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The IRS and the Real Scandal

US Politics & Gov't  (tags: abuse, americans, candidates, corruption, dishonesty, elections, IRS, media, propaganda )

- 1854 days ago -
The IRS has interpreted our tax laws to allow big corporations and wealthy individuals to make unlimited secret campaign donations through sham political fronts called "social welfare organizations," like Karl Rove's "Crossroads,"-->

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Kit B (276)
Saturday May 25, 2013, 6:25 am
Image Credit: IRS Logo

The IRS and the Real Scandal

“This systematic abuse cannot be fixed with just one resignation, or two,” said David Camp, the Republican chairman of the House tax-writing committee, at an oversight hearing Friday morning dealing with the IRS. “This is not a personnel problem. This is a problem of the IRS being too large, too intrusive, too abusive.”

David Camp has it wrong. There has been a “systematic” abuse of power, but it’s not what Camp has in mind. The real scandal is that:

The IRS has interpreted our tax laws to allow big corporations and wealthy individuals to make unlimited secret campaign donations through sham political fronts called “social welfare organizations,” like Karl Rove’s “Crossroads,” the U.S. Chamber of Commerce, and “Priorites USA.”

This campaign money has been used to bribe Congress to keep in place tax loopholes like the “carried interest” rule that allows the managers of hedge funds and private equity funds to treat their income as capital gains, subject only to low capital gains taxes rather than ordinary income taxes, and other loopholes that allow CEOs to get special tax treatment on giant compensation packages that now average $10 million a year.

Despite a growing number of billionaires and multi-millionaires using every tax dodge imaginable – laundering their money through phantom corporations and tax havens — the IRS’s budget has been cut by 17 percent since 2002, adjusted for inflation. To manage the $594.5 million in additional cuts required by the sequester, the agency will furlough each of its more than 89,000 employees for at least five days this year.

Finally, all of this, coming at a time when the Supreme Court has deemed corporations “people” under the First Amendment and when income and wealth are more concentrated at the top than they’ve been in over a hundred years, has enabled America’s financial elite to further entrench their wealth and power and thereby take over much of American democracy.

This is the real scandal and the real abuse, Congressman Camp. Your indignation over the IRS’s alleged “targeting” of conservative groups is a distraction from the main event.

By: Robert Reich | Common Dreams |

Robert Reich's newest book: "Beyond Outrage"

Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including his latest best-seller, Aftershock: The Next Economy and America’s Future; The Work of Nations; Locked in the Cabinet; Supercapitalism; and his newest, Beyond Outrage. His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at


Angelika R (143)
Saturday May 25, 2013, 9:30 am
Amen, Robert, you got it right-as usual. I cannot even understand how it took so long for this scandal to come to light.. it should have been recognised and reveiled time ago as a consequence of relevant rulings. - Just think where America would be without those "social welfare organisations"- somehow the IRS being one of them ;)

lee e (114)
Saturday May 25, 2013, 9:58 am
Reich is Right :)
This following on the heels of the True "Scandal", which is that of Apple's off-shoring all of its income to be totally tax exempt - which of course, is nothing new, especially since Citizens United created a bunch of corporate (humans) to dictate its own laws and tax shelters and loopholes! It seems to me that there must be a resolution to these seditious "people"! Perhaps there is a way that no "person" who places monies off shore for tax exemptions should qualify as partakers in governance either to contribute financially, or to lobby, or create law. It is clear these "people" (corporations) have NO allegiance to ANY nation, but have other agenda that is against that of all nations, and therefore should be deemed national enemies! Just sayin'
Thanks Kit - for making me upset again:)

Kit B (276)
Saturday May 25, 2013, 10:01 am

All of this only leads me to believe more strongly than before that capitalism has out lived it's usefulness for this or any economy.

Sorry Lee that this article upset you.

Barbara K (60)
Saturday May 25, 2013, 10:19 am
I hope they are forced to put a stop to this thievery and fraud. Ever fund that got a tax break thru these fraudulent means should pay us back or go to jail or both. They are using dirty tactics like this to force us by their crooked means to end up funding the party we don't want to fund. That is just one instance. Geez, get these crooks out of our government. Remember all this com election day and let's vote with our brains.

Catherine O Neill (73)
Saturday May 25, 2013, 11:30 am
This doesn't come as any shock to me. All Gov't agencies know more about us then we know ourselves. Just like an English Muffin they're into every nook & cranny

Past Member (0)
Saturday May 25, 2013, 11:32 am
Best comment under the article:

"Finally, all of this, coming at a time when the Supreme Court has deemed
corporations “people” under the First Amendment and when income and
wealth are more concentrated at the top than they’ve been in over a
hundred years, has enabled America’s financial elite to further entrench
their wealth and power and thereby take over much of American
democracy." -R. Reich

Well, then it's not much of a democracy is it? Plutocracy is more accurate."

Thank you Kit!

Vallee R (280)
Saturday May 25, 2013, 11:35 am
Just hope they follow through....

