Thomas Piketty1 360x1000
Margaret Fuller5 360x1000
Ruth Bader Ginsburg 360x1000
Margaret Fuller 2 360x1000
1theleasofus
Susie King Taylor 360x1000
8albion'
Adam Gopnik 360x1000
Anthony McCann2 360x1000
2trap
199
299
storyparadox2
Richard Posner 360x1000
Storyparadox1
LillianFaderman
5confidencegames
10abion
1albion
Margaret Fuller2 360x1000
storyparadox3
2albion
6confidencegames
2theleastofus
12albion
2lafayette
9albion
1jesusandjohnwayne
Office of Chief Counsel 360x1000
1lauber
Margaret Fuller1 360x1000
7albion
Edmund Burke 360x1000
4confidencegames
Maria Popova 360x1000
Margaret Fuller3 360x1000
2lookingforthegoodwar
lifeinmiddlemarch1
Gilgamesh 360x1000
399
Thomas Piketty3 360x1000
1empireofpain
1madoff
1gucci
2confidencegames
Susie King Taylor2 360x1000
1lafayette
2transadentilist
499
1transcendentalist
13albion
4albion
Lafayette and Jefferson 360x1000
14albion
George M Cohan and Lerarned Hand 360x1000
James Gould Cozzens 360x1000
George F Wil...360x1000
11632
3theleastofus
1confidencegames
Thomas Piketty2 360x1000
1falsewitness
Brendan Beehan 360x1000
7confidencegames
2jesusandjohnwayne
3albion
Tad Friend 360x1000
2defense
3confidencegames
2falsewitness
AlexRosenberg
Maurice B Foley 360x1000
1lookingforthegoodwar
Anthony McCann1 360x1000
Mark V Holmes 360x1000
Stormy Daniels 360x1000
6albion
2paradise
Mary Ann Evans 360x1000
1defense
Spottswood William Robinson 360x1000
Betty Friedan 360x1000
1trap
lifeinmiddlemarch2
3defense
Margaret Fuller 360x1000
Margaret Fuller4 360x1000
3paradise
5albion
Learned Hand 360x1000
Samuel Johnson 360x1000
2gucci
1paradide
11albion
I wasn’t going to write anymore about the Tea Party/IRS/501(c)(4)/dark money mess that is currently gripping the blogosphere, but then as I was driving home last night, I heard that there was a report on it issued by the Treasury Inspector General for Tax Administration.  It has the catchy title of Inappropriate Criteria Were Used To Identify Tax-Exempt Applications For Review.  I would have titled it “The Cincinnati Gang That Couldn’t Sort Straight”,  but that’s why I’m a tax blogger and not working for the Inspector General. My executive summary of the report is “Nothing to see here folks, let’s move on to serious matters”. But why don’t you go on and read the whole report yourself ?

The part of the report that made me believe that much of the whining about this whole incident is phony is this:

As of May 31, 2012, 32 (36 percent) of 89 I.R.C. § 501(c)(3) potential political cases were open more than 270 calendar days, and the organizations had responded timely to all requests for additional information, as required. As of the end of our fieldwork, none of these organizations had sued the IRS, even though they had the legal right. In another 38 open cases, organizations were timely in their responses to additional information requests, but the 270-calendar-day threshold had not been reached as of May 31, 2012. These 38 organizations may have the right to sue the IRS in the future if determinations are not made within the 270-calendar-day period.

So, none of the organizations that have the right to take the IRS to court over their exempt status determination being delayed have bothered to do so.

A commenter on a New York Times piece gave a great summary of the insignificance of the whole thing:

As a CPA who has prepared applications for exempt status, I do not see how any tea party organization was harmed.  A nonprofit can commence operations while the application is in process, and all of these applications were either approved or are still in process (except for a few withdrawn by the applicants themselves).

The report still makes a good read though.  In the final stage of my career, I developed a small appreciation for what it is like to be inside the bowels of a large organization where competing and contradictory directives come from different management levels with different agendas, which is the story I read in the IG report.

The IRS was criticized for not paying enough attention to political activity of exempt organizations and hit with a surge in applications.  They formed a specialist group to review applications of organizations that appeared to be likely to engage in political activity.  If your application got sent to the specialist group, it was slowed down.  Ultimately, they became paralyzed because they could not figure out what criteria they should be using.  More people got involved.  The left hand did not know what the right hand was doing.

In my view the underlying problem is trying to use the IRS exemption process to accomplish too many competing objectives.  Their mission is to collect taxes and that is a big enough job for them.  My sympathy right now is with the line employees in the exempt group.  I suspect some of them will be posting the little poem that I have seen in offices here and there over the years:

It’s not my job to run the train, the whistle I can’t blow.
It’s not for me to say how far the train’s allowed to go.
I’m not allowed to blow off steam, nor even clang the bell.
But let the damn thing jump the tracks….and see who catches hell.

You can follow me on twitter @peterreillycpa.