IRS Scandal?

When the news broke that the IRS was scrutinizing the activities of Tea Party-related activist groups, it was understandable that most people, liberals included, saw this as an abuse of power — the executive branch using tools at its disposal to “crush” or weaken the minority.

When you take a moment to dig just a little deeper, beyond the headline, it’s clear that the only IRS scandal that exists is the IRS itself!

For a couple years I had the privilege of heading a 501(c)3 non profit organization. To be honest, the entire time I was president of the club, I never realized what exactly 501(c)3 meant, beyond our non-profit, tax exempt status. 501(c)3 represents a section of the U.S. tax code. I’d be shocked if anyone has actually read the entire tax code given that when I went to print it out tonight my computer told me I didn’t have enough paper to print all 4,964 pages!

The IRS got in trouble for doing what they are supposed to be doing – investigating the doings of organizations claiming tax exempt status under section 501(c)4 of the tax code. Unlike 501(c)3’s, 501(c)4’s can engage in political elections, but the primary function of the 501(c)4 cannot be support to political movements. The section in the code stipulates:

501(c)(4) organizations may inform the public on controversial subjects and attempt to influence legislation relevant to its program and, unlike 501(c)(3) organizations, they may also participate in political campaigns and elections, as long as its primary activity is the promotion of social welfare. The tax exemption for 501(c)(4) organizations applies to most of their operations, but contributions may be subject to gift tax, and income spent on political activities – generally the advocacy of a particular candidate in an election – is taxable. 501(c)(4) organizations are not permitted direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office.

Wink, wink – even the “aggrieved” parties know they were breaking the rules.

The real scandal is the tax code itself.

The tax code is NOT designed to raise revenues pertinent to running the government of the United States – it is written solely for the purpose of engineering social behavior and providing largesse to individuals or corporations. That we’ve allowed this to continue unabated is a testament to the power of tax credits and exemptions – after all, none of us want to lose our mortgage deductions, or exemptions for family members,

The only way to resolve the graft and corruption caused by congress and the IRS is to abolish the system altogether. Instituting a flat tax, progressive or otherwise, is the means to stop the heavy handedness of a corrupt government. Left unabated, unchecked, our government with each passing day is less accountable to its citizens and more beholden to corporate donors and those that serve their needs – or reelection accounts.

I wrote about a change in the tax code a couple years ago and remain convinced that such a model is the only way to proceed…

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One Response to IRS Scandal?

  1. Janna says:

    Exception as always Sean and I absolutely agree!

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