Bryna Pizzo (139)
Saturday May 25, 2013, 12:06 pm
Thank you for the information. Did you know that some companies, such as GE even recieved tax rebates! Yes, I said tax rebates, while the rest of us pay every penny we owe, and heaven forbid if we fall behind. Then we are charged penalties and interest at a rate that is equivalent to a loan shark's rates. One can end up owing three to four or more times the amount that they owe originally or go to jail if unable to pay the amount owed. I guess it would be like a debtors prison as in Dicken's novels. Even the elderly have lost their homes to the IRS. These examples represent the fraud perpetrated upon the American people. Democracy was dead quite a number of years ago. The people pay the taxes for protection, education, and infrastructure. The protection has been cut to the bone because most of the funds go to Halliburton and other companies connected to the military complex. As far as education goes, students are being robbed blind by ever increasing student loan debt, and public schools are being closed left and right to allow corporations to buy the education system out and reach deeper into our pockets. If that isn't enought, our infrastructure is collapsing right before our very eyes, while the wealthiest and the corporations hoard their wealth overseas. In short, our democracy has been hijacked and we are being robbed blind. It seems as if we have no voice in the halls of government, and if we try to make ourselves heard we are carted away and jailed. I think both parties have played a roll in selling our democracy to the highest bidder, and I'm not sure how or even if we can take it back. Yikes! Do I press submit or delete? I may regret this, but where else can I voice my thoughts?

Mike M (40)
Saturday May 25, 2013, 12:50 pm
Unfortunately the country has been taken over by those who wish only to rule the masses and it has happened in the last twenty years. They make news and divert attention to laws and improprieties they then sent it motion and the general public know nothing about it until it comes around and kicks you in the head. This two party government was never to have happened and the founders of this country would be ashamed.

Esther Z (94)
Saturday May 25, 2013, 12:54 pm
Only in a Plutocracy would corporations be considered "people".....

Joanne D (38)
Saturday May 25, 2013, 1:50 pm
We here have been saying this for years, and asking why the IRS doesn't do its job. Well, gee, I guess if you get crucified for doing your job I guess it's understandable (although not forgivable) if you don't.

Marilyn M (145)
Saturday May 25, 2013, 1:55 pm
Noted. Thank you for posting, Kit.

Jason R (67)
Saturday May 25, 2013, 1:57 pm
I disagree with the whole opening. I want the IRS targeting the guys with the nylons pulled over their heads! That's their job.

"IRS being too large" The reason this has been made a scandal is because of the slashing of government jobs with this huge influx of robbers at the gate. They had to improvise to get to more robbers, faster. I say this in part, because of my good experiences with the IRS. They are people, not the boogie man. They are going after off shore tax cheats too.
I'm 100% positive we couldn't see Mitt's taxes for ten years because he had just been granted amnesty for his tax dodging. There is so little abuse, it's unmentionable.

That's jmho

Kathlene Lentz (30)
Saturday May 25, 2013, 2:25 pm
Dave Camp *used* to be a respectable human being, and one I used to support. That was before he became the Republican stooge that he is today, blindly following the party line and turning a blind eye to Republican and Big Corporation's wrongdoing. The only IRS scandal is that the Republicans are trying to make a scandal where none exists, and the Main Stream Media is playing along. This whole situation makes me want to scream--again.

Cathe romano (52)
Saturday May 25, 2013, 2:53 pm
Would there be an IRS scandal without the Republican's?

Lois Jordan (63)
Saturday May 25, 2013, 3:10 pm
Noted. Excellent piece---Reich said the most in fewer words than I've read anywhere else on this topic.

Kit B (276)
Saturday May 25, 2013, 3:13 pm

I don't want the IRS targeting any group or individual, on the other hand, one must pause and consider just what a group that is only aimed at being a political arm is doing asking for exemption under the 501c status. Of course they were examined and many groups whether democrat or republican have been scrutinized by the IRS. This not a scandal but rather another pity party by the tea party.


firedup N (0)
Saturday May 25, 2013, 3:25 pm
So misinformed and low information. He knows this has nothing to do with Crossroads and karl rove, in which the TP knows he is a traitor.
This has to do with the IRS delaying applications for 3yrs.. Asking personal private questions.
There will be many suits to the IRS for wrong doing and lying. These organizations kept their records and recorded the phone conversations for proof, since 2010, (they are still waiting answer to 501 c 4).

You may not care, but, what happens when the IRS that will be handling your Health Care decides they just do not like you. Then what? You decide

The Oddest Questions IRS Asked Tea Party Groups
such as
Are you on Facebook or other social networking sites? If yes, provide copies of these pages.”

Questions from the IRS “Original Letter” to Tea Party

Kit B (276)
Saturday May 25, 2013, 3:32 pm

I believe I know exactly where the low information and attempts at misinformation are, and they not are with Robert Reich. Very simple, the Tea bags were again attempting to put their hands in the cookie jar and were caught, now the republicans in Congress and the few and slimy tea bagger in Congress are scrambling to make their mistakes look like an Obama scandal. Only the few and stupid would fall for that.

Jae A (316)
Saturday May 25, 2013, 3:33 pm
By far the best article/thoughts that I have read on the topic to date !
Thanks for the posting Kit...and what great comments from so many !!!!!!!!!!!!!!!!!!!!!!!!!!!!

