Campaign Legal Center Calls for Hearings on IRS Conduct in 501(c)(4) Controversy: Statement of J. Gerald Hebert
The more details that emerge about the conduct of the IRS in regard to applications by groups for 501(c)(4) status, the more clear it becomes that congressional hearings should be held. The IRS’ Exempt Organizations Division appears to have been overwhelmed by the rapid increase in 501(c)(4) applications in the last election cycle, and some of its employees were either poorly trained or improperly directed. Congressional hearings should be held expeditiously in order to determine what went wrong, and to hold those responsible accountable. The hearings must also examine the wholesale failure of that same Division to enforce the laws concerning political activity by existing 501(c)(4) organizations. If the initial reports are verified, it is breathtaking that the IRS seems to be harassing mom & pop tea party organizations while ignoring what appear to be blatant abuses of the 501(c)(4) tax status right under its nose by groups pumping tens of millions of dollars into partisan political advertising.
The IRS needs to enforce the laws on the books in a completely nonpartisan manner, but it must enforce the law rather than turning a blind eye to widespread abuses. This scandal must not be used as an excuse by the IRS to back away from enforcing existing restrictions on political activity by tax exempt 501(c)(4) groups. Congressional hearings must serve as a reminder to the IRS that maintaining a ‘see no evil, hear no evil, speak no evil’ stance on illegal political activity by tax-exempt groups is completely unacceptable.
Congress should consider where a new “bright line” standard is needed to provide clear guidance to both the IRS and tax exempt entities of permissible political activity by “social welfare” organizations, rather than relying on the current multi-part subjective test that has apparently led to widespread political abuse.