Michael Hiltzik at the LA Times has written what I think is the definitive piece on the IRS problems — making the case that the real scandal in all of this is that the IRS isn’t functional enough to have stopped the bastardizing of the C(4) organizations in the first place. As usual, you have to go read the whole thing:
Here are the genuine scandals in this affair: Political organizations are being allowed to masquerade as charities to avoid taxes and keep their donors secret, and the IRS has allowed them to do this for years.
The bottom line first: The IRS hasn’t done nearly enough over the years to rein in the subversion of the tax law by political groups claiming a tax exemption that is not legally permitted for campaign activity. Nor has it enforced rules requiring that donors to those groups pay gift tax on their donations.
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.
It’s about time the IRS subjected all of these outfits to scrutiny. The agency’s inaction has served the purposes of donors and political organizations on both sides of the aisle, and contributed to the explosive infection of the electoral process by big money from individuals and corporations.
Nor is Congress innocent. The lawmakers have dodged their responsibility to make the rules crystal clear. On the rare occasions when the IRS has tried gingerly to impose regulatory order, members of Congress have forced the agency to back off. There should be a rule in Washington that if you give regulators deliberately vague guidelines, you’re not allowed to protest when they try to figure out where the lines are.