May 16, 2013

The Real IRS Scandal—AstroTurf Schemes Using 501(c)(4) Foul-up

Astroturf front, Americans for Prosperity
Clare Kim and Lawrence O'Donnell have the story on what's up with the IRS.

And it's not persecuted Tea Baggers.

It's the AstroTurf schemes using 501(c)(4) status resulting from a 1959 screw-up that lets the Koch brothers and Karl Rove funnel money ripping off taxpayers.

From The Last Word:

Internal Revenue Service agents have been struggling to do their jobs–which have been made essentially impossible by an incorrect interpretation of the law that the IRS made in 1959. It was then that the IRS changed the language of the law without any authority to do so. Here is how the tax law was written in its latest update in 1954 on 501(c)(4) social welfare organizations. The 501(c)(4) designation was to apply only to: “Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare.”

But a 1959 interpretation guideline written by the IRS says that: ”To be operated exclusively to promote social welfare, an organization must operate primarily to further the common good and general welfare…”

With absolutely no legal oversight, the IRS changed the world “exclusively” to mean “primarily” and then the IRS never defined what it meant by primarily. MSNBC’s Lawrence O’Donnell explains that the tax code must be enforced with the word “exclusively” so that no political organizations would ever be able to get 501(c)(4) status. “No Tea Party organizations, no Democratic party organizations, no Republican party organizations, no Libertarian party organizations, no party organizations of any kind should ever get 501(c)(4) status and that is exactly what the law already says,” O’Donnell said Wednesday night.
On a related note, see Hey, Mitch McConnell. Let me see if I got this right: "When the IRS hassles Tea Party groups, it's wrong. When they hassle the NAACP and environmental groups, it's OK."

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