t go into brain overheating).

Okay, let’s begin.

This goes back, in my humble opinion, and with a tiny bit of help from the ever bubbly Contrarian, to *drum roll* Citizens United. That amazingly short-sighted, ill-thought-out, and all around stupid decision opened the floodgates as you no doubt recall to all kinds of bad things. Corporations could give unlimited amounts of money to elect those persons who would support their cause that the only good dollar is one in the pocket of a rich person, for only they know what to do with it.

Okay, okay, so it also allowed all sorts of other “groups” to also gather and spend tons of dough to influence the minds of mostly mind-numbingly stupid voters.

With me so far?

So a lot, and I do mean a lot, of folks figured out that they wanted to get in on the action.

In the world of the IRS is a thing called a 501 (c) 4. This is a tax-exempt status, not quite as pure as a 501 (c)3 status. It allows you to collect money and not pay taxes on it, but the donor can’t claim it as a tax-exempt donation. The status is reserved for groups who operate “for the promotion of the public welfare.”


See the truck? See the truck drive through the gigantic hole in the wall?

What the hell is public welfare?

Well, I knew you would ask that.

The ACLU is considered to do so. But so is the NRA.

See the more rigorous status, the 501 (c) 3 status requires that you stay the hell out of politics in any way shape or form. The 501 (c) 4 status is a bit more lenient. It allows one to lobby for legislation and also to engage in political activities as “long as their primary activity is the promotion of social welfare.” The mack truck as you can see is still driving right on through.

So a whole bunch of organizations pop up, all claiming they are for the public welfare, when in reality they are really about promoting candidates and issues. Enter the TeaPotters and various other right-wing groups.  To be fair, and we aim for fair,  there are (although to lesser number) plenty of left-wing organizations who also are trying to do the same thing.

Now Cincinnati is the office that apparently is the hub of the IRS operation to approve or deny applications for this status. One can assume that following Citizens United in 2010, there was a general flood of applications as everybody including grandma wanted to get in on the action. (I’m told something like 60,000 would not be far off the mark) The status is valuable since, some of the money is tax exempt which allows more of it be used as the organization desires, whether it be to “public welfare” or quite frankly in some case to allow for bigger salaries to those who run the things. Hint: you can make a good living by setting up and running one.  Also donor lists are not required to be publicized.

What to do with this flood of applications which may well have driven the wait time up many additional months?

I figure that some mid-level bureaucrats, who were told in no uncertain terms to clear the backlog, and “no you were not getting any more workers” because the GOP just says NO!, dreamed up this computer program to sort through applications and flag those that would in all cases require further scrutiny–i.e., were they actually doing “public welfare” or only a front for a political agenda. (It’s fairly hard to argue that any Tea party group or any Occupy Wall street group could be anything but political.) The program used words like tea party, phrases like government not working, taxes, and so forth.

As I understand it, of the numbers of kicked out applications (requiring further scrutiny and action) 25% involved right-wing organizations. The rest involved either left-wing or other groups who did not meet the criteria, being not fraternal organizations of chickadee lovers, chocolate addicts anonymous, or things of similar ilk.

At some point, higher-ups learned of the practice. Discussions were had, and all seemed convinced that it was not aimed at “enemies” so much, as to simply weed out by computer rather than by hand, those applications that would require more time. The normal applications could thus be passed through within a reasonable time.

Of course, it became known up the chain of command what was going on. But apparently this raised no red flag (as it should have) as it was discussed and explained to them.

This is born out by the fact that during this entire episode, one Doug Shulman was head of the IRS. Now Mr. Shulman was appointed and began his leadership of the IRS in March of 2008, having been appointed by George W. Bush. He completed his term in November of 2012. He testified that there was no such thing going on in the IRS, as late as March of 2012. While it is still unknown whether he was aware of the practice, it is now thought that he probably did.

This suggests to me, that he did not consider it aimed at suppressing right-wing groups so much as helping to alleviate the backlog and limited to pulling out those applications that would otherwise require additional scrutiny anyway. It appears that the agency’s interests had turned to increasing revenue since the early 2000’s, and it was felt that as much as 1.2 billions were being lost to tax exempt groups in the 2012 election alone. Clearly some of this, if not most of it, should not be tax exempt under the current laws.

Shulman is and has never been a politico. His entire career has been spent in the business arena. That suggests that while his political affiliation is unknown,  he probably supports business interests and it seems unlikely to me that he would deliberately turn a blind eye to some deliberate effort to damage conservative groups, which typically favor business interests. Thus we can take him at this word I think that there was not attempt to “target” conservative groups per se.

This suggests that the real problem here is not one of an “enemies list” so much as what you get when you try so hard to depoliticize an organization that none within it have the political nose to see a HUGE problem for what was probably created as a benign process to speed up the process for legitimate applications while leaving more problematical ones for later.

In other words, any political junkie would have seen this immediately as “DANGER, DANGER WILL ROBINSON!”,  but they were not so seen by your average apolitical bureaucrat.

So that’s my initial take on it.


Of course weigh in.