Kerger: Conclusion leapingWritten by Rick Kerger | | firstname.lastname@example.org
President Barack Obama’s problem with the IRS and its handling of applications for tax-exempt status on behalf of conservative organizations is frankly a self-inflicted wound. Not because the he or anyone in his staff directed the IRS staffers to do what they did, but because he leapt to the conclusion that what they had done was wrong.
I, like most Americans, do not have a lot of sympathy for the IRS. My guess is that there are more Republicans and Tea Party members at the lower levels than there are Democrats. People who enjoy a job managing numbers and following rules — something they do well — is not exactly a word picture of most of us Democrats.
I have had two occasions to get a group qualified as a tax-exempt organization. The reason you want that status is simple. Donations can be deducted from the taxpayer’s income and there are other benefits regarding the expenses of the organization. One of the organizations provided medical care in Haiti and the other group wanted to improve medical care for Native Americans. Simply put, the applications were a pain in the rear-end, but I managed to get both of them done.
What complicates the Tea Party situation is that there is an express prohibition against “political activities” carried out by tax-exempt organizations but none for such organizations if they confine themselves to “lobbying,” But to my ear “politics” and “lobbying” seem awfully similar, a distinction without a difference. But under the tax rules, it makes a heck of a difference.
What complicates the matter further is that once an organization has applied for tax-exempt status, its donors can take deductions against their federal income tax. This begins as soon as the application is made. It is possible that no set of eyes in the IRS have seen the form when donors start writing checks and start taking deductions.
What happens, you may ask, if it is ultimately determined that this organization does not qualify? Well, those tax deductions are no longer available and the persons would have to amend their returns and, probably, they would look to the organization to give the money back.
Now you may view that as a stupid rule, but if someone is really interested in getting their organization up and running, and all of them are, this gives them a way to do it. But there is a risk if they ultimately do not qualify.
The people in Cincinnati charged with making these decisions in the first instance sat in cubicles in Cincinnati with the tax code in front of them. They were not tax accountants or lawyers. They were honest, hard-working folks who, like most of us, want to do their jobs correctly. They had stacks of applications on their desks, all alike but all different. Consider, again the important difference between “political” activities and “lobbying” activities. Factor in the profile of the Tea Party membership. Were these groups seeking tax-exempt status engaged in political activity or lobbying? When you are trying to nominate a presidential candidate, seems to me you are being pretty darned political.
Put simply, this was not a simple or easy job. While it is certainly possible that the president could have reached down to the lowest level of the IRS and that political factors drove the decisions, the nature of the regulations and the volume of the work to be performed could just have easily led to the same result. And since in life if there are two answers, it is generally the simpler one that is correct, I think the president threw a bunch of innocent people under the proverbial bus without even trying to defend their actions.
Now I suppose if he would have tried to defend them, this would have made the attack focus even more on him because it would be suggested he was defending them in an effort to cover it up. The presidency is not a job for the timid or uncertain. By now he should know that and he should have acted differently.
Rick Kerger is a trial lawyer at Kerger & Hartman LLC in Toledo.