Spin relies on confusion, and both seem to be prevalent in the ongoing saga over an IRS targeting campaign that singled out certain types of groups for special scrutiny after they applied for tax-exempt status. The most important questions in the IRS controversy are: Who started the filtering policy, what were the motivations, and how do we prevent it from happening again? Let’s examine some of the most common misconceptions that could distract from those issues. IRS officials have suggested that the targeting campaign, which began sometime before mid-2010, started as a policy to deal with an overwhelming increase in tax-exemption applications. This is an unsubstantiated claim that Democrats have replicated to defend the tax agency’s actions.
“What if, a few years ago, there was an increase of communists in this country, a new communist club wanted to be tax exempt?” Rep. Jim McDermott (D-Wash.) asked during a congressional hearing on Tuesday. “Wouldn’t you want to be sure that the self-declared tax-free classification of those groups was correct?”
An inspector general’s report on the controversy shows that 501(c)(4) applications — the kind that were targeted — actually declined during 2010. That’s according the numbers the IRS provided during the audit. (See page 3 of the report.)
The data shows that no increase occurred until 2011, well after the targeting campaign began.