Congress should take tax collectors out of the business of regulating political activity.
Imagine if liberal groups discovered
that President Trump’s Internal Revenue Service was targeting them for
heightened scrutiny or harassment.
The media and Democrats would decry this
assault on the First Amendment and declare the U.S. on the brink of autocracy.
The scandal would dominate the midterms, and the legitimacy of the election
would be called into question.
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.
While some of the faces at the IRS
have changed, the law that enabled their misuse of power has not. Congress’s failure
to address the problem leaves the U.S. democratic process vulnerable to further
abuses.
Lois Lerner, the career official at
the center of the IRS scandal, retired on full pension after invoking her Fifth
Amendment right against self-incrimination before Congress.
John Koskinen,
appointed IRS commissioner by Mr. Obama to lead the agency “in difficult
times,” served his full term, spending the better part of four years
stonewalling congressional requests for information. On his watch, the
IRS destroyed evidence subject to subpoena.
The response from the political
system showed early promise but quickly fizzled.
After initially expressing
shock, Mr. Obama abandoned any pretext of interest, suggesting it was a “phony
scandal.” And why not?
A 2012 American Enterprise Institute study found
that tea-party organizations substantially increased conservative turnout in
the 2010 midterms.
The agency’s suppression of those groups in the following
years might have given Mr. Obama’s re-election a boost.
Democratic officials deserve much of
the blame for the IRS’s improper and likely illegal harassment.
The president warned against tea-party groups in ominous
terms, describing them as threats to American democracy. Democratic senators
repeatedly wrote to IRS leadership to urge them to investigate conservative
nonprofits.
The IRS responded to this hectoring
from the political branches.
Its initial reaction to the scandal was to propose
new regulations institutionalizing the discriminatory practices, as if the
problem was merely that conservative organizations didn’t know in advance that
the IRS would single them out.
A public outcry stopped those regulations in
their tracks, and in budgets since 2015 Congress has prohibited the IRS from
spending money on that rule-making project.
With that congressional tweak and
the retirement of Ms. Lerner, many conservatives seem to think Washington has
turned the page on IRS abuse. Meanwhile, too many Democrats seem to think that
this could never happen to them. Both are wrong.
The IRS scandal was not the
result of a few rogue IRS employees; the problem is that the IRS is involved in
regulating political activity.
A group that engages in politics is
not necessarily considered a “political committee” by the IRS. Such well-known
political actors as the Sierra Club, the National Association for the
Advancement of Colored People and Planned Parenthood engage through their
affiliates in substantial activity related to politics—including
get-out-the-vote drives, legislative advocacy and even candidate ads.
But
because the IRS designates the affiliate groups as “social welfare”
organizations, they are subject to less-stringent disclosure requirements.
The tea-party groups that sprang up
in 2009 sought to engage in these types of activities, but some Democrats
didn’t like it. If the IRS denied these groups status as social-welfare
organizations, they would be forced to either reorganize as for-profit
organizations or as political committees subject to greater regulatory burdens.
That’s how the IRS was able to hassle conservative groups.
The easy fix here would be for
Congress simply to scrap restrictions on political activity by social-welfare
organizations, thereby stripping the IRS of authority to decide which groups
are “political committees” and which aren’t.
In a democracy, political
activity is part of social welfare. Such a change would not affect federal
revenue, as contributions to social-welfare organizations are not
tax-deductible. There would be no “subsidizing political activity.”
The Federal Election Commission—a
bipartisan agency staffed by experts and created to oversee election-related
activities—is the proper authority to determine whether an organization should
be subject to regulation under campaign-finance laws.
The IRS—an agency
under control of the president, with no bipartisan checks, subject to
congressional pressure, and tasked with collecting revenue—is not.
There is a long history of
presidents from both parties using the IRS to harass political opponents.
Democrats and Republicans alike should recognize that, fix the law, and get the
IRS out of politics.
Mr. Smith, a law professor at
Capital University and chairman of the Institute for Free Speech, was chairman
of the Federal Election Commission in 2004.
