Tea Party Whining Backfires as All Political Groups Could Lose Tax Exempt Status

By: Sarah Jones/politicususa

More lawmakers are beginning to call out the fact that social welfare groups should not be subsidized by the American taxpayers if they are violating the law with political activity.

Earl Blumenauer (D-OR) excoriated Republicans for failing to understand the basic language of the laws governing 501(c) 4s. He explained that the statue says they shouldn’t have any political activity, and so the real scandal is why aren’t Republicans even bringing the statute up in their hearings and why isn’t the IRS following the law.

Appearing Tuesday night on the Last Word, Blumenauer said, “They shouldn’t be shielded from public disclosure by the 501(c)4 status where they get millions of dollars and not required to disclose…. They shouldn’t disguise political action behind the guise of social welfare. It is not healthy, it’s not right, it’s not legal, we should stop it.”

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Transcript from MSNBC with slight modifications:

Lawrence O’Donnell: How lonely is it there when you have a hearing about abuse of law in the Ways and Means Committee and you cannot get republicans of the committee to actually read the very simple language of the 501(c) 4 law?

Earl Blumenauer: Well, it’s frustrating. Obviously there were some problems in inappropriate targeting. If it looks like there were confidential tax returns leaked, by all means, go after it, get to the bottom of it, we had the inspector general’s report, nothing is willful or criminal. There have been some mistakes made.

But as you’ve been getting to the underlying problem is that we shouldn’t have bureaucrats trying to evaluate how much social welfare versus how much political action they’re involved with. The statute says they shouldn’t have any. That Eisenhower era reinterpretation that allowed some permissible political activity was wrong, it is contrary to the statute, congress should fix it. If they want to play politics, they ought to organize a political effort.

They shouldn’t be shielded from public disclosure by the 501(c)4 status where they get millions of dollars and not required to disclose and they’re definitely principally organized like the National Organization for Marriage was organized to assault efforts in California for marriage equality. It is blatantly political and we shouldn’t pretend otherwise. We should stop it.

Lawrence O’Donnell: Congressman, has Janice Mays and those on the Ways and Means figured out how the IRS changed that word exclusively to the word primarily and why then the IRS relied on the word they made up instead of the word congress wrote?

Earl Blumenauer: Yeah, I am not familiar with anybody teasing out the history on that. It would be interesting. But actually I think a sideshow. The point is it is inappropriate, contrary to statute, and leads us down this never neverland path, and I don’t care if it is an organization on the right or the left, they shouldn’t disguise political action behind the guise of social welfare. It is not healthy, it’s not right, it’s not legal, we should stop it.

End transcript.

Republicans paraded Tea Partiers in front of the cameras Tuesday to decry the “jackboot” of tyranny descending upon them via the IRS, never realizing that they are all in violation of the law. Tea Partiers put on an embarrassing display of ignorance combined with a staggering sense of entitlement with the following hyperbolic claims:

“This is about tyranny on the field of our founding documents.”
“I feel our country turned a corner into tyranny.”
“I am not here as a vessel, I am not begging the lords for mercy.”

Republicans made a huge miscalculation in bringing national attention to the blatant abuse of the statute by some social welfare groups. The law is very clear: The group must be engaged exclusively in social welfare.

Lawrence O’Donnell was pleased to report that more lawmakers are now talking about that scandal — the real scandal of the IRS, which is that the law is not being upheld in regards to social welfare groups. In the hearings Monday, the IRS auditors explained that one of the troubling things they found was a failure to review groups that were intervening in politicalcampaigns.

Echoing Rep. Jim McDermott (D-WA), who asked during Tuesday’s hearing why Tea Party groups were expecting the taxpayer to subsidize their political activity, Lloyd Doggett (D-TX) decried the expectation that taxpayers should fund political activity, “I don’t believe the Internal Revenue Service, the Treasury Department, should be providing tax subsidies to organizations that are not engaged exclusively in social welfare. This congress was very clear on that point. Clear on it in 1913. And in repeated recodifications of 501(c)4. it says they must be operated exclusively for the promotion of social welfare.”

Not a single Tea Party group was silenced by the IRS. They have been able to operate subsidized by the American taxpayer even though they are in violation of the statute. No group from either side should be allowed to violate the law, and the IRS needs to get clear on what the statute actually says.

Political organizations fall under section 527 of the federal tax code, and should not be subsidized by the American taxpayer. The interpretation was changed in the regulation of the law by the IRS, not in the actual statute. One of the recommendations of the IRS audit was to make sure that political activity does not constitute the primary activity of these organizations. Given the recommendations to review more groups and the President’s directives to the IRS to enact all recommendations of the audit, “social welfare” groups engaging in political activity should expect more scrutiny.

Whether or not the IRS will actually enforce the entire statute is another story. You’d think that “law and order” Republicans who want less government interference would not want the IRS forced to determine how much is too much, but this is the modern day Republican Party, and they’ve proven less than interested in following the law and actual small government. However, as more lawmakers demand that the actual law be upheld, the spotlight has turned onto social welfare groups expecting subsidies for their political work.

Hey Tea Party, it’s not “tyranny” when we expect you to follow the law, and it’s not “tyranny” just because we don’t want to fund your dark money political activity. This may be an unintended consequence of loud, ignorant hubris.