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Old 05-15-2013, 11:15 AM   #112
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The Economist take. (highlights)

The IRS errs
May 13th 2013, 20:02 by E.M. | WASHINGTON, DC


Quote:
WHAT bigger gaffe could the Internal Revenue Service commit than to single out groups that criticised the government for greater scrutiny? Republicans, naturally enough, are outraged by the revelation that America’s taxmen consciously and explicitly did so, picking on the applications for charitable status from tea-party chapters and other right-leaning campaign outfits.
Quote:
Happily, the Obama administration does not seem to have been involved in this idiocy at all, although with its usual defensiveness, it took some time to condemn it strongly.
Quote:
In all the huffing and puffing, however, two bigger scandals are being ignored. The first is the frequent abuse of America’s system of regulation of political campaigns, which the IRS, for all its incompetence, was rightly seeking to investigate.
Quote:
The applications the IRS handled so ill-advisedly were for a particular tax status—501(c)(4), in the jargon—that has become a common means to avoid these restrictions..........Clever lawyers spotted a loophole in all this: a group that had no discernible purpose other than promoting a particular political viewpoint could still register as a 501(c)(4), as long as it was careful to spend at least half its money on campaigns that were not explicitly tied to an election.
Quote:
The fact that the IRS has not found a way to stop this kind of thing is an indicator of the second scandal: the willful neglect of the taxman by politicians from both parties. The agency has 10% fewer employees than it did three years ago. Its budget has been cut three years running. It has not had a director since November. Starving the IRS is popular with voters of all stripes, but it leads to diminished revenues and thus extra debt for all Americans to bear. If those complaining about the agency’s conduct want better results, they will have to pay for them.
(comments about 501(c)(4) including one supporting Obama here.)
http://www.economist.com/blogs/democ...cans-and-taxes
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