Social welfare ... for whom?
Ever since the revelation of the IRS' ham-handed processing of tax-exemption requests from conservative and, as it turns out, liberal political advocacy groups, the primary discussion has been about whether the executive branch agency was motivated by politics.
That discussion is important, but it overshadowed the equally important underlying issue that prompted the IRS inquiries in the first place - tax exemptions for political advocacy groups masquerading as "social welfare" organizations under Section 401(c)(4) of the tax code.
Wednesday, U.S. Rep. Chris Van Hollen, a Maryland Democrat, and three groups that advocate for full disclosure of campaign donations, sued the IRS in federal court for its alleged misuse of the social welfare exemption.
The social welfare exemption enables organizations to keep secret the identity of their donors, even if most of their activity is political advocacy.
Under the 1959 law establishing the exemption, social welfare organizations must 501(c)(4) organization must devote themselves "exclusively" to social welfare activity, and the IRS' own definition doesn't include political advocacy.
Yet the IRS routinely has awarded the exemptions for decades.
After the 2010 Citizens United decision lifted the ban on campaign spending by corporations, unions and other organizations, the IRS received a flood of 501(c)(4) applications from organizations across the political spectrum.
Congress, many members of which seethed over the IRS' alleged political motivation, should resolve the problem by uniformly requiring disclosure of donors by political advocacy groups.