ANALYSIS - Forget about what you've been reading the last few days.
The prevailing narrative about Democratic-leaning tax investigators going after the Tea Party and other right-wing groups is not quite what's going on.
The real, more intricate story is that political groups have been trying to claim a special tax status that would allow their donor pool to be kept secret - a status that they shouldn't be entitled to.
The IRS's biggest sin is not that it went after these groups, but that it didn't do more, especially with the bigger political players. President Obama has been sucker-punched once again. LAT columnist Mike Hiltzik explains:
The organizations at issue are known as 501(c)4 groups (call them C4s for short) after the section of the tax code that applies to them. They're nonprofit "social welfare" organizations that by law must be devoted primarily to programs broadly serving their communities, not private groups.
IRS forms reveal what the agency considers to be mainstream C4s: religious groups; cultural, educational and veterans organizations, homeowners associations, volunteer fire departments.
In recent years, however, overtly political groups have been claiming C4 status, which allows them to keep their donor lists secret and to avoid paying taxes on certain income. Our lunatic campaign finance system is what turned the typical C4 from a volunteer fire department into a conduit of anonymous political cash.
Big donors were given the green light to spend freely on elections by the Supreme Court's 2010 Citizens United decision. That wasn't good enough for some; they wanted to distribute their largess secretly. (Read the rest … including another myth about who was targeted … here)
-cw
CityWatch
Vol 11 Issue 40
Pub: May 17, 2013