What the IRS Was Doing

In the hubub surrounding the IRS “targeting” of applications for tax-exemptions by groups with “Tea Party” or “patriot” in their names, it’s worth considering what the IRS underlings were actually doing.

A general application for a tax-exempt organization is done on IRS form 1024. (A different IRS form is used for 501(c)(3) charitable organizations that are tax-exempt and for which donations are tax-deductible.)

www.irs.gov pub irs pdf f1024-3

An initial question asks about the organization’s activities:

www.irs.gov pub irs pdf f1024-2

And a follow up question, specifically for social welfare 501(c)(4) organizations asks about political activities:

www.irs.gov pub irs pdf f1024

One can easily understand that an application with inconsistencies in the activities described in the two questions should get some IRS scrutiny. So it is also easy to understand that a proliferation of similar organizations with similar inconsistencies might warrant some shortcuts in a busy IRS office.

That’s not to justify the IRS actions. Indeed, the IRS should be looking at each application objectively on each application’s own merits. Still, as the inevitable investigations begin, it will be interesting to actually see some of the applications by the Tea Party groups that were “targeted” by the IRS. The investigations are likely to cut both ways.

UPDATE 5/13: Ezra Klein and Evan Soltas at WaPo’s Wonkblog say some similar things.