The outrage over the IRS’s conduct in targeting certain tax-exempt groups is based on a misunderstanding. Obviously, mistakes were made in how the IRS examined the groups, but what should not get lost amid the resulting hue and cry is that this is fundamentally about disclosure of donors, not tax-exempt status. First of all, the IRS is to a certain extent in the “targeting” business. The agency’s job — like it or not — is as an enforcer. It is supposed to go after tax scofflaws. It has to look for clues in tax returns and other materials to find the cheaters and dodgers. In the current scandal, the method of the “targeting” — searching returns for names like “tea party” as indicators of possible misfeasance — was a mistake. But it does not follow that the IRS should not have been looking at these and other groups as a class, without regard to political affiliation.
Second is the question of what the IRS is looking for. Because the IRS is the cop guarding tax-exempt status, we think that the IRS is supposed to be deciding whether a group should be granted the “privilege” of tax exemption. It follows that we would and should be outraged if the IRS grants or denies the “privilege” because of an organization’s political beliefs.
But this is wrong. This is not really what the IRS is doing when enforcing the tax laws in this context. To be clear: Tax exemption here is not much of a privilege and is not the main issue.
Full Article: Opinion: IRS scandal is about donors, not tax – CNN.com.