WSJ: IRS Should Stick to Revenue Collection, Avoid Politics

As the Senate Finance Committee prepares to hold confirmation hearings Tuesday for John Koskinen as President Barack Obama's next Internal Revenue Service commissioner, Bradley Smith writing in the Wall Street Journal is urging the IRS to stick to revenue collection and stay out of politics.
 

The IRS recently unveiled plans to limit the political activities of nonprofits. Smith, a former chairman of the Federal Election Commission, sees this as a continuation of the agency's targeting of conservative organizations and its drift toward political regulation.

The left wants private information about conservative donors disclosed as a way to silence them, writes Smith. "Democratic politicians and progressive activists think new rules limiting political speech by nonprofits will benefit Democrats politically."

He says that not until conservatives started using Section 501(c)(4) not-for-profits, starting in the 1990s, to do voter education did the IRS advocate revealing the names of donors.

 

"People have a right to engage in anonymous political activity," writes Smith. Publicizing the names of conservatives donors opens them up to intimidation and threats of violence.

Debunking "myths" promulgated by progressives, including Rhode Island Democratic Sen. Sheldon Whitehouse, who has introduced legislation to crack down on what he calls "dark money activities," Smith states that 501(c)(4)s are not "charities," that it is perfectly legitimate for them to be engage in politics, and that conservative donors are not reaping surreptitious tax breaks.

The tax code enumerates various categories of nonprofits. Traditional charities such as the Red Cross and American Cancer Society fall under Section 501(c)(3), whereas Section 501(c)(4) is conventionally set aside for advocacy organizations.

There is no statutory prohibition in Section 501(c)(4) against political activity. Moreover, donations to 501(c)(4) non-profits are not tax deductible and that "wouldn't change if they were reclassified as political committees," writes Smith.

If the issues isn't taxes, what do progressives really want, asks Smith.

Koskinen, the former chairman of Freddie Mac, is reported to have a net worth of between $7.1 million and $27.4 million, according to Accounting Today.

 

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