Sunday, May 19, 2013

Bureaucrats Say The Darndest Things!

Let's do the math. The the IRS and its defenders contend that in the beginning of 2010 there was a sharp up tick in the number of applications seeking 501(c)(3) and 501(c)(4) status. There is some variation in these numbers depending on the source. Quoting from the inspector general's report;
" Between 2010 and 2012, the number of applications for 501(c)(4) status more than doubled, from 1,591 to 3,398."
Lois Lerner provided slightly different numbers but one assumes they are both referencing the same approximate groups. FoxNews reports the following.
During the conference earlier Friday, Lerner said the number of groups filing for the tax-exempt status more than doubled from 2010 to 2012, to more than 3,400. To handle the influx, the IRS centralized its review of these applications in the office in Cincinnati. As part of the review, staffers look for signs that groups are participating in political activity. If so, IRS agents take a closer look to make sure that politics isn't the group's primary activity, Lerner said.
In all, about 300 groups were singled out for additional review, Lerner said. Of those, about a quarter were singled out because they had "tea party" or "patriot" somewhere in their applications. Lerner said 150 of the cases have been closed and no group had its tax-exempt status revoked, though some withdrew their applications.
The pretext that the tax exempt division of the IRS (TE/GE) was suddenly inundated to the point of paralysis has been allowed to stand far to long. Driven by a desire to achieve essential efficiency to meet the horrendous surge in 501(c)(4) applications, the IRS employed dubious methodology that inadvertently singled out tea party groups. Usually the speaker manages to include a pejorative mention of the Citizens United decision as if that expansion of corporate political rights somehow birthed the tea party movement.
Getting the numbers on the TE/GE's workload is not easy but we can view one source. Speaking at the Georgetown University Law Center of Continuing Legal Education on June 23,2009 one Sarah Hall Ingram delivered a speech entitled Nonprofit Governance – The View from the IRS. If, for the sake of argument, we believe Ingram and use her numbers, an annual increase of 903 cited by the inspector general's report (3398-1591=1807/2=903) would constitute less than 5 days of work if one assumes the staffing level remained unchanged since the 3 year period of which she spoke.
The number of approved tax-exempt organizations in 2008 was 1.9 million, and that does not include all churches. This represents a 50 percent increase since 1995. In the three years I was away from TE/GE, the Service approved more than 200,000 new applications for tax-exempt status – that’s 182 organizations every day, Saturday, Sunday and federal holidays included. Even over the last year the number of applicants has not fallen off, but actually appears to have slightly increased.
Now, one can quibble that the inspector general's report and Lois Lerner's numbers quoted above refer specifically to 501(c)(4) applications but is the IRS's expertise is so compartmentalized that only a limited number of tax specialists can process that particular type of application? Could not the additional work be pushed of on other employees when they got back from their coffee breaks or internet porn searches? This is an agency that is processing more than 70,000 applications per year and we are to believe that 300 or so tea party groups broke the camels back?
Also notice in the above text that as of 2008 there existed 1.9 million tax exempt entities yet the absurd argument put forth by defenders of the IRS is that the 300 or so tea party groups are a threat to the solvency of the government. We have yet to hear that concern when speaking of Planned Parenthood or Media Matters.
Lies, damned lies, and statistics!

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