Why Is It So Hard to Keep the IRS Out of Politics?

Government officials need a refresher course in the First Amendment "anti-retaliation" principle.
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Kevin Lamarque/Reuters

Do Americans have a First Amendment right to form political committees named "Tea Party" (or for that matter, "Obama is from Kenya") without triggering an investigation by the Internal Revenue Service because of the name they picked?

In law, as so often there are two answers. One, of course, is "Yes."

The other is "@#$% yes."

Anybody has the right to engage in politics without being targeted for investigation because of their point of view. That's hornbook First Amendment law. Investigations -- whether criminal or regulatory -- ought to be governed by objective criteria, in which political viewpoint plays no part.

This is the constitutional backdrop to the revelation that officials in the IRS apparently used the name "Tea Party," or the point of view expressed in statements of purpose, to decide which "social welfare groups" to scrutinize when they applied for tax exemptions. These groups, known as 501(c)(4)s, are tax-exempt even if they engage in some political activities -- as long as politics is not the group's "primary activity."

Campaign reform groups have, with good reason, protested that some of these groups are pushing the rules. Since they aren't required to disclose their contributors, this makes them potential conduits for "dark money" to influence political campaigns. A number of reform groups have urged the IRS to investigate the groups more closely to make sure they really have a non-political "social welfare" purpose. There would be nothing wrong with such an investigation; but it would have to use fair, neutral criteria for picking its targets.

The IRS, however, chose another path. Sometime in March 2010, according to a government timeline published by the New York Times, someone in the IRS unit responsible for 501(c)(4) regulation began singling out applications from groups with "Tea Party" in the name. (Also flagged: "Patriots" and "9/12," and, remarkably, "We the People.") In January 2012, the criteria expanded to include "[p]olitical action type organizations involved in limiting/expanding government, education on the constitution and bill of rights" and "social economic reform/movement." Though the director of the unit learned about what was going on by June 2011, higher-ups assured Congress in March of the next year that no groups were being targeted for viewpoint reasons.

Now the mess has come spilling out. It's a good time for us to take a look at the "anti-retaliation" principle in First Amendment law. That principle was stated in 1972, in a case called Perry v. Sindermann:

[E]ven though a person has no "right" to a valuable governmental benefit, and even though the government may deny him the benefit for any number of reasons, there are some reasons upon which the government may not rely. It may not deny a benefit to a person on a basis that infringes his constitutionally protected interest, especially his interest in freedom of speech. For if the government could deny a benefit to a person because of his constitutionally protected speech or associations, his exercise of those freedoms would in effect be penalized and inhibited.

That principle extends to political conditions attached to tax exemptions. That principle ought to extend to being subjected to burdensome investigations too. "I'm not sure how much law there is because it is one of these things that everyone agrees shouldn't happen," Professor Lloyd Hitoshi Mayer of Notre Dame Law School, who has written extensively on the law and politics of tax exemptions, said in an interview yesterday. In the past, presidents (including Franklin Roosevelt, John F. Kennedy, and Richard Nixon) have used the IRS to intimidate or harass opponents; but after Watergate, there was general agreement that the agency needed to be non-political, and, by and large, it has been. From 1997-2000, the Congressional Joint Committee on Taxation investigated the IRS to determine whether the exemption process was being politicized; its report found "no credible evidence" that it had been. Two conservative organizations that claimed the Clinton-era IRS targeted them for audit or revocation of status; the District of Columbia Circuit found they didn't have the evidence.

In one of the few successful cases on record, the D.C. Circuit in 1980 slapped down the Service for denying an educational exemption to a feminist organization with the memorable name of Big Mama Rag, Inc. The group published a newspaper, and the Service concluded that it didn't qualify for exemption because, in part, the newspaper did not provide a "full and fair exposition" of the matters it wrote about.

"We are sympathetic with the IRS's attempt to safeguard the public fisc by closing revenue loopholes," the court wrote. "Applications for tax exemption must be evaluated, however, on the basis of criteria capable of neutral application. The standards may not be so imprecise that they afford latitude to individual IRS officials to pass judgment on the content and quality of an applicant's views and goals and therefore to discriminate against those engaged in protected First Amendment activities."

That's where the IRS went off the rails. Whatever else the Tea Party and allied groups may be, they are engaging in free, lawful speech, peaceably assembling and petitioning for redress. It's unacceptable that anyone in government should try to delay or deny a tax benefit because of the name they chose or the point of view they espoused.

We need to use this miserable spectacle as a teachable moment. "They had it coming" is not an acceptable response; neither is "President [you choose the name] did it too," and neither is "the Republicans are politicizing this." Moments like this are why we have an opposition party, and I hope the House conducts an investigation aimed at getting the facts.

President Obama's statement Monday was a good start for the Administration. Obama correctly noted that "this is pretty straightforward. If, in fact, IRS personnel engaged in the kind of practices that had been reported on and were intentionally targeting conservative groups, then that's outrageous and there's no place for it. And they have to be held fully accountable, because the IRS as an independent agency requires absolute integrity, and people have to have confidence that they're applying it in a non-partisan way -- applying the laws in a non-partisan way."

Beyond that, though, the Administration should get out in front of investigating the mess. "A few bad apples" won't work as a response either, unless a credible investigation shows that's all it was. If I were Obama, I'd ask Eric Holder to appoint a special prosecutor to find out whether any political officials -- from the Administration, from Congress, or from state governments -- tried to intervene with the IRS to push the policy in this toxic direction. I wouldn't do that because it's good politics; I'd do it because the President has a duty to "take care that the laws be faithfully executed."

The rest of us need to stay on the case. The First Amendment doesn't belong to courts. Either it lives inside all of us or it dies. Is our culture so degraded that educated civil servants don't know enough about free speech to slap an idea like this down at its inception? If so, let's make sure they don't forget this lesson again soon.

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Garrett Epps, a former reporter for The Washington Post, is a novelist and legal scholar. He teaches courses in constitutional law and creative writing for law students at the University of Baltimore and lives in Washington, D.C. His new book is American Epic: Reading the U.S. Constitution.

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