A Good Time To Apply for c4 Status

An IRS scandal is a real gift for anti-government conservatives. The current source of scandal, involving the way in which political groups across the spectrum take advantage of a non-profit tax status, needs some massaging if it is to tap populist ire. It’s not really very salacious, when you get down to it. So what’s a scandal-hungry conservative to do? Embellish, redirect, make it about individuals and audits –– something that sends shivers up our spines. And that’s just what several conservative pundits have been trying to suggest (no evidence required).

What actually happened: From what we know at this point, it seems that a few agents gave special scrutiny to Tea Party-affiliated applications for 501c4 status. Using an ideological test to screen applicants is not appropriate, under any circumstances. Still, it is useful to put this into context.

Citizens United loosened restrictions on political advocacy, so that groups who engage in “express advocacy” of a candidate or who lobby to influence policy outcomes could more easily obtain c4 status. After the ruling, the IRS was soon flooded with applications. It is their job to determine if a group is eligible, to try and determine the balance of their activities – how much qualifies as social welfare and how much is more direct political activity. It looks like a few agents were over-zealous. Again, not appropriate. But then, perhaps neither is the loosening of restrictions on c4 status eligibility, but none of us really wants to go there, right?

If an independent,  non-scandal-minded observer looks closely into this, they might find that c4 status is more often than not a form of tax dodging (and groups across the spectrum take advantage of it). If indeed c4 status is supposed to go to more-or-less nonpartisan groups whose main purpose is to serve a public interest, with some politicking on the side, then many of the new applicants probably should not qualify. And for sure, many of the groups that already have c4 status do not really qualify. But now is not the time for the IRS to look into that! Incidentally, now would be a good time to send in that application.

The escalation: Conservatives need to tap into fear and loathing of the IRS, while attempting to dodge the questions about whether politically-oriented groups of any stripe should enjoy this favored tax status. The best way to do this is to allege that individuals are being audited because of their political beliefs. With no evidence whatsoever. Never mind that the part of the agency that reviews c4 applications does not audit individual returns; there is no coordination here. Claim it, repeat it, and that becomes the story. It is much meatier than a story about the outsized influence of well-funded political operations that can take advantage of c4 status to avoid taxes.

LIke I said, now is a good time to send in your c4 requests.