Politics & Policy

The IRS Is the Problem

There are two competing models for reforming the Internal Revenue Service’s oversight of the political activities of certain nonprofit organizations: one put forward by the IRS itself, in the form of a regulatory rule change, a second put forward by Representative David Camp (R., Mich.) on behalf of the House Ways and Means Committee. Neither program is sufficient, because neither reflects the reality behind the recent IRS scandal, which was not the result of murky rules or bureaucratic incompetence but rather of what gives every indication of being deliberate misuse of federal investigatory resources for partisan political ends. That there have not been criminal charges in this matter is probably at least as much a reflection of the highly politicized Department of Justice under Eric Holder as it is of the facts of the case. The problem, then, is that both the IRS plan and the Camp plan assume that the IRS ought to be regulating rather than being regulated.

The United States already has a rather good regulation regarding government oversight of political speech, which is that there isn’t to be any. The First Amendment ought to be the last word on the subject. Asking politicians to oversee the activities of persons inclined to criticize them presents a basic fox-henhouse problem — recall that the Citizens United decision came in response to federal attempts to outlaw the showing of a film critical of Hillary Clinton — so our general bias should be against entrusting any federal agency with such powers. In the case of the IRS, the specific case amplifies the general principle: The agency has no competence in the matter of regulating political speech, and no statutory authority to define away the right of 501c(4) groups to engage in political activities, something to which they are explicitly entitled under the law. Congress has the authority to rewrite the rules about who qualifies as a tax-exempt nonprofit, should it choose to do so, but the IRS plainly does not have the power to regulate away political speech where it is explicitly authorized.

The IRS has willfully and intentionally misled Congress and the American people about the scope and nature of its actions targeting political opponents of the Obama administration and congressional Democrats. Former administrator Lois Lerner in particular undeniably lied to Congress after staging a “spontaneous” disclosure of IRS misdeeds with the assistance of a longtime tax lobbyist. Holly Paz, who ludicrously attempted to convince investigators that the IRS’s flagging of the words “tea party” was simply a brand-name for political activity — like using “Kleenex” for “tissue,” she said — has just been promoted to the position of special assistant to the director of the IRS, with a “technical guidance” portfolio.

No rule change from the IRS — nor Representative Camp’s well-intentioned but wholly inadequate reforms, which amount to a list of minor no-nos such as inquiring about an audit target’s political or religious beliefs — is going to change the fact that the agency is full of highly partisan bureaucrats with a political agenda of their own and an inclination to abuse such police powers as are entrusted to them.

This need not be the case. Current law grants nonprofit status to social-welfare organizations, an umbrella term that includes organizations that seek to educate the public about political issues and to sway public opinion on those issues. For good reason, the law does not specify allowable content for those educational efforts — it is not up to the government to tell the citizens whether their political views are worthwhile or appropriate. The current law allows a great deal of room for political activity short of running for office. The question should not be whether nonprofit organizations are trying to have an effect on popular opinion — including, inevitably, opinion about which policies and candidates are worthwhile — but whether they remain social-welfare organizations. Short of becoming de facto adjuncts of political campaigns, a charge for which there should be some evidence and the investigation of which properly belongs with the Federal Election Commission, not the IRS, nonprofits’ public advocacy should be received liberally.

Representative Camp’s thou-shalt-not list is fine so far as it goes, and, unlike the IRS bureaucracy, Congress does have the authority to rewrite the law. But his proposal falls short in that it assumes that the IRS is a proper and desirable regulator of political speech. It is not. It is not even particularly admirable in its execution of its legitimate mission, the collection of revenue: Its employees have committed felonies in releasing the confidential tax information of such political enemies as the National Organization for Marriage and Mitt Romney, and the agency itself has perversely interpreted federal privacy rules as protecting the criminal leakers at the IRS rather than the victims of their crimes. The Camp bill, thankfully, would address at least that much, but it would still leave the IRS in charge of determining whether its employees were playing politics with audits and decisions. The IRS does not inspire confidence as a practitioner of self-regulation, much less as a regulator of political speech.

The Editors comprise the senior editorial staff of the National Review magazine and website.

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