Janet R (38)
Saturday May 25, 2013, 3:42 pm
Any group seeking 501c status should be investigated BEFORE getting the exemption. Any organization using donated money to donate to political candidates should not be exempt. There is so much misinformation. I just read a letter to the editor of my local paper and the letter writer insisted that donating to the Democratic party was tax deductible. Obviously, that person never donated to any of these groups because you are told before you make the donation that it is not tax deductible so I wonder how these Tea Party groups were able to get away with it. Oh wait, they haven't. The Repugs are just mad; they were hoping no one would notice but oops, someone did.

. (0)
Saturday May 25, 2013, 3:42 pm
Great article, Kit. Thanks for sharing.

Kit B (276)
Saturday May 25, 2013, 4:03 pm

Every group that applies for a 501 c is supposed to be investigated, for too many years they just got a rubber stamp from the IRS. Now that will probably happen again. Janet is correct, political donations are not tax deductions and every group must tell the donor that by law. One group that has had and continues to have difficulties with a 501c status is the NAACP. Though they do much in the way of charity work they also donate to political campaigns. Which in turn has earned them aggravation with the IRS.

Birgit W (160)
Saturday May 25, 2013, 4:03 pm

firedup N (0)
Saturday May 25, 2013, 5:11 pm
If someone has there hand in the cookie jar, It's 501 c 4 OFA, now called Organizing for Action, strictly political.

American Bridge 21st Century, Priorities USA Action, Majority PAC, House Majority PAC ( has over $35,844,952) ,  Democracy for America (DFA) is a progressive politician action committee. also 501(c)(4)s Patriot Majority and Patriot Majority USA: All political hacks

Media Matters (which advise the White House), that started 1998 as write in and in 2004 to oust GWB
I get emails from these still a register democrat.

I get my information from listening to the hearings on CSPAN rather then any news media and bogus slanted articles

Kit B (276)
Saturday May 25, 2013, 5:15 pm

As has been stated here many times, most here do agree that all 501c applications should be scrutinized. To pretend that only tea party groups have been investigated or that is something coming forward for the first time is bogus.

So you consider the wind bags in Congress news worthy and factual? I do not. Though like most here I too watch C-Span, but not for news. Just to keep up with the HOT AIR in Congress.

pam w (139)
Saturday May 25, 2013, 6:15 pm
When does the IRS investigate ''churches'' which use their tax-exempt assets to interfere with politics and peoples private lives?

Let's start with WESTBORO BAPTIST.


Judith Hand (55)
Saturday May 25, 2013, 6:30 pm
Noted. The author 'said' to David Camp that his stated belief was essentially a smoke screen. Yup. And so is the case with virtually every current Republican "issue" "problem" "scandal", etc.

Diana Bair (7)
Saturday May 25, 2013, 6:31 pm

Diana Bair (7)
Saturday May 25, 2013, 6:33 pm

Yvonne White (229)
Saturday May 25, 2013, 8:08 pm
I guess the Law meant Socialist Corporate Welfare Organizations!;) The damned IRS will garnish wages of people behind on student loans, but allow Millions to be slid under the table for Reich-wing Klans (I mean "organizations"..but clans are social, right?;).. We need MORE investigative agents, not less!!

Colleen L (3)
Saturday May 25, 2013, 8:20 pm
Excellent article. Happy to see that like other issues that the federal government /agencies have control over, that they are finally catching up to these crooks. Hope that this open their eyes to more illegal doings. Thanks Kit

Betty Kelly (4)
Saturday May 25, 2013, 9:25 pm
Scams, Scandals and Animal Abuse ALL need to be thoroughly investigated and ALL the guilty prosecuted.

Alice C (1797)
Sunday May 26, 2013, 3:13 am

David Johnson (13)
Sunday May 26, 2013, 6:19 am
Excellent article. It is disheartening to see what is happening to our it's of the money, by the money and for the money.....

Past Member (0)
Sunday May 26, 2013, 6:43 am

Amanda Ashworth (2)
Sunday May 26, 2013, 7:23 am

Gloria picchetti (304)
Sunday May 26, 2013, 7:57 am
Hit's the nail on the head!

Theodore Shayne (56)
Sunday May 26, 2013, 2:23 pm
Noted. Good article that presents the fact simply. It doesn't who you put in does it?

Jason R (67)
Thursday June 27, 2013, 9:35 am
"Turns out the IRS scandal is a put-on.

Internal IRS documents show that tea party groups weren't the only nonprofits flagged for review. Groups with "progressive" or "occupy" in their names were on the same list.

The facts haven't daunted the Republican scandal mongers. If anything, they've ramped up their rhetoric.

Last Friday, Senate Leader Mitch McConnell accused the administration of a "coordinated effort to stifle free speech" as part of a "culture of intimidation."

Meanwhile, back in reality:

Twelve million Americans still can't find a job.
NIH cut 700 critical research grants in June.
Seventy percent of Meals on Wheels programs have waiting lists.
Student loan rates will double on July 1st.
We have a choice.

Either we waste the next three years in a defensive crouch or we force our issues back into the national debate."
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