Why, Exactly, is it Wrong For the IRS to Consider a Group's Name?


Back in 2013, a scandal erupted at the IRS when an Inspector General's report (probably) commissioned by Congressional Republicans found that when processing applications for nonprofit 501(c)(3) and (4) status, the IRS had used keywords in organizations' names ("Tea Party," "9/12," "Patriot") to pull applications for secondary screening.  The report conveniently failed to mention that keywords like "Occupy," "ACORN," and "Progressive," were also flagged, a point brought up in reports on the scandal by the Senate Finance Committee and Senate Permanent Subcommittee on Investigations, though the Democrats and Republicans sharply disagreed on whether conservative groups were treated differently than liberal ones.

The scandal was briefly back in the news a week or so ago, when the IRS lost a discovery appeal in a subsequent lawsuit brought tea party groups about the matter. 

(An aside I find hilarious: the Finance Committee Report goes out of its way to praise itself for its bipartisanship, saying that, "[d]espite the partisan political nature of these allegations, the Committee proceeded in true bipartisan spirit . . . [I]t is important to stress that this Committee has conducted the only bipartisan investigation into the matter."  The 143 pages of the main report are then followed by nearly 200 pages of "Additional Views" by the Democrats and Republicans in which they sharply disagree over whether conservative groups were targeted -- the question which is basically the whole fucking reason this scandal existed.  Way to rise above, guys.)

Anyway, I've read through all these reports and my takeaway was that the IRS was woefully mismanaged and understaffed, and caused unnecessary delays, but probably wasn't using partisan targeting. But here's the point that's also confused me, since this story erupted: Why is it so bad to look at a group's name when deciding if they need additional screening?

When the story first broke, it was just accepted that it was "obviously wrong" for the IRS to use a group's name for secondary screening.  Not "arguably wrong" or that it gives the appearance of bias, but that it was "obviously wrong."  This was a formula I saw a lot, especially when liberal-leaning or neutral commentators wanted to push back on the targeting spin: "Yes, selecting a group for secondary screening because of their name is obviously inappropriate, but it's not clear the IRS only selected conservative groups blah blah blah . . . ." 

I get why targeting one side only is wrong, but how the fuck is a group's fucking name an inappropriate criteria when trying to figure out what they're doing?

Let's step back for a moment.  In 2010, the Citizens United case uncorked unlimited donations to political action committees.  The Court noted the importance of disclosure in allowing citizens to evaluate political messages in this environment, stating that "disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages."

Of course, as came as a surprise to nobody, campaign groups immediately sought out ways to circumvent even these limited requirements, one of which is to funnel money and political activity through 501(c)(3) and (4) organizations, groups nominally created for charitable purposes that do not have to disclose donors.   Unsurprisingly, in the wake of Citizens United there was an explosion in political spending by 501(c)(4) groups.  

So, you're the IRS.  The Supreme Court has just ruled that corporations can pump unlimited money into politics.  You are inundated with thousands of new 501(c)(4) applications, nearly double in 2012 over 2008.  You have to pick some for secondary screening to see if they're actually engaging in partisan political activity.  Sitting in front of you are applications from (1) The St. Louis Chamber Orchestra, (2) The 14th Street Orphanage, (3) The Boston Cookie Jar Museum, and (4) The Tea Party Patriots of Seattle.  Hmmmm . . . is one of these organizations a little more likely to be conducting political activities than the others, and maybe deserves a second look? Isn't the first piece of information you'll look to for any group their fucking name?! I mean, you shouldn't judge a book by its cover, but if you're looking for clues about the topic of a book, you check the fucking title!

In fact, as noted in the Senate Finance Committee Report, the Chief Counsel of the IRS Inspector General's Office, Michael McCarthy, agrees with me.  In an email cited by the report, he states:

Also, it is not clear why exactly we find the criteria used were ‘‘inappropriate.’’  It is because specific names associated with political activity shouldn’t be used as criteria? That would seem to make it difficult for the IRS to identify potential political applications for referral to the specialized unit.