After more than 50 years of filing my Federal income tax and having been audited a number of times, I still have far more faith in the IRS to do the right thing, than I do our present Congress.
Several years ago I got a letter from our friendly IRS stating I owed more taxes and had to pay a penalty. I wrote back that I agreed with their findings that I owed more in taxes, but that I thought the penalty was unfair, because the Certified tax preparer messed up, not I. Later I received a letter from the IRS saying they agreed; I should just pay the taxes owed. The IRS is made up of hard-working Government employees trying to do a job. Our Congress has not made their job easy.
How do you police a vague law that gives a tax exemption to so-called charitable organizations, as long as that organization spends most of its resources and energy promoting the common good, social welfare, etc. What precisely is the common good? We can have a myriad of arguments over trying to answer this question, but Congress left it up to the IRS to figure it out.
Shall we argue forming a political party is in the common good? Is it being nonpartisan to run issue ads that are identified with one–and only one–political party? Why wouldn’t “Tea Party” in the title be a red flag to signal more scrutiny? My answer would be, it is a bad idea. You would spend all your time checking on small, insignificant organizations, while letting an organization like Crossroads GPS, which spends multi-millions, off the hook. Perhaps these IRS workers thought they were being efficient, but they weren’t. Had there been efficient managers, they would have been instructed to scrutinize organizations in the order in which they haul in the money–starting with the big bucks.
Since there is no positive definition of “social welfare/common good,” then use negative definitions. An organization that uses its resources to deceive, to outright lie, is hurting the common good and should be denied tax-free status. This would eliminate a ton of tax code abuse!
However, I understand why the IRS might be reluctant to take such a position. Especially when you consider the IRS has to answer to our Congress, and everyone knows that our Congressmen never lie, never distort the truth! Oh! Those doctored Whitehouse e-mails the Republicans put out, that calls for a Congressional investigation.
When? After the apology, of course.