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The IRS got a bum rap for its investigations


May 20, 2013

The IRS tempest in a teapot should not be about how the IRS investigates political organizations that file for 501(c)4 tax-exempt status. Rather, it should be about why we have thousands, or, for that matter, any, tax-exempt political non-profits in the first place.

This tax-exempt status, especially the 501(c)4 organizations, rather than the usual 501(c)3 nonprofits, is rightly subjected to more than the usual IRS scrutiny because these are the organizations most likely to misuse their status. They are not required to make their contributor lists public, and the lack of disclosure has led to a fairly massive illegal use of this so-called “dark money” for political advertising and other campaign purposes. These organizations rightly have the burden of a higher standard. That is what the IRS agents in Cincinnati were investigating.

The agents decided to expedite the process by inserting key words to try to ferret out possible misuses. There were several kinds of organizations t...

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