The answer is six, not to give away the ending. Rep. Jim McDermott (D-Wash.) attacked victims of IRS targeting at a House Ways and Means Committee hearing today, saying that it was their fault they were targeted because they applied for tax-exempt status.
In a five-minute span, these are the things McDermott got wrong.
(1) “None of your organizations were kept from organizing, or silenced.”
Technically, sure. But failing to make these groups 501(c)(3)s or 501(c)(4)s infringed on their First Amendment rights. Had these groups been treated fairly, their donor lists would not be public. Because they were not granted tax-exempt status, however, many witnesses testified that their donors were fearful of giving.
Kevin Kookogey, president of Linchpins for Liberty, which educates high school and college students about the Constitution, lost a $30,000 grant because he wasn’t granted tax-exempt status. “Because I did not get status, everything effectively stopped,” he said. If that isn’t being silenced, what is?
(2) “We’re talking about whether or not the American taxpayers will subsidize your work” (and) “With your applications, you are asking the American public to pay for that work.”
The idea that these groups would be subsidized by taxpayers is completely false. Being given tax-exempt status and being subsidized are two very different things. 501(c) groups are tax-exempt, meaning they do not have to pay at least some federal taxes. They are not subsidized, which would mean their activities are at least partially funded by taxpayer money.
One of the witnesses, Dianne Belsom of Laurens County Tea Party from South Carolina, emphasized that. “This is a real outrage to imply that we’re taking money from starving children to fund our groups,” she said.
(3) “If you didn’t come in and ask for this tax break, you never would have had a question asked of you.”
This one is a little harder to prove wrong, but there are plenty of groups and people that seem to have been targeted without submitting new applications for 501(c) status.
Frank Vandersloot, a billionaire businessman, had to pay $80,000 in legal fees to defend himself from an IRS audit, as well as a Labor Department audit on his cattle ranch, after donating to a super PAC that supported Romney in the 2012 election. Donors to Freedom’s Watch, a now-defunct 501(c)(4) group, were subject to the gift tax on their donations, even though the IRS hadn’t tried to impose the gift tax in this way for at least 20 years.
These are just two of many examples of conservatives being targeted for their beliefs not for applying for tax-exempt status, but for donating to causes and candidates opposed to the administration.
(4) “I get the feeling that many of you, and my Republican colleagues, just don’t believe that you should be free from any political targeting, but that you should be free from scrutiny at all.”
McDermott may have gotten that feeling, but he had absolutely nothing to back it up. Neither the witnesses nor the Republicans on the Ways and Means Committee ever said they shouldn’t have been subject to examination. They just shouldn’t have been subject to unfair and invasive examination while their liberal counterparts were given automatic green lights.
(5) “If there was an organization promoting taxpayer funding for abortions, wouldn’t you want to know what they were using that political money for or what candidates they were backing?”
As a matter of fact, there is a 501(c)(3) that doing exactly what McDermott said. It’s called Planned Parenthood. Planned Parenthood is a tax-exempt organization that gets taxpayer funding and provides abortions. True, abortions aren’t directly subsidized, but it does free up other funds to be used for them. Unlike Planned Parenthood, the groups represented at the hearing have no prospect of recieving federal funding (see #2). It’s hard to see how Planned Parenthood should be given 501(c)(3) status without a problem, but groups like Coalition for Life of Iowa have to have their First Amendment rights restricted.
(6) “Now, you just ask yourselves which is more likely, that midlevel employees overwhelmed by four times as many applications as before made stupid, irresponsible shortcuts or that theres an administration-wide plot to take down community organizers.”
I thought this myth was disproved weeks ago, but it keeps coming back to haunt us. The targeting has been tied to Washington—specifically Lois Lerner—time and again, yet people keep trying to blame a few rogue Cincinnati employees. On Sunday, the House Oversight and Reform Committee released transcripts from some of those employees that should have completely destroyed that excuse for good.
It is true that applications for 501(c)(4) status did go up in volume, but not until 2011, and they didn’t really explode until 2012. The targeting began long before the number of applications went up.
The data doesn’t lie:
Number of Applications for I.R.C §§ 501(c)(3)–(6) Tax-Exempt Status Received by the IRS Fiscal Year
501(c)(3) 501(c)(4) 501(c)(5) 501(c)(6) Total (by year) 2009 65,179 1,751 543 1,828 69,301 2010 59,486 1,735 290 1,637 63,148 2011 58,712 2,265 409 1,836 63,222 2012 66,543 3,357 1,081 2,338 73,319
Note: Fiscal year data runs from Oct. 1 to Sept. 30 of any given year.
Courtesy of House Ways and Means Committee.
It might behoove McDermott to read his committee’s own website every once in a while.
For an added bonus, here’s one last McDermott quote. This one isn’t really a misleading statement, but it is pretty absurd:
“What if, in the midst of a few years ago, there was an increase in communist groups in the country and new communist clubs wanted to be exempt. Wouldn’t you want to be sure that the self-declared tax-free classification of those groups was correct?”
So, apparently, Tea Partiers are analogous to communists now. Way to keep it classy, Jim.