Originally published on Forbes.com.
Judicial Watch has come out with the latest in the perennial never ending IRS scandal. It has managed to pry loose from the Justice Department e-mails that show that Lois Lerner, who was imported into the IRS from the Federal Election Commission, met with the Justice Department to discuss whether people who had lied on their exemption applications about political activities should be prosecuted. The Justice Department is not releasing further documents which would explain why it did not prosecute anybody. As I’ve been following this drama, I’ve often found myself looking at it from a different angle than everybody else, which is what makes me think of this as a story about Lois Lerner walking into a bar.
The IRS is tasked with a pretty big job having to collect over $2 trillion dollars. Since Congress has decided to use Title 26( Internal Revenue Code) as its go to title to encourage or discourage this that and the other thing, the IRS gets diverted quite a bit from its core mission of collecting revenue. To work for the IRS as a revenue agent, the education requirement is a bachelors degree with 30 hours in accounting. So your core enforcement people in the IRS are accountants. Task twenty odd thousand accountants with collecting $2 trillion dollars and a bunch of miscellaneous stuff, some of the miscellaneous stuff is going to slide by. So it is understandable that they did not do such a hot job on squelching 501(c)(4) organizations that were engaging in political activity.
Then along comes Lois Lerner who is not a career IRS employee. She is excited about violations of the campaign financing laws and now can put numerous minions into zealously scrutinizing applications, thinking up more and more devious ways in which 501(c)(4) status can be abused. Not being a career IRS employee, she did not have IRS culture embedded in her.
Stephen Mopsick has been writing about how the IRS might recover from what he views as an ill advised reorganization in 1998. One of his observations on the IRS culture really struck me:
In my 30 years of IRS experience in both the National Office and the field, politics and religion were never talked about and were never part of the enforcement mentality.
And that’s the punch line, because one of the thing that my father always told me about how to behave in a bar was to never talk about religion or politics. Lois Lerner apparently could talk of nothing other than politics and that may be what is behind this mess. That’s why Lois Lerner walking into the IRS is like her walking into a bar. It was not good for Lois Lerner and it was not good for the bar.
The Latest On 501(c)(4) And Politics
At any rate, another thing I have observed is that the IRS despite Lois Lerner’s zeal has turned down remarkably few 501(c)(4) organizations and that none of the rejects ever squawk about it. There was a rejection this week – PLR 201449002. The IRS did a good job on redaction, so I have not come up with a clue as to what organization it is and whether its views are left, right or orthogonal. Any of my readers who figure it out will get kudos for me. The ruling has not attracted much notice at all and no outcry from the rejected organization. It’s as curious as the dog in the night that did nothing.
I’ve decided to call the organization in question “Get Out A Certain Kind Of Vote” (GOCKV). Here is what GOCKV is about:
Your Form 1024 attachment “Activities and Operational Information” provides that your exempt purpose is: to promote the public welfare by supporting M causes through (1) lobbying for, and coordinating efforts to support, legislation, initiatives, referenda, and (2) pursing reforms to N and increase electoral participation. You further provide that you are created primarily to coordinate the efforts of a number of affiliated organizations, which are other non-partisan, M -oriented non-profits (“Affiliates”). Your Affiliates are not your members but are affiliated with you in practice, by virtue of similar purposes and representation on your Board of Directors. For a $x1 donation an Affiliate is entitled to one seat on your board. For a $x2 donation an Affiliate is entitled to two seats on your board. You currently have x3 Affiliates that have committed to annual donations sufficient to entitle them to representation on your board. Most of these Affiliates are not recognized as exempt under § 501(a) as organizations described in § 501(c)(3) or § 501(c)(4).
What is M? Wouldn’t we love to know? Is M malevolent or munificent? Dollars to donuts, some people think the former and others the latter, while many, if not most, are indifferent. So lets call the cause – Morm. GOCKV and all its affiliates think Morm is a really good thing and want politicians elected who will support it.
A Really Slick Technique
Now encouraging people to vote can be considered a social welfare activity, so GOCKV has a really slick technique. I have never heard of it, but as it turns out it is not new. Affiliates turn their membership lists over to GOCKV. Their members are presumably mostly people who support Morm. GOCKV runs the membership lists against lists of registered voters and comes up with the members who are not registered to vote. The Affiliate can then go to those particular members and say “Hey. We know your really want to support Morm cause. One of the ways to support the cause is to vote for statesmen who see the wisdom of Morm and against wily evil politicians who oppose Morm. But you are not registered to vote. Here is how to do it.”
But Maybe Too Slick For 501
There are other things that GOCKV does – like endorse candidates on a non-partisan basis, of course – that also tend to disqualify it. All in GOCKV does not meet the definition of a “social welfare” organization.
Your voter registration drives will be focused on (1) geographic areas generally more supportive of M causes, and (2) unregistered voters on the membership lists of your Affiliates. You have described your Affiliates as “M- oriented.” Like the organization in Situation 2, which only urged voters to vote if they agreed with the position of a particular candidate on a certain issue, you will specifically target your voter registration efforts towards individuals that support M causes.
Since the bulk of these activities are conducted on behalf of and in support of your Affiliates , all private non-profit groups of a “M- orientation” and who mostly are not § 501(c)(3) or § 501(c)(4) organizations, you have not established that these activities are conducted to further a social welfare purpose.
I did find at least one organization that uses the technique described. It is the American Pastors Network.
Pennsylvania Pastors Network can help you identify unregistered voters in your congregation and get them registered!
It’s a simple process:
You provide the names and addresses of your congregation. (We provide a non-disclosure agreement concerning your church member list.)
We run your church member list through our Registered Voter Look-up Service. A week later, we send you a report showing who is not registered to vote.
You send a voter registration form and letter to anyone who is not registered.
On APN’s donor page it suggests that donations to it it pass through Capstone Legacy Foundation. I don’t know what that says about APN’s status, although their representative did indicate they are exempt.
I don’t rate APN as likely being GOCKV, but I found their explanation of the process very slick.