Originally published on Forbes.com.
Too many Universities and School Systems are about Radical Left Indoctrination, not Education. Therefore, I am telling the Treasury Department to re-examine their Tax-Exempt Status…
— Donald J. Trump (@realDonaldTrump) July 10, 2020
My Trump Coverage So Far
Ever since I attended then primary candidate Donald Trump’s rally in Worcester MA in 2015 and at his encouragement read Art of The Deal and Think Big: Make It Happen in Business and Life, nothing he has done has surprised me. I have noted criticism of him that has been totally unjustified or exaggerated.
Just this week the New York Times reported that among the hundreds of thousands of businesses that received more than $150,000 in Paycheck Protection Program funds were 20 tenants at 40 Wall Street as if that was something worth reporting. More controversially, I have argued that reactions to the Trump Foundation’s peccadilloes were overblown and that there are many, many private foundations that would look at lot worse if put under that sort of a microscope.
Over The Top
His recent tweet in which he claims to have ordered the Treasury to reexamine the Tax-Exempt status of Universities and School Systems because they practice “Radical Left Indoctrination not Education” is kind of stunning, though. He is taking one of the greatest article of faith grievances against the Obama administration, what I call Teapartygate and is standing there with the smoking gun that the Republicans could never prove in the case of Obama.
The IRS Scandal
It is a tenet of Republican faith that the Obama administration ordered the IRS to “get the Tea Party”. Paul Caron started day by day coverage of the IRS Scandal beginning on May 20, 2013 with IRS Admits to Targeting Conservative Groups in 2012 election.
“After months of denying that the IRS has been targeting tea party groups for special scrutiny, Lois Lerner, Director of the IRS’s Exempt Organizations Division, admitted that the IRS had been giving additional scrutiny to applications for tax-exempt status from groups with the “Tea Party” or “patriot” in their title. She denied there was any political motivation and blamed the practice on a low-level employee in Cincinnati.”
Dean Caron began numbering the days with Day 5 (May 14, 2013). He included an indirect link to a news conference in which President Obama stated:
“If, in fact, IRS personnel engaged in the kind of practices that have been reported on and were intentionally targeting conservative groups, then that’s outrageous”
The “scandal” day count continued unbroken until Day 1352 (January 20, 2017). It continued sporadically after that. It appears that the last two posts on days 1826 and 1827 (May 11 and 12, 2018) are a debate about whether there really was a scandal.
“Strangely enough, the IRS did target organs of the opposition party during the last administration, but the episode has largely faded from public memory without resolution. May 10 marks the fifth anniversary of the revelation that President Obama’s IRS targeted conservative groups for more than two years prior to the 2012 presidential election.”
“The record shows that the number of conservative groups whose applications were given extra scrutiny was larger than the number of centrist and liberal groups. That, however, tells us nothing about IRS bias, only about the competency and propriety of the applicants. I expect drunks in bars to misunderstand such issues, but not professors.”
No Smoking Gun
What never surfaced was direct, smoking gun type evidence, of President Obama ordering the IRS to target conservatives. In one of my goofier posts, which never appeared on this dignified platform I tried to imagine the tape that the scandal mongers were hoping to find. I’m not going to quote that piece, because I have right wing friends that would think it was real.
The Republican narrative in the Senate report on its investigations had to rely on a sort of “tone at the top” argument:
“……. prevent us from concluding that the Obama Administration and the Treasury Department did not direct, approve of, or allow any aspect of the targeting of Tea Party groups.
Regardless of whether an explicit directive was given, the President’s use of his bully pulpit had the effect of increasing scrutiny on conservative organizations, rendering a direct order to individual employees unnecessary”
We Will Know Who Ordered It
This time, if whatever is left of the Exempt Organization enforcement in the IRS starts a campaign to revoke the exempt status of universities for being “Radical Left”, it is really clear who gave the order. And it is, in fact, perfectly consistent with how President Trump advises people to act.
It seems likely that he believes that the Obama administration did target conservatives. He appears on Day 1024 (February 27, 2016) claiming that he has been audited of the past 12 years because he is such a “strong Christian” So what should be done? You can see it in Think Big: Make It Happen in Business and Life:
“When someone crosses you, my advice is “Get even!” That is not typical advice, but it is real-life advice. If you do not get even, you are just a schmuck! When people wrong you, go after those people, because it is a good feeling and because other people will see you doing it.”
It will be interesting what the reaction of the scandal believers to the tweet will be.
Other Comment
I reached out to my exempt organization brain trust and was pleased to get some responses on short notice.
Paul Streckfus, Editor, EO Tax Journal wrote:
“There has been a long tradition of the IRS not being directed by the President or White House staff to direct IRS audits. The last person who attempted this was Richard M. Nixon. It’s now up to IRS Commissioner Charles Rettig to tell Trump (and the citizens of the United States) that the IRS remains independent of the White House. Unfortunately, Rettig has already allowed the White House to dictate IRS policy in regard to information reporting by tax-exempt organizations.”
Professor Adan Chodorow, Associate Dean for Academic Affairs at Arizona State University wrote:
“Trump really doesn’t understand or believe in the first amendment. He was outraged when it appeared that the IRS had used terms like “freedom” and “liberty” to screen exempt orgs to ensure that they were complying with the rules related to political engagement that apply to (c)(4) organizations. Yet now he is suggesting that universities lose their tax exempt status because they allegedly are “about Radical Left Indoctrination.” Setting aside the smear against educational institutions and those who work there, the government should not use the tax code to police speech with which it disagrees. Section 501(c)(3) explicitly provides tax exempt status for schools. Under some very limited circumstances, such as where a school precludes interracial dating, the Treasury Department can revoke the tax exemption on the theory that the organization violates an important public policy. However, claiming that schools are insufficiently conservative is not a basis for revoking their exempt status. Like many things Trump says, this seems more designed to generate enthusiasm on the one side and outrage on the other, than it reflects a well thought out position grounded in the law or an action likely to produce results.”
Professor Samuel Brunson of Loyola University Chicago School of Law wrote:
“There are two significant problems with President Trump’s tweet. The first is a technical one. For purposes of the federal tax exemption, an organization doesn’t fail to be “educational” because it advocates a point of view. In fact, advocating a point of view is central to any number of exempt organizations. And the Treasury regulations expressly allow for it.
But there’s a nontechnical problem, too, which is in many ways worse. President Trump seems to want to emulate the worst aspects of President Nixon. Nixon tried to use the IRS to attack his enemies. And Trump wants to use the IRS to attack people and organizations with which he disagrees. Fortunately, there are protections in place making it hard for him to use the IRS this way. But he’s proven particularly effective at ignoring and subverting norms; this is one that I hope he doesn’t manage to subvert.”
That’s it for